Read our new article about Tax Law to find the answers for the following questions:
“What is Tax Law?”
“Is there a law to pay income tax?”
“Is there a law to pay federal income tax?”
“Do i have to pay income tax?”
“Are income taxes legal?”
“Is income tax legal in the USA?”, and many others.
Plus you will find the comprehensive explanation for a Tax Law.
If there is one certainty in life, it’s taxes.
You can be certain that from gifts you give or receive, your hourly wages, and even tips, there are tax codes – and laws that uphold that taxation.
Tax Law defines what portion of your income can be taxed.
It is used in determining legal sales tax, property tax, and taxes place on inheritances. From the individual working a part-time job up to corporate entities, taxes must be paid.
Sometimes, this results in a federal refund; other times, there are laws written in very fine print that allow taxes to be reduced because of money that was donated, gifts, personal holdings, and a host of other reasons.
Tax Laws are also constantly being revised each year, so the amount you awe may be increased one year, while some things may not even apply during another.
You need to know which Tax Laws apply to you, your business, your family, and what you own.
The last thing you want is to have to sell things you’ve worked hard for just to pay off taxes you didn’t even know you owed.
This article will give you a definition of Tax Law, as well as its subsections.
This will help you understand why you are required to pay taxed on certain things, which taxes may not even apply to you, and how to make sure those “hidden” taxes don’t sneak up on you from behind in the future.
We will also help you identify if you have been paying taxes that don’t apply to you, and if you should consult with a Tax Lawyer in order to make certain that you are not unduly carrying a tax burden.
Table of Contents (jump ahead!)
- Income Tax
- Gift Tax
- Property Tax
- Corporate Tax
- Estate Tax
- Tax Enforcement
- Bottom Line
- Best Selling Tax Law Books
Income Tax
Anyone who is employed is familiar with income tax.
For those who earn paychecks from larger employers, income tax at the state and federal levels is usually taken out of the net earnings automatically, and is itemized under the withholdings statement attached to each check.
However, for those who are self employed, or for those who work as independent contractors, state and federal taxes may not be taken out of your earning – in which case you must fill out a special form and pay your taxes (if any) in a lump sum each year.
For the individual, taxes are not simply determined by wages alone (otherwise, there would be fewer headaches and people would be eager to do their own taxes each year).
Taxes are determined by the number of dependents in your household (partner, spouse, children who are not earning money and are supported by your income); if you have received or given gifts that amount to a certain dollar value (in case you made a sizable donation to your local public broadcasting station, or received a new car from someone just because you’re a great person); tips (while difficult to determine and keep track of, bartenders, waiters, hairdressers, etc. are supposed to claim cash tips on their tax forms); capital gains or losses (if you have money invested in stocks or commodities, and have made money from those investments, they are subject to taxation – likewise, taking a hit from those investments may lower your taxes); as well as other fine points may adjust what you pay (or what you are refunded) by a considerable amount.
For these instances, while many people think an accountant is the first option, in reality a Tax Lawyer is your best bet.
Tax Lawyers know state and federal laws, along with impending tax legislation so that you don’t end up paying through the nose because of taxes.
On the other side of the coin, Tax Lawyers will help you sift through your finances to ensure that you get the largest refund possible.
Gift Tax
Gift Tax Law applies to the transfer of property from one person (or entity) to another that fall outside of business transactions.
While this does not mean that you need to claim the toys you gave your children as taxable gifts, this does apply to financial donations and property (homes, cars, etc.) that are given and received over the course of a tax year.
Typically, the onus of gift taxes falls on the giver.
If you donated a large sum of money to a foundation, or, for example, you gave a bunch of supplies to a local school in order to help them in their mission of educating children, then you need to keep track of those transactions and claim them on your tax reports.
With new Tax Law legislation, starting in 2011 the recipient of gifts equal to or exceeding $13,000 bear the burden of taxes under this new tax law.
What this means is that if you make a donation that is less than $13,000, you will bear the responsibility of the taxes, whereas if you give a gift in the amount of $13,000 or more (be it a cash donation, a new car, etc.) then not only will you have to keep track of it for tax purposes, but the recipient will become responsible for the taxes owed on such a gift.
It should be noted that sizable gifts given to spouses are exempt from such taxes.
If you have given a gift, or have received a large donation, you need a Tax Lawyer to be able to tell you exactly what you are responsible for, and how much (if anything) you owe.
Gift Tax Law can be intimidating, and often make people wary of accepting much-needed gifts and donations simply because the taxes are very costly.
A Tax Lawyer can tell you how you can accept or give such gifts so that you are not unduly penalized.
Property Tax
When you own a home or a piece of land, you are required to pay taxes.
The amount you pay is typically assessed by local agencies (as opposed to federal) and based on a number of factors.
Taxes are different depending on how the land is being used (if it is residential, agricultural, commercial, industrial, etc.), if there have been any improvements made to structures on the land (business expansions, additions to a house, solar panels to offset the carbon footprint, etc.), where the property is located (in a wealthy neighborhood, near railroad tracks, bordering a park, etc.), and a number of other factors that determine the value of a property, and what percentage of tax is owed each year.
On top of this, homes which are owned and reside within a school district are subject to School Tax, regardless of whether or not any of the residents attend public schools.
If you do not pay the assessed amount of taxes on your property, a lien can be filed against you.
If you are a new homeowner or have a small business, this can mean extra financial penalties on top of the mortgage you are already paying, and possibly court hearings that could lead to imprisonment or hefty fines.
