A nonresident alien is an individual who is not a U.S. citizen and does not have a green card or passed the substantial presence test. For a nonresident alien, taxes are charged differently than a U.S. citizen. Depending upon the nature of the employment conducted by the nonresident in the U.S., specific tax rules apply…

A tax haven is a country, state or region that charges substantially low or negligible taxes to corporations and individuals. Mostly used by the wealthy and large corporations, tax havens reduce the tax liability of a person or a business in the country in which they reside or operate. On the other hand, a tax…

What is the Difference Between Inheritance Tax and Estate Tax?  The property and assets that a person leaves behind after death may attract estate tax and inheritance tax. How much inheritance or estate tax is charged depends on the state in which you reside, and the value of the property/money left behind. It is essential…

Artists often have multiple income sources and usually, one of them is royalty. Royalties are considered earned income by the IRS and attract taxes the way ordinary income does. If you are an artist such as an author, musician, songwriter, or singer; your income from royalties is taxable. How much in taxes you need to…

Taxes are complicated when it comes to Native American tribes and their members because of the complexities in the Indian law and the federal tax law. The treaties between the tribes and the U.S., some of which go back centuries, add to the confusion. If you are a Native American tribe or tribe member, it…

An audit is never pleasant, but you can make it simpler and smoother by preparing for it. Essentially, audits are conducted to ensure compliance and in no way indicate that you did something illegal. The IRS doesn’t come to you with proof of any ill-doing. They may have seen a discrepancy in your reporting and…

Authors don’t usually think of themselves as entrepreneurs; however, the IRS treats them the same as a small business. Whether you are selling the occasional eBook on Kindle or have bestsellers to your name, the IRS expects you to treat your writing as a business if you earn income from it. You are required to…

Unlike in an employer-employee relationship where the employer withholds taxes from the employee’s paycheck and forwards it to the IRS, independent contractors are required to determine taxes on their own and pay them. Many times, independent contractors are not aware that they are in tax debt until they receive an IRS notice/letter regarding it. Since…

It is not always that taxpayers get into tax debt because they do not pay their full tax liability. Sometimes, claiming false tax credits can cause a tax debt. Though credits reduce the overall tax liability of a taxpayer, each credit has qualifying criteria that need to be met. Claiming false credits on a return…

The IRS conducts examinations of certain tax returns in order to ascertain compliance with tax laws. Usually, only a small percentage of tax returns are audited. In 2020, the agency audited only 0.3% of individual returns. Even though most taxpayers are unlikely to get audited, it helps to know what triggers an IRS audit just…

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