DOCSLIB.ORG

2021 Form 1040-ES” and Your SSN on Your 1-800-244-4829 (Español)

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
2021 Form 1040-ES” and Your SSN on Your 1-800-244-4829 (Español) Userid: CPM Schema: Leadpct: 100% Pt. size: 10 Draft Ok to Print instrx AH XSL/XML Fileid: … ms/F1040ES/2021/A/XML/Cycle02/source (Init. & Date) _______ Page 1 of 6 10:20 - 2-Feb-2021 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Department of the Treasury 2021 Internal Revenue Service Form 1040-ES Estimated Tax for Individuals Purpose of This Package year. You had no tax liability for 2020 if your total tax was zero or you didn’t have to file an income tax return. Use Form 1040-ES to figure and pay your estimated tax for 2021. Special Rules Estimated tax is the method used to pay tax on income There are special rules for farmers, fishermen, certain that isn’t subject to withholding (for example, earnings household employers, and certain higher income from self-employment, interest, dividends, rents, alimony, taxpayers. etc.). In addition, if you don’t elect voluntary withholding, Farmers and fishermen. If at least two-thirds of your you should make estimated tax payments on other gross income for 2020 or 2021 is from farming or fishing, taxable income, such as unemployment compensation substitute 662/3% for 90% in (2a) under General Rule. and the taxable part of your social security benefits. Household employers. When estimating the tax on your Change of address. If your address has changed, file 2021 tax return, include your household employment Form 8822, to update your record. taxes if either of the following applies. Future developments. For the latest information about • You will have federal income tax withheld from wages, developments related to Form 1040-ES and its pensions, annuities, gambling winnings, or other income. instructions, such as legislation enacted after they were • You would be required to make estimated tax payments published, go to IRS.gov/Form1040ES. to avoid a penalty even if you didn’t include household employment taxes when figuring your estimated tax. Who Must Make Estimated Tax Higher income taxpayers. If your adjusted gross Payments income (AGI) for 2020 was more than $150,000 ($75,000 The estimated tax rules apply to: if your filing status for 2021 is married filing separately), • U.S. citizens and resident aliens; substitute 110% for 100% in (2b) under General Rule, • Residents of Puerto Rico, the U.S. Virgin Islands, earlier. This rule doesn’t apply to farmers or fishermen. Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa; and Increase Your Withholding • Nonresident aliens (use Form 1040-ES (NR)). If you also receive salaries and wages, you may be able to avoid having to make estimated tax payments on your If you filed a Schedule H or Schedule SE with your other income by asking your employer to take more tax Form 1040 or 1040-SR for 2020, and deferred ! out of your earnings. To do this, file a new Form W-4, CAUTION some of the household employment and/or Employee's Withholding Certificate, with your employer. self-employment tax payments you owe for 2020, don't use Form 1040-ES to make this payment. Instead, see the Generally, if you receive a pension or annuity you can instructions for Schedule 3 (Form 1040), line 12e, for use Form W-4P, Withholding Certificate for Pension or more information on repaying these deferrals. Annuity Payments, to start or change your withholding from these payments. General Rule In most cases, you must pay estimated tax for 2021 if both You also can choose to have federal income tax of the following apply. withheld from certain government payments. For details, see Form W-4V, Voluntary Withholding Request. 1. You expect to owe at least $1,000 in tax for 2021, after subtracting your withholding and refundable credits. You can use the Tax Withholding Estimator at TIP IRS.gov/W4App to determine whether you need 2. You expect your withholding and refundable credits to have your withholding increased or decreased. to be less than the smaller of: a. 90% of the tax to be shown on your 2021 tax return, Additional Information You May Need or You can find most of the information you will need in Pub. b. 100% of the tax shown on your 2020 tax return. 