If you are a homeowner, a landlord who owns property that is being rented, a business owner, or if you just have an undeveloped plot of land, you need to consult with a Tax Lawyer in order to figure out what taxes you need to pay based on the assessment of your property and how it is being used.
You might just find that there are a number of taxes you don’t need to pay.
A Tax Lawyer will also be able to help you out in case an undue lien is placed against you on a charge of failure to pay taxes.
Corporate Tax
For business owners, Corporate Tax is treated much like income tax (to a degree), yet the business is treated as a separate entity from the individual owner(s).
What this means is that not only does a business have to pay taxes on its earnings, but it has to pay taxes on the property on which it exists (if the property and buildings are owned by the business itself), and it has the added responsibility of dealing with automatic withholdings for its employees – meaning that state and federal taxes are automatically taken out of their paycheck so that they do not have to set money aside throughout the year in order to pay local, state, and federal taxes all at once.
(The exception to this, is if the employees are private contractors or otherwise self-employed, in which case the responsibility of taxes rests on their shoulders instead of the business owner’s.)
If corporations fail to comply with tax laws, they are subject to fines, interest penalties, and possibly other legal charges that can result in a court hearing.
In order to make sure you have your bases covered, and that your rights as a corporate entity are protected against not only existing Corporate Tax Law, but pending legislation for the upcoming fiscal year.
A Tax Lawyer knows your rights, as well as your responsibilities, and will make certain you do not end up paying more than you have to, and that you are not caught in some fine print clause in the Tax Laws.
Estate Tax
While it isn’t the most pleasant topic, this is where two inevitable coincide: Death & Taxes.
When it comes to an estate left behind by an individual, all owned property and financial assets are subject to tax laws – this means a home, business, stocks, holdings, etc. can be assessed and taxed when a person dies.
Estate Tax Laws get tricky, because the rules are subject to frequent change, as in 2010, when Estate Tax Laws were suspended entirely. In most cases, estates are not subject to taxes unless the total value ends up in the millions.
However, if an estate is broken down into its components, a corporate entity that was owned by an individual, stock holdings, or other items (valuable jewelry, works of art, etc.) may be considered taxable under Estate Tax Laws.
Estate Tax is considered separate from Inheritance Tax, and though the individual may be deceased, it would be wise to consult a Tax Lawyer in order to sort out what may be taxable, and what is protected until current Estate Tax Law, so that the items and holdings aren’t tied up by audits, IRS claims, and banks before the will can be read.
Tax Enforcement
Tax Laws are enforced by the Internal Revenue Service (IRS). This means that if there is a failure to comply with Tax Laws of any sort, if you do not pay your taxes on time, and in the correct amount – or if you fail to file for a tax refund (yes, you can be penalized even if you are owed money by the government), you can be subject to fines, liens, property confiscation, or worse.
The typical route for penalizing an individual who fails to properly file taxes (for for a refund) is wage garnishment – meaning that on top of the regular taxes that are taken out of your paycheck, and additional percentage is withheld until the amount you owe (or the amount you have been fined) has been paid. In extreme cases, the IRS may freeze financial assets, force people and businesses into selling off assets (even homes), and have people arrested if they have not complied with various Tax Laws.
The IRS will also keep you from “hiding” funds that could otherwise be used to pay off tax penalties (the stereotype of the person stuffing a mattress with cash only to have it confiscated by the IRS is one classic example).
In most cases, a person or organization will receive a letter of warning, and an opportunity to present a case or pay off the penalties.
In all of these instances, it is best that you get Tax Lawyer.
You don’t want to incur additional penalties on top of the taxes you may not even owe in the ашкые place.
Nor do you want to to have your personal life and business subjected to an audit and investigation, and have to explain why you cannot account for that coffee you bought 3 years ago, and if it was for personal use, or part of a business meeting that could be claimed differently on your taxes.
Tax Lawyers can prepare a solid case so that you aren’t left completely destitute because of confusing tax laws, and also let you keep earning money – rather than being left without a roof over your head, and wage garnishments that barely allow you to exist above the poverty line.
Before you file taxes, consult with a Tax Lawyer to make sure that your earnings and deductions are in order, and also to find out if there is any new legislation that might increase the amount you owe, or likewise decrease the amount you should be refunded.
Bottom Line
Tax Law can be an overwhelming and confusing realm – and one that is subject to changes on a yearly basis (and those changes aren’t widely known by the general public).
If you overlook a section on the various forms, fail to claim what may seem like unimportant expenses, or if you aren’t’ up to date on the latest tax laws, then you may subject yourself to fines, garnished wages, tax liens – all the way up to a full IRS audit, personal investigation, and even imprisonment.
Tax Lawyers are there to protect businesses and individuals from unwarranted persecution, and to make sense out Tax Laws so that people don’t find themselves trapped because of a simple error on a tax form.
Remember, you can be penalized even if you are supposed to get a refund from the government.
Before you prepare your taxes, by yourself or with an accountant, make sure you seek out the advice of a Tax Lawyer so that you are aware of the latest tax codes and upcoming legislation, and what you can do to ensure you do not get penalized for a mistake.
Look, you work hard for your money.
Whether you are getting a refund, owe taxes due to a very successful year, if you own a home, or if you’ve just received a gift – taxes are a necessity in today’s society, and while you are responsible for paying them, you also deserve to hold onto as much of your earnings as you possibly can.
A Tax Lawyer can see to it that you get to keep what is rightfully yours, and not leave you broke and indebted to the government when tax season rolls around.
Best Selling Tax Law Books
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