Reallocating income can minimize tax for self-employeds

Article Abstract:

The IRS, faced with strong political resistance against Federal Income tax increases, is expected to concentrate its tax sourcing efforts on employment taxes. A trend towards increasing employment tax rates is therefore probable. Self-employed taxpayers, already burdened by a heavy employment tax burden, can deflect the impact of higher self-employment tax rates by adopting suitable tax management measures to reduce their self-employment tax liability. Tax planning strategies that can be adopted include maximization of tax deductions and tax exclusions from the self-employment tax and reallocation of income to minimize self-employent tax levels.

Finance, taxation, & monetary policy, Analysis, Management, Taxation, Self-employed persons, Self employed persons, Tax assessment, United States. Internal Revenue Service

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Financial reporting of income taxes is altered by a new FASB statement

Article Abstract:

The Financial Accounting Standards Board has made significant changes in income tax accounting, including: computations of tax provisions, the classification of taxes on the balance sheet, the measurement of tax assets and liabilities, accounting for changes in the tax law, and accounting for the tax effects of business combinations. The definition and treatment of current and deferred taxes are discussed. The steps to computing deferred taxes under the new standard are described.

Standards, Tax accounting, Financial Accounting Standards Board

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Adjusted gross income determination increases in importance as a result of Tax Reform Act

Article Abstract:

Adjusted gross income (AGI) has become increasingly important in tax planning with the passage of the Tax Reform Act of 1986. The measure of AGI places restrictions on deductions and credits to which taxpayers would otherwise be entitled. Because all increases in AGI have a negative impact on the taxpayer, tax planners should carefully evaluate the potential impact of transactions during the current tax year, and the timing of expenditures and income in future tax years.

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