505, Tax Withholding and Estimated Tax, and in the Your 2020 tax return must cover all 12 months. instructions for the 2020 Form 1040 and 1040-SR. Note. These percentages may be different if you are a For details on how to get forms and publications, see farmer, fisherman, or higher income taxpayer. See the 2020 Instructions for Form 1040 and 1040-SR. Special Rules, later. Exception. You don’t have to pay estimated tax for 2021 What's New if you were a U.S. citizen or resident alien for all of 2020 In figuring your 2021 estimated tax, be sure to consider and you had no tax liability for the full 12-month 2020 tax the following. Feb 02, 2021 Cat. No. 11340T Page 2 of 6 Fileid: … ms/F1040ES/2021/A/XML/Cycle02/source 10:20 - 2-Feb-2021 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing. Tuition and fees deduction eliminated. The deduction Reminders for tuition and fees is not available in 2021; instead, the income limitation on the lifetime learning credit has been Individual taxpayer identification number (ITIN) re- increased. newal. If you were assigned an ITIN before January 1, 2013, or if you have an ITIN that you haven’t included on a Standard deduction amount increased. For 2021, the tax return in the last 3 consecutive years, you may need to standard deduction amount has been increased for all renew it. For more information, see the Instructions for filers. If you don't itemize your deductions, you can take Form W-7. the 2021 standard deduction listed in the following chart for your filing status. Advance payments of the premium tax credit. If you buy health care insurance through the Health Insurance Marketplace, you may be eligible for advance payments THEN your standard IF your 2021 filing status is... of the premium tax credit to help pay for your insurance deduction is... coverage. Receiving too little or too much in advance will Married filing jointly or $25,100 affect your refund or balance due. Promptly report Qualifying widow(er) changes in your income or family size to your Head of household $18,800 Marketplace. See Form 8962 and its Instructions for more Single or Married filing separately $12,550 information. Access your online account However, if you can be claimed as a dependent on (Individual taxpayers only) another person's 2021 return, your standard deduction is Go to IRS.gov/Account to securely access information the greater of: about your federal tax account. • $1,100, or • View the amount you owe, pay online, or set up an • Your earned income plus $350 (up to the standard online payment agreement. deduction amount). • Access your tax records online. Your standard deduction is increased by the following • Review the past 5 years of your payment history. amount if, at the end of 2021, you are: • Go to IRS.gov/SecureAccess to review the required • An unmarried individual (single or head of household) identity authentication process. and are: How To Figure Your Estimated Tax 65 or older or blind ........................ $1,700 You will need: 65 or older and blind ....................... $3,400 • The 2021 Estimated Tax Worksheet, • The Instructions for the 2021 Estimated Tax Worksheet, • The 2021 Tax Rate Schedules, and • A married individual (filing jointly or separately) or a • Your 2020 tax return and instructions to use as a guide qualifying widow(er) and are: to figuring your income, deductions, and credits (but be ! sure to consider the items listed under What's New, CAUTION65 or older or blind ........................ $1,350 earlier). 65 or older and blind ....................... $2,700 Matching estimated tax payments to income. If you Both spouses 65 or older .................... $2,700* receive your income unevenly throughout the year (for Both spouses 65 or older and blind .............. $5,400* example, because you operate your business on a *Only if married filing jointly. If married filing separately, these amounts do not apply. seasonal basis or you have a large capital gain late in the year), you may be able to lower or eliminate the amount of your required estimated tax payment for one or more periods by using the annualized income installment Your standard deduction is zero if (a) your spouse method. See chapter 2 of Pub. 505 for details. itemizes on a separate return, or (b) you were a dual-status alien and you do not elect to be taxed Changing your estimated tax. To amend or correct as a resident alien for 2021. your estimated tax, see How To Amend Estimated Tax Payments, later. Social security tax. For 2021, the maximum amount of You can’t make joint estimated tax payments if earned income (wages and net earnings from you or your spouse is a nonresident alien, you are self-employment) subject to the social security tax is separated under a decree of divorce or separate $142,800. maintenance, or you and your spouse have different tax Adoption credit or exclusion. For 2021, the maximum years. adoption credit or exclusion for employer-provided adoption benefits has increased to $14,440. In order to Additionally, individuals who are in registered domestic claim either the credit or exclusion, your modified adjusted partnerships, civil unions, or other similar formal gross income must be less than $256,660.
