This website uses cookies to ensure you have the best experience. Learn more

Tax Strategy Essay

2814 words - 11 pages

Introduction Americans are paying more in taxes than ever before. No matter where we turn, we are confronted by taxes, from the first time we buy something as a youngster to even after we die. Many thousands of pages have been written regarding taxes, tax laws and how to reduce income tax liability. The bottom line is that if you, the Corporation, or partnership is successful and making money, income taxes will have to be paid. However, having knowledge of the tax laws and how they can be used in your favor can drastically reduce the amount of taxes you pay. The key is to stay informed about the laws and knowing tax strategies and how to apply these strategies. First, it's important to realize that just because something is published, it is not necessarily valid or appropriate for your situation. There are general tax strategies that could apply to any taxpayer, as well as strategies designed for specialized groups of taxpayers, including self-employed people, real estate investors, business owners, and executives. Each person's situation is different, and individuals should work with their tax advisers to identify strategies that work best for them.This paper focuses on some of the tax strategies that can be used for cutting individual income tax bills based on the new tax laws. It provides a brief summary of the new tax laws and major provisions for considering how to use them for planning the next year's tax strategy.An Overview of the new Tax Laws Rule of the Game--- Tax Laws Congress writes the tax laws, which become part of the Internal Revenue Code (IRC) or tax code for short. The tax code is amended every year. Congress has given the IRS the power to interpret the tax code through a series of IRS Regulations. These regulations are expanded versions of some, but not all, tax code provisions with illustrations of how the law is applied in different situations. The IRS also publishes Revenue Procedures and Letter Rulings, which provide guidance in the same manner as the regulations. Keep in mind, not every provision of the tax code has a corresponding regulation.The IRS is not the final word on interpreting the tax code." The federal court system, composed of the U.S Tax Court, federal District Courts, the U.S. Court Federal of Claims and U.S. Bankruptcy Courts, all have the power to decide, on a case-by-case basis, how Congress intended the tax laws to be applied" (Nolo Press, Online ). Any taxpayer or the IRS, unhappy with a court's tax decision, can appeal to a Circuit Court of Appeals, and in rare cases to the U.S Supreme Court.The Current Scene--- New Tax Laws Congress has passed about 11 major tax laws between 1975 and 1993 to bring the federal budget into balance. The balanced budget was accomplished through significant tax increases in the 1980s, and there were five major revisions, including the landmark overhaul Tax Reform Act of 1986. After nearly two decades of essentially constant change to the tax system, on August 5, 1997,...

Find Another Essay On Tax Strategy

Tax as a Means of Control and Stimulator of the Economy in the Uk. Is it a Good Idea to Fluctuate the Tax Rates for Stabilizing the Economy? Is Tax Necessary for a Country’s Growth? Is Green Tax ...

9199 words - 37 pages money which might then have an adverse effect on the country's economic future, as there would be a deficit in their budget. Criticising the idea of tax cuts to stabilise the economy, an Australian senator Christine Milne (2009) said 'tax cuts are inappropriate strategy. The government needs that money to invest in things that will make Australia strong and reduce our risk globally and those things are essential health and education infrastructure

A HISTORY OF THE SIN TAXES

1917 words - 8 pages additional fund to support its citizens. Sin tax also impact on consumers to reduce the consumption of the antisocial products like cigarette and alcohol. As a result, some consumer gets benefits and they become free from risk of sickness. It also helps to minimize the medical cost. Therefore, sin tax can also be considered a prohibition to the consumers.References:Baye M.R., & Prince J.T. (2014). Managerial Economics and Business Strategy. New York

The Case for Introducing a Property Tax, Collected at Local Government Level

2233 words - 9 pages . Gurdgiev, Dr.C. 2009. Trinity College, Dublin. Macroeconomic Case for a Land Value Reform in Ireland. Dublin 2, Ireland. Reports Tax Strategy Group. 2009. Property Taxation. Dublin. Ireland Commission on Taxation. 2009. Report 2009. Dublin, Ireland: Stationary Office Online Resources Collins, S. 2011. Property Tax Brought Forward. The Irish Times, 21st December. Available at: http://www.irishtimes.com/newspaper/breaking/2011/1221/breaking6.html

Why Do We Have Taxes?

