Insights
Welcome to our blog. We will share not only the latest news and articles, but also typical case studies.
Inheritance
As people become more globally mobile, financial advisers and tax consultants are being asked question about inheritance tax relating to properties inside the United States. In brief, the Federal government doesn’t impose inheritance taxes on