Load more

Recommended publications
  • 2021 Revenue Ordinance
    2021 Revenue Ordinance As Proposed on December 5, 2019 ii Revenue Ordinance of 2021 to Levy Taxes and Fees and Raise Revenue For the City of Savannah Georgia As adopted on December 18, 2020 Published by City of Savannah Revenue Department Post Office Box 1228 Savannah, GA 31402-1228 CITY OF SAVANNAH 2021 CITY COUNCIL Mayor Van R. Johnson, II Post 1 At-Large Post 2 At-Large Kesha Gibson-Carter Alicia Miller Blakely District 1 District 2 Bernetta B. Lanier Detric Leggett District 3 District 4 Linda Wilder-Bryan Nick Palumbo District 5 District 6 Dr. Estella Edwards Shabazz Kurtis Purtee Revenue Ordinance Compiled By Revenue Director/City Treasurer Ashley L. Simpson Utility Billing Manager Nicole Brantley Treasury Manager Joel Paulk Business Tax & Alcohol License Manager Judee Jones Revenue Special Projects Coordinator Saja Aures Table of Contents Revenue Ordinance of 2021 ....................................................................................................................... 1 ARTICLE A. GENERAL ............................................................................................................................... 1 Section 1. SCOPE; TAXES AND FEES .................................................................................................... 1 Section 2. DEFINITIONS ........................................................................................................................... 1 Section 3. JANUARY 1 GOVERNS FOR YEAR ......................................................................................
    [Show full text]
  • The Disclosure of State Corporate Income Tax Data: Turning the Clock Back to the Future Richard Pomp University of Connecticut School of Law
    University of Connecticut OpenCommons@UConn Faculty Articles and Papers School of Law Spring 1993 The Disclosure of State Corporate Income Tax Data: Turning the Clock Back to the Future Richard Pomp University of Connecticut School of Law Follow this and additional works at: https://opencommons.uconn.edu/law_papers Part of the Taxation-Federal Commons, and the Taxation-State and Local Commons Recommended Citation Pomp, Richard, "The Disclosure of State Corporate Income Tax Data: Turning the Clock Back to the Future" (1993). Faculty Articles and Papers. 121. https://opencommons.uconn.edu/law_papers/121 +(,121/,1( Citation: 22 Cap. U. L. Rev. 373 1993 Content downloaded/printed from HeinOnline (http://heinonline.org) Mon Aug 15 17:19:23 2016 -- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and Conditions of the license agreement available at http://heinonline.org/HOL/License -- The search text of this PDF is generated from uncorrected OCR text. -- To obtain permission to use this article beyond the scope of your HeinOnline license, please use: https://www.copyright.com/ccc/basicSearch.do? &operation=go&searchType=0 &lastSearch=simple&all=on&titleOrStdNo=0198-9693 THE DISCLOSURE OF STATE CORPORATE INCOME TAX DATA: TURNING THE CLOCK BACK TO THE FUTURE RICHARD D. POMP* INTRODUCTION .............................................. 374 I. THE DISCLOSURE OF INCOME TAX INFORMATION AT THE FEDERAL LEVEL: AN HISTORICAL PERSPECTIVE .......... 378 A. The Civil War Income Taxes: 1861-1872 ............... 379 B. The 1894 Income Tax ................................ 384 C. The Tariff Act of 1909 ............................... 386 D . 1913-1923 .......................................... 389 E. The 1924 and 1926 Acts ............................... 391 F. The Pink Slip Provisions: 1934-1935 ................
