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…

There are two main categories of work in the eyes of the IRS — 1099 contractors and W-2 employees. These two types of work involve different tax forms and come with different tax obligations for employers and workers. Generally speaking, W-2 employees have taxes withheld from their paychecks by their employer, while 1099 contractors are responsible for paying taxes on their ownThe difference between 1099 work and W-2 work also depends on the nature of the employment relationship — and there are strict rules about which kinds of workers can be given each classification. Here’s what to know.1099 workers get that…

Understanding how much you may owe in taxes means keeping track of a lot of different numbers and terms. One of the most important numbers is taxable income: the amount of money on which you have to pay income tax.Here’s what to know about taxable income, how to calculate it and some basic strategies for reducing it.According to the IRS, most income is taxable unless it is tax-exempt by law. Taxable income can take the form of earned income, such as wages and salaries, as well as unearned income, such as profits from the sale of investments or property.Some common…