Allan Lichtman is weirdly famous. Of course, by famous I mean historian-famous, not Taylor Swift-famous. Or even Ron Chernow-famous — not every historian gets a helping hand from Lin-Manuel Miranda. But Lichtman, a history professor at American University, is indisputably famous among a certain group of extra-online, hyperpolitical news junkies. These people are fascinated by Lichtman because he makes ironclad predictions about who will win each presidential election. (He’s picked Kamala Harris this year.) Lichtman eschews the more defensible probabilistic forecasts like the ones from Nate Silver and other number crunchers. Lichtman likes his predictions to be clear and falsifiable,…

What is married filing jointly?Married filing jointly is one of five filing statuses taxpayers can choose from. If you file a joint tax return, you and your spouse report your combined income, credits and deductions. This also means that both people are responsible for any tax due.The other filing status married couples can choose when filing Form 1040 is married filing separately. Most married taxpayers choose to file a joint return since it can give them access to more tax credits and larger tax deductions. You qualify for married filing jointly status as long as you were married by Dec.…

Almost every legal settlement includes a full release of claims. A release may recite some of the plaintiff’s claims, but it will be broad. It might say any taxes on the settlement are solely the plaintiff’s responsibility, but should it say more? Yes, if there is a chance to add tax language before signing, take advantage of it. Disagreements can usually be worked out, and a few words can matter and help with taxes later. In contrast, a release that says nothing can invite IRS scrutiny. Consider Isidra Elizabeth Espinoza v. C.I.R, 636 F.3d 747 (5th Cir. 2011). This tax…

What is an underpayment penalty?An underpayment penalty is a charge the IRS imposes on taxpayers who did not pay all of their estimated income taxes for the year or paid their taxes late. You’ll face an underpayment penalty if you:Didn’t pay at least 90% of the tax on your current-year return or 100% of the tax shown on the prior year’s return.Paid your estimated taxes late.If you work for an employer, you may be hit with this penalty because the tax that was withheld from your paycheck during the year didn’t cover your full tax liability. If you’re an independent…

Tax Notes contributing editors Robert Goulder and Joseph J. Thorndike examine former President Trump’s and Vice President Harris’s proposals to exempt tips from the federal income tax, all in five minutes. This transcript has been edited for clarity. Robert Goulder: Hello, I’m Bob Goulder, contributing editor with Tax Notes. The presidential election is approaching fast, and both candidates have endorsed the idea of exempting tips from the federal income tax. Now, that’s bound to be a popular idea with a certain segment of the labor force, but is it good for the country as a whole? Is it good policy?…

In this episode of Tax Notes Talk, Tax Notes contributing editor Robert Goulder shares his take on the effects of the Foreign Account Tax Compliance Act and common reporting standards on the feasibility of taxing foreign assets. Tax Notes Talk is a podcast produced by Tax Notes. This transcript has been edited for length and clarity. David D. Stewart: Welcome to the podcast. I’m David Stewart, editor in chief of Tax Notes Today International. This week: spotlighting hidden assets. We’ve highlighted aspects of the efforts to identify hidden assets and the taxation of them in the past, such as with…

There has been a long-standing principle that UK VAT exemptions are applied narrowly but could the new government’s very high-profile decision to remove the exemption for supplies of education made by private schools be the start of the removal of other VAT exemptions? Slippery slope One obvious area is private healthcare. From a political perspective, there are similarities in that it could be said that only the wealthier members of society opt to pay for private medical care, with the inference being those people can therefore pay additional tax. From a tax technical perspective, the UK’s exit from the European…

One of the most common misconceptions about the federal tax system is that someone’s entire income is taxed at a single rate. In reality, most people pay at least a few different tax rates on different portions of their income.In tax speak, a marginal tax rate refers simply to someone’s highest tax rate. Marginal tax rate definitionA marginal tax rate is the rate paid on the last dollar of taxable income. It equates to your highest tax bracket. Although you may hear someone say that they are “in the 22% tax bracket,” what that really means is that 22% is…

Tax season is a three-month period, typically from late January to mid-April, when people prepare their tax documents and report their income for the prior year to the IRS. This is also the time when people will settle their bill if they owe taxes or receive notice that a refund is coming their way if they overpaid. When can I file my taxes?The tax season opening date, which usually falls in late January, marks the time when the IRS begins to accept and process tax returns for the previous tax year. Returns that are filed after tax season ends in…

Gross income definitionGross income is the total amount of money you earn — such as your wages from a job or profits you might make from selling a stock — before taxes. Business and retirement income, tips, rents and any interest earned are all considered income by the IRS. You may need to know your gross income if you want to apply for a loan or an apartment. Your gross income is also the starting basis for calculating how much you owe in federal taxes.How to calculate gross incomeTo figure out what your gross income is, simply add up all…