    [Show full text]
  • TTB F 5000.24Sm Excise Tax Return
    OMB No. 1513-0083 DEPARTMENT OF THE TREASURY 1. SERIAL NUMBER ALCOHOL AND TOBACCO TAX AND TRADE BUREAU (TTB) EXCISE TAX RETURN (Prepare in duplicate – See instructions below) 3. AMOUNT OF PAYMENT 2. FORM OF PAYMENT $ CHECK MONEY ORDER EFT OTHER (Specify) NOTE: PLEASE MAKE CHECKS OR MONEY ORDERS PAYABLE TO THE ALCOHOL AND TOBACCO TAX AND 4. RETURN COVERS (Check one) BEGINNING TRADE BUREAU (SHOW EMPLOYER IDENTIFICATION NUMBER ON ALL CHECKS OR MONEY ORDERS). IF PREPAYMENT PERIOD YOU SEND A CHECK, SEE PAPER CHECK CONVERSION ENDING NOTICE BELOW. 5. DATE PRODUCTS TO BE REMOVED (For Prepayment Returns Only) FOR TTB USE ONLY 6. EMPLOYER IDENTIFICATION NUMBER 7. PLANT, REGISTRY, OR PERMIT NUMBER TAX $ PENALTY 8. NAME AND ADDRESS OF TAXPAYER (Include ZIP Code) INTEREST TOTAL $ EXAMINED BY: DATE EXAMINED: CALCULATION OF TAX DUE (Before making entries on lines 18 – 21, complete Schedules A and B) PRODUCT AMOUNT OF TAX (a) (b) 9. DISTILLED SPIRITS 10. WINE 11. BEER 12. CIGARS 13. CIGARETTES 14. CIGARETTE PAPERS AND/OR CIGARETTE TUBES 15. CHEWING TOBACCO AND/OR SNUFF 16. PIPE TOBACCO AND/OR ROLL-YOUR-OWN TOBACCO 17. TOTAL TAX LIABILITY (Total of lines 9-16) $ 18. ADJUSTMENTS INCREASING AMOUNT DUE (From line 29) 19. GROSS AMOUNT DUE (Line 17 plus line 18) $ 20. ADJUSTMENTS DECREASING AMOUNT DUE (From line 34) 21. AMOUNT TO BE PAID WITH THIS RETURN (Line 19 minus line 20) $ Under penalties of perjury, I declare that I have examined this return (including any accompanying explanations, statements, schedules, and forms) and to the best of my knowledge and belief it is true, correct, and includes all transactions and tax liabilities required by law or regulations to be reported.
    [Show full text]
  • Panama Papers Leaks
    GRAY TOLUB1 LLP Focusing on Domestic & International Taxation, Real Estate, Corporate, and Trust & Estate Matters. Client AlertAPRIL 04, 2016 AUTHORS Armin Gray Benjamin Tolub PANAMA PAPERS LEAKS: SUBJECT THE TAX MAN COMETH OVDP Panama On April 03, 2016, the press reported that 11.5 million records were leaked from Panamanian law firm Mossack Fonseca. The records detail offshore holdings of the celebrities, politicians, and the mega-rich many of which were purportedly engaged in illegal activities including tax evasion. Such leaks have been referred to as the “Panama papers” or the “Wikileaks of the mega-rich” by some newspapers.1 More details can be found at the website of the International Consortium of Investigative Journalists (“ICIJ”), which have summarized their findings as follows: The largest cross-border journalism collaboration ever has uncovered a giant leak of documents from Mossack Fonseca, a global law firm based in Panama. The secret files: • Include 11.5 million records, dating back nearly 40 years – making it the largest leak in offshore history. Contains details on more than 214,000 offshore entities connected to people in more than 200 countries and territories. Company owners 1 See Toppo, Greg, “Worldwide, jaws drop to Panama Papers’ Leak”, USA Today, last accessed April 3, 2016, available at: http://www.usatoday.com/story/news/2016/04/03/reactions- panama-papers-leak-go-global/82589874/. www.graytolub.com Client Alert Page 2 in [sic] billionaires, sports stars, drug smugglers and fraudsters. • Reveal the offshore holdings 140 politicians and public officials around the world – including 12 current and former world leaders.