2096 words - 9 pages international economy. The perfect tax system in these countries ought to raise key revenue without intemperate government borrowing, and ought to do so without demoralizing economic activities and without going amiss excessively from assessment frameworks in different countries. Developing countries face impressive difficulties when they tried to make an appropriate tax system. i. Initially, most specialists in these nations are ordinarily

The 2014 Malaysian Budget

1921 words - 8 pages in the coming year. These changes include tax changes for the year 2014.In the Malaysian Budget 2014, there were several changes in the income tax rates and policies which could be acknowledged. One major change that would be taking place in the year 2015 would be the introduction of goods and service tax(GST). The date of implementation is 1 April and the GST will be at a fixed rate of 6% in Malaysia.Besides that, there is a decrease in

Link between Corporate Strategy and KMS

2598 words - 10 pages platforms.Knowledge Gap analysis and identification of KMSThe knowledge gap analysis for an organisation of the size of ATO with broad range of activities is itself a great activity. To illustrate the relationship between Corporate strategy and KMS, we cite few examples below.There has been a great amount of pressure brought from Tax agents about the need for better service from ATO recently.What ATO must do?Tax agents get immediate and correct

Whether a Cut in Corp Tax Rate be Beneficial

4338 words - 17 pages Whether a Cut in Corp Tax Rate be Beneficial Doesn’t everyone want to keep what he/she has earned? It has always been somewhat tradition for Americans to work hard for their money, only to see some of it squandered away come tax time. Wouldn’t a tax cut, for some, be like a divine, heavenly grace? As the year 2001 unfolds and George W. Bush begins his presidency, income tax rates have, in fact, become a concern. President Bush is pushing

The Difference between Zakat, Conventional and Islamic Taxation

1973 words - 8 pages roads, legal tender and enforcement contracts. Tax also use for welfare fund and public services such as education systems, health care systems and public transportation. Common public utilities for a country such as electrical energy and water distribution and waste management also fund by taxation. In addition, a portion of tax is also funded to influence the macroeconomic performance of the economy by following the government strategy (fiscal

Corporate Finance

2753 words - 11 pages tax legislation in consideration of the equipment manufacturing cost, while under the new tax framework, Pressco could increase the equipment price respectively with the ITC earned or not.While in the sight of the potential customers like Paperco, they'd better give priority to a conservative strategy, that is to keep the old equipment in use and wait for the new tax legislation to be enacted. Meanwhile, they can also try a more active way to keep

Cost and Benefit of Hedging Risk Using Financial Derivatives

926 words - 4 pages ratio, and earn tax benefit. It can be concluded that firm should hedge risk using financial derivatives because lot evidence shows that firm using this strategy is more successful than those who are not. However, since different type of companies facing different risks, they should not necessarily use the same hedging strategy.

Marketing Research

925 words - 4 pages clients’ tax returns. Another marketing research technique that H&R Block utilizes is their social media campaigns. According to Current Issues in Marketing Strategy (2011), “H&R block implemented a very thorough, well constructed and most relevant... cool social media campaign. Their marketing team looked at what people want to watch, how they interact and then worked the H&R Block brand and message into it” (para. 4). Beneficial Marketing

Similar Essays

Taxation Influences Multinational Companies Structure And Investment Decisions

913 words - 4 pages tax area creating a permanent tax saving, this is a lot harder to achieve for dividends due to tax withholding before they are paid. This is why many MNC’s have a bias to debt capital due the tax saving incentive. This is seen by many MNC’s having almost no share capital yet have large loan capital in a foreign subsidiary which is known as “thin capitalisation” [1]. The outcome of this strategy is to reduce the profits of the company in high tax

Professional Challenges In Computing Essay

2073 words - 8 pages apparently amazon declined to answer this question on its tax avoidance. This international companies had also paid no tax to US government applying the same strategy. “Tax heaven” state such as Luxembourg, where certain taxes are levied at a low rate or not all. Operating from such states, these companies are saving their profit and being stronger year by year. Global company such as Apple, has an Irish holding company with no operations outside of

Thailands Tax Essay

1383 words - 6 pages . Along with CAT, their tax consultants and audit firm PricewaterhouseCoopers (PwC) is also part of the investigation to whom CAT paid $55 million for devising the strategy of this 'Swiss Structure' and helping them transfer the $8 billion profit off-shore.[2: Dan Roberts, 'Senate report claims Caterpillar avoided $2.4bn in US taxes', The Guardian. 1 April 2014. ][3: Hampton Pearson, 'Caterpillar dodged paying $2.4 billion in taxes: Senate report

Generation Skipping Tax Essay

1331 words - 6 pages . Congress passed the original generation-skipping transfer tax in 1976 to go along with the federal gift and estate tax system to make sure that the transfer of wealth from one generation to the next would have the same tax effects. The most common tax planning strategy was to pay income to one’s child for the child’s life and then distribute the trust property to his or her grandchildren at the child’s death before this legislation.1 The generation