ACQUISITION -The purchase of one corporation by another, through either the purchase of its shares, or the purchase of its assets.
COMPULSORY PAYROLL TAX -An automatic tax collected from employers and employees to finance specific programs.
DEPENDENCY EXEMPTION -Amount that taxpayers can claim for their eligible dependents. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.
DEPENDENT -A person, other than the taxpayer or spouse, who entitles the taxpayer to claim a dependency exemption.
DEPRECIATION AND SECTION 179 EXPENSE -50% special depreciation allowance. For qualified property you acquire after May 5, 2003, you can take a special depreciation allowance that is equal to 50% of the property's depreciable basis. However, instead of claiming the 50% special allowance, you can elect to claim the 30% special allowance or elect not to claim any special allowance.
EARNED INCOME CREDIT -A tax credit for certain people who work, meet certain requirements, and have earned income under a specified limit.
ELECTRIC AND CLEAN-FUEL VEHICLES -For vehicles placed in service in 2004, the maximum clean-fuel vehicle deduction and qualified electric vehicle credit are scheduled to be reduced by 25%, as compared to 2003.
EMPLOYEE -Works for an employer. Employers can control when, where, and how the employee performs the work.
ESTATE AND Gift Tax -One of the oldest and most common forms of taxation is the taxation of property held by an individual at the time of their death. Such a tax can take the form, among others, of estate tax (a tax levied on the estate before any transfers). An estate tax is a charge upon the decedent's entire estate, regardless of how it is disbursed.
EXCISE TAX -A tax on the sale or use of specific products or transactions.
EXEMPTIONS -Amount that taxpayers can claim for themselves, their spouses, and eligible dependents. There are two types of exemptions-personal and dependency. Each exemption reduces the income subject to tax. The exemption amount is a set amount that changes from year to year.
FAMILY DAYCARE PROVIDERS -A family daycare provider is a person engaged in the business of providing family daycare.
FEDERAL INCOME TAX -The federal government levies a tax on personal income. The federal income tax provides for national programs such as defense, foreign affairs, law enforcement, and interest on the national debt.
FEDERAL INSURANCE CONTRIBUTIONS ACT (FICA) TAX -Provides benefits for retired workers and their dependents as well as for disabled workers and their dependents. Also known as the Social Security Tax.
FORM W-4, EMPLOYEE'S Withholding Allowance CERTIFICATE -Completed by the employee and used by the employer to determine the amount of income tax to withhold.
GROSS INCOME -Money, goods, services, and property a person receives that must be reported on a tax return. Includes unemployment compensation and certain scholarships. It does not include welfare benefits and nontaxable Social Security benefits.
INCOME TAXES -Taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest, dividends). Income taxes can be levied on both individuals (personal income taxes) and businesses (business and corporate income taxes). Visit our parent site Lawfirms.com to talk to a Tax Attorney near you.
INSTALLMENT AGREEMENTS -To be eligible for an installment agreement, all returns that are due must first be filed. Installment agreements generally require equal monthly payments. The amount of an installment payment will be based on the amount owed and on the taxpayer's ability to pay that amount within the time legally available for the IRS to collect.
LIMITED LIABILITY COMPANY -An LLC may be classified for Federal income tax purposes either as a partnership, a corporation, or an entity disregarded as an entity separate from its owner by applying the rules in Regulations section 301.7701-3. See Form 8832, Entity Classification Election, for more details.
MEAL EXPENSE DEDUCTION -Generally, you can deduct only 50% of your business-re-lated meal expenses while traveling away from your tax home for business purposes. Also, you can generally de­duct only 50% of certain reimbursements you make to your employees for meal expenses they incur while traveling away from home on business.
PARTNERSHIP RETURN -If you need more time to file a partnership return, file Form 8736, Application for Automatic Extension of Time To File U.S. Return for a Partnership, REMIC, or for Certain Trusts, for an automatic 3-month extension. File Form 8736 by the regular due date of the partnership return.
SELF-EMPLOYMENT TAX -The self-employment tax rate on net earnings remains the same for 2003. This rate, 15.3%, is a total of 12.4% for social security (old-age, survivors, and disability insur­ance) and 2.9% for Medicare (hospital insurance).
Standard Mileage Rate -For 2004, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck is increased to 37.5 cents a mile for all business miles.
SUBCHAPTER S -The S-Corporation must complete and file IRS Form 1120s to report its annual income to the IRS each year.
WORK OPPORTUNITY CREDIT AND WELFARE-TO-WORK CREDIT -The work opportunity credit and the welfare-to-work credit are scheduled to expire for wages paid to individuals who began working for you after 2003.