    [Show full text]
  • An Analysis of the Graded Property Tax Robert M
    TaxingTaxing Simply Simply District of Columbia Tax Revision Commission TaxingTaxing FairlyFairly Full Report District of Columbia Tax Revision Commission 1755 Massachusetts Avenue, NW, Suite 550 Washington, DC 20036 Tel: (202) 518-7275 Fax: (202) 466-7967 www.dctrc.org The Authors Robert M. Schwab Professor, Department of Economics University of Maryland College Park, Md. Amy Rehder Harris Graduate Assistant, Department of Economics University of Maryland College Park, Md. Authors’ Acknowledgments We thank Kim Coleman for providing us with the assessment data discussed in the section “The Incidence of a Graded Property Tax in the District of Columbia.” We also thank Joan Youngman and Rick Rybeck for their help with this project. CHAPTER G An Analysis of the Graded Property Tax Robert M. Schwab and Amy Rehder Harris Introduction In most jurisdictions, land and improvements are taxed at the same rate. The District of Columbia is no exception to this general rule. Consider two homes in the District, each valued at $100,000. Home A is a modest home on a large lot; suppose the land and structures are each worth $50,000. Home B is a more sub- stantial home on a smaller lot; in this case, suppose the land is valued at $20,000 and the improvements at $80,000. Under current District law, both homes would be taxed at a rate of 0.96 percent on the total value and thus, as Figure 1 shows, the owners of both homes would face property taxes of $960.1 But property can be taxed in many ways. Under a graded, or split-rate, tax, land is taxed more heavily than structures.
    [Show full text]
  • Download Article (PDF)
    5th International Conference on Accounting, Auditing, and Taxation (ICAAT 2016) TAX TRANSPARENCY – AN ANALYSIS OF THE LUXLEAKS FIRMS Johannes Manthey University of Würzburg, Würzburg, Germany Dirk Kiesewetter University of Würzburg, Würzburg, Germany Abstract This paper finds that the firms involved in the Luxembourg Leaks (‘LuxLeaks’) scandal are less transparent measured by the engagement in earnings management, analyst coverage, analyst accuracy, accounting standards and auditor choice. The analysis is based on the LuxLeaks sample and compared to a control group of large multinational companies. The panel dataset covers the years from 2001 to 2015 and comprises 19,109 observations. The LuxLeaks firms appear to engage in higher levels of discretionary earnings management measured by the variability of net income to cash flows from operations and the correlation between cash flows from operations and accruals. The LuxLeaks sample shows a lower analyst coverage, lower willingness to switch to IFRS and a lower Big4 auditor rate. The difference in difference design supports these findings regarding earnings management and the analyst coverage. The analysis concludes that the LuxLeaks firms are less transparent and infers a relation between corporate transparency and the engagement in tax avoidance. The paper aims to establish the relationship between tax avoidance and transparency in order to give guidance for future policy. The research highlights the complex causes and effects of tax management and supports a cost benefit analysis of future tax regulation. Keywords: Tax Avoidance, Transparency, Earnings Management JEL Classification: H20, H25, H26 1. Introduction The Luxembourg Leaks (’LuxLeaks’) scandal made public some of the tax strategies used by multinational companies.
    [Show full text]
  • Form Ssa-714 (07-2005)
    YOU CAN MAKE YOUR PAYMENT BY CREDIT CARD As a convenience, we offer you the option to make your payment by credit card. However, regular credit card rules will apply. You may also pay by check or money order. We Honor Most Major Credit Cards Please fill in all the information below and return it with your request. Note: Please read Privacy Act Notice CHECK ONE ---------------------------------------------- > MasterCard Visa Discover American Express Diners Card Credit Card Holder’s Name ---------------------------- > Print First, Middle Initial, Last Name Credit Card Holder’s Address ------------------------- > Number & Street City, State, Zip Code Daytime Telephone Number --------------------------- > - - Area Code Telephone Number Amount Charged $ - - - Credit Card Number Credit Card Expiration Date Month Year Credit Card Holder’s Signature ----------------------- > Authorization DO NOT WRITE IN THIS SPACE OFFICE USE ONLY --------------------------------------- > Name Date PRIVACY ACT STATEMENT The Social Security Administration (SSA) has authority to collect the information requested on this form under § 205 of the Social Security Act. Giving us this information is voluntary. You do not have to do it. We will need this information only if you choose to make payment by credit card. You do not need to fill out this form if you choose another means of payment (for example, by check or money order). If you choose the credit card payment option, we will provide the information you give us to the banks handling your credit card account and SSA’s account. We may also provide this information to another person or government agency to comply with federal laws requiring the release of information from our records. You can find these and other routine uses of information provided to SSA listed in the Federal Register.
