Tag: U.S. Federal Taxation Specialization

Recall that the itemized deductions are also called “from AGI” deductions or below the line deductions. They are usually more personal in nature, including medical, taxes, interest and charitable, and not related to running a trade or business. It only provide a tax benefit to the extent, in total, they exceed the standard deduction amount….

Employees vs Self-Employed What differentiates an employee from a self-employed individual (also known as independent contractor)? Employee If a person is subject to the will and control of another with respect to what job shall be done and how it shall be done. Then that person is more likely to be considered an employee rather than a self-employed…

Deductions are essentially the tax word for expense that can reduce the tax base. Deductions are disallowed unless a specific provision permits them. Deductibility depends on “legislative grace”. That is what Congress has decided to legislatively decree what is an allowable expense that can reduce the tax base. As a result, deductions are defined quite narrowly….

Gross Income Gross income is all income from whatever source defined, it includes income realized in any form whether in money, property or services. If receive property or services, use Fair Market Value. Taxpayer recognize gross income when: They receive an economic benefit Increase in net worth (assets minus liabilities) Borrowed funds represent a liability,…