Compliance
- Federal Income Tax – Estimated Tax Payment, Tax withholding, Yearly Tax Return Extension, Tax Return filing
- State and Local Income Tax – Tax Payment and Tax Return filings
- AMT, Alternative Minimum Tax – Annual filing calculation
- Payroll Taxes – Withholding, Tax Payments, Payroll Tax Returns.
- Social Security and Medicare Taxes (FICA) – Employer and Employee contribution
- Unemployment Taxes – Federal and State
- Sales and Use Tax – Tax Payment, Tax Return filing
- Property Taxes – Yearly Assessment, Appeal, Re-assessment, Tax Payments
Income taxes can be charged at the federal, state and local levels. At the federal level, the amount paid depends on a number of factors, including income and marital status. Lundeen noted the U.S. has a progressive tax system, consisting of seven tax brackets. He added, “For each additional dollar in a new bracket, you pay that bracket’s tax rate.” There are also a number of credits. For one, the Earned Income Tax Credit (EITC) gives a tax credit to low and moderate earners.
State income tax structures vary considerably. Some states, such as Florida, do not levy an income tax at all. A few states use a single income tax rate, while many states apply different tax rates depending on income.
Sales taxes are taxes on goods and services purchased. These are usually calculated as a percentage of the price paid. Sales taxes vary by state, and even by municipality. In some states, there are no sales taxes at either the state or local level. Other states and local authorities can charge a hefty amount. In Tennessee, for example, consumers can pay as much as 9.44% in sales taxes when combining state and local taxes, according to the Tax Foundation. In 12 states, sales taxes are higher than 8%. Sales taxes are often considered to be regressive, meaning lower-income individuals and households spend a greater proportion of their earnings to pay the tax, compared to higher income residents.
Excise taxes are similar to broad sales taxes, except they are charged on specific goods. States typically tax certain purchases, including gas, cigarettes, beer and liquor. Excise taxes are frequently levied on so-called “sin products,” and often are intended not only to help raise money, but also to deter unhealthy behaviors. The federal government also collects such taxes, including 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel, as well as a 10% charge for tanning services. Excise taxes are often combined with sales taxes on a single purchase. According to Lundeen, in many cases a sales tax is paid on top of an excise tax.
Both employees and employers have to pay the Social Security tax, one of two payroll taxes. For the Social Security tax, employees pay 6.2% of their wages, and employers match that for a total contribution of 12.4%. In 2013, the maximum earnings subject to the tax were $117,000. In 2011 and 2012, the amount employees had to contribute briefly declined to 4.2% of wages, as part of a payroll tax holiday designed to encourage people to spend more and boost the U.S. economy.
A similar tax also exists for Medicare. Both employees and employers are required to contribute 1.45% of wages, or 2.9% in total, to fund the program. Unlike Social Security, there is no maximum taxable wage. In fact, since last year, workers who earned more than $200,000 had to contribute an extra 0.9% of their wages to the program.
Property taxes are usually imposed to fund local services. According to the Tax Foundation’s Lundeen, these taxes are based on the property’s market value, and are most often levied on real estate, but can also apply to other property, such as cars. In many instances, these taxes are deductible. However, according to the IRS, property taxes on real estate are only deductible if they are used to promote the “general public welfare,” but not if they are used “for local benefits and improvements that increase the value of the property.” Many homeowners also qualify for a mortgage interest deduction.
The IRS defines an estate tax as “a tax on your right to transfer property at your death.” The estate tax is controversial, as it is seen by some as a penalty for dying. Cash, securities, insurance, real estate, and business interests are among the items considered part of an estate. However, for individuals, only estates exceeding $5.34 million are taxed by the federal government. Most Americans, therefore, are exempt from paying the federal estate tax. The highest estate tax rate charged at the federal level is 40%.
Estate taxes are also often levied at the state level. While states frequently use lower rates, they also often have lower exemptions than the federal government’s $5.34 million cutoff. Some states have an inheritance tax, where the rate you pay depends on your relation to the deceased.
The gift tax is similar to the estate tax, in that it is a tax on transferring wealth. One important difference is that gift taxes involve two living people, Lundeen added. The federal government also has a far lower exemption level for the gift tax than it does for the estate tax. All gifts over $14,000 are taxable, with the tax to be paid by the recipient. The highest gift tax rate is 40% of the taxable gift amount. This tax applies not only to cash, but also to gifts like company shares or cars. Last year, Minnesota became the second state to implement its own gift tax, following Connecticut. Looking for Professional Services of Corporate Tax filing in Canada, Corporate Tax filing in USA ? USCorporatesolution helps you out for income taxes, sales taxes, excise taxes, payroll taxes, property taxes, estate taxes, gift taxes in USA, Canada. Inquire us today at info@uscorporatesolution.com