    [Show full text]
  • MAGI 2.0 Part 2: Income Counting
    MAGI 2.0: Building MAGI Knowledge Part 2: Income Counting Last Updated: December 11, 2020 Introduction Setting the Stage 3 . In 2020, the Centers for Medicare and Medicaid Services (CMS) updated a training manual originally developed in 2013 to help states and eligibility workers understand and apply Modified Adjust Gross Income (MAGI)-based rules for Medicaid and the Children’s Health Insurance Program (CHIP). The manual is available at https://www.medicaid.gov/state-resource-center/mac- learning-collaboratives/downloads/household-composition-and-income-training.zip. This MAGI 2.0: Building MAGI Knowledge slide deck serves as a companion to the Household and MAGI Income Training Manual, providing more details on how to apply the MAGI-based income counting rules. The issues and scenarios reviewed in this slide deck were developed in response to frequently asked technical assistance questions raised by states and revised based on updated guidance that was released. Two-Part Resource 4 Determining Household Composition Calculating Household Income Focus of This Resource Determining Household Income 5 Key Questions When Determining Household Income: Whose income is counted? What income is counted? Over what period is income counted? Whose Income Is Counted? 6 Generally, to determine MAGI-based household income: . Count the MAGI-based income of adults in the household. Do not count the MAGI-based income of children in the household. Let’s discuss this rule… Income Counting Rules 7 Regulatory Requirements . Household income includes the Relevant Regulatory Language: MAGI-based income of all 42 CFR 435.603(d)(1) individuals in the MAGI-based Household income is the sum of the MAGI-based income…of every household, with specific individual included in the individual’s household [unless an exception exceptions.
    [Show full text]
  • Form W-4, Employee's Withholding Certificate
    Employee’s Withholding Certificate OMB No. 1545-0074 Form W-4 ▶ (Rev. December 2020) Complete Form W-4 so that your employer can withhold the correct federal income tax from your pay. ▶ Department of the Treasury Give Form W-4 to your employer. 2021 Internal Revenue Service ▶ Your withholding is subject to review by the IRS. Step 1: (a) First name and middle initial Last name (b) Social security number Enter Address ▶ Does your name match the Personal name on your social security card? If not, to ensure you get Information City or town, state, and ZIP code credit for your earnings, contact SSA at 800-772-1213 or go to www.ssa.gov. (c) Single or Married filing separately Married filing jointly or Qualifying widow(er) Head of household (Check only if you’re unmarried and pay more than half the costs of keeping up a home for yourself and a qualifying individual.) Complete Steps 2–4 ONLY if they apply to you; otherwise, skip to Step 5. See page 2 for more information on each step, who can claim exemption from withholding, when to use the estimator at www.irs.gov/W4App, and privacy. Step 2: Complete this step if you (1) hold more than one job at a time, or (2) are married filing jointly and your spouse Multiple Jobs also works. The correct amount of withholding depends on income earned from all of these jobs. or Spouse Do only one of the following. Works (a) Use the estimator at www.irs.gov/W4App for most accurate withholding for this step (and Steps 3–4); or (b) Use the Multiple Jobs Worksheet on page 3 and enter the result in Step 4(c) below for roughly accurate withholding; or (c) If there are only two jobs total, you may check this box.
    [Show full text]
  • Contactless Operating Mode Requirements Clarification Whitepaper
    Contactless Operating Mode Requirements Clarification Whitepaper Version 1.0 Publication Date: February 2020 U.S. Payments Forum ©2020 Page 1 About the U.S. Payments Forum The U.S. Payments Forum, formerly the EMV Migration Forum, is a cross-industry body focused on supporting the introduction and implementation of EMV chip and other new and emerging technologies that protect the security of, and enhance opportunities for payment transactions within the United States. The Forum is the only non-profit organization whose membership includes the entire payments ecosystem, ensuring that all stakeholders have the opportunity to coordinate, cooperate on, and have a voice in the future of the U.S. payments industry. Additional information can be found at http://www.uspaymentsforum.org. EMV ® is a registered trademark in the U.S. and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo, LLC. Copyright ©2020 U.S. Payments Forum and Smart Card Alliance. All rights reserved. The U.S. Payments Forum has used best efforts to ensure, but cannot guarantee, that the information described in this document is accurate as of the publication date. The U.S. Payments Forum disclaims all warranties as to the accuracy, completeness or adequacy of information in this document. Comments or recommendations for edits or additions to this document should be submitted to: [email protected]. U.S. Payments Forum ©2020 Page 2 Table of Contents 1. Introduction .......................................................................................................................................... 4 2. Contactless Operating Modes ............................................................................................................... 5 2.1 Impact of Contactless Operating Mode on Debit Routing Options .............................................. 6 3. Contactless Issuance Requirements ..................................................................................................... 7 4.
    [Show full text]
  • The Alternative Minimum Tax
    Updated December 4, 2017 Tax Reform: The Alternative Minimum Tax The U.S. federal income tax has both a personal and a Individual AMT corporate alternative minimum tax (AMT). Both the The modern individual AMT originated with the Revenue corporate and individual AMTs operate alongside the Act of 1978 (P.L. 95-600) and operated in tandem with an regular income tax. They require taxpayers to calculate existing add-on minimum tax prior to its repeal in 1982. their liability twice—once under the rules for the regular Table 2 details selected key individual AMT parameters. income tax and once under the AMT rules—and then pay the higher amount. Minimum taxes increase tax payments Table 2. Selected Individual AMT Parameters, 2017 from taxpayers who, under the rules of the regular tax system, pay too little tax relative to a standard measure of Single/ Married their income. Head of Filing Married Filing Household Jointly Separately Corporate AMT Exemption $54,300 $84,500 $42,250 The corporate AMT originated with the Tax Reform Act of 1986 (P.L. 99-514), which eliminated an “add-on” 28% bracket 187,800 187,800 93,900 minimum tax imposed on corporations previously. The threshold corporate AMT is a flat 20% tax imposed on a Source: Internal Revenue Code. corporation’s alternative minimum taxable income less an exemption amount. A corporation’s alternative minimum The individual AMT tax base is broader than the regular taxable income is the corporation’s taxable income income tax base and starts with regular taxable income and determined with certain adjustments (primarily related to adds back various deductions, including personal depreciation) and increased by the disallowance of a exemptions and the deduction for state and local taxes.
    [Show full text]
  • Chapter 2: What's Fair About Taxes?
    Hoover Classics : Flat Tax hcflat ch2 Mp_35 rev0 page 35 2. What’s Fair about Taxes? economists and politicians of all persuasions agree on three points. One, the federal income tax is not sim- ple. Two, the federal income tax is too costly. Three, the federal income tax is not fair. However, economists and politicians do not agree on a fourth point: What does fair mean when it comes to taxes? This disagree- ment explains, in large measure, why it so difficult to find a replacement for the federal income tax that meets the other goals of simplicity and low cost. In recent years, the issue of fairness has come to overwhelm the other two standards used to evaluate tax systems: cost (efficiency) and simplicity. Recall the 1992 presidential campaign. Candidate Bill Clinton preached that those who “benefited unfairly” in the 1980s [the Tax Reform Act of 1986 reduced the top tax rate on upper-income taxpayers from 50 percent to 28 percent] should pay their “fair share” in the 1990s. What did he mean by such terms as “benefited unfairly” and should pay their “fair share?” Were the 1985 tax rates fair before they were reduced in 1986? Were the Carter 1980 tax rates even fairer before they were reduced by President Reagan in 1981? Were the Eisenhower tax rates fairer still before President Kennedy initiated their reduction? Were the original rates in the first 1913 federal income tax unfair? Were the high rates that prevailed during World Wars I and II fair? Were Andrew Mellon’s tax Hoover Classics : Flat Tax hcflat ch2 Mp_36 rev0 page 36 36 The Flat Tax rate cuts unfair? Are the higher tax rates President Clin- ton signed into law in 1993 the hallmark of a fair tax system, or do rates have to rise to the Carter or Eisen- hower levels to be fair? No aspect of federal income tax policy has been more controversial, or caused more misery, than alle- gations that some individuals and income groups don’t pay their fair share.
    [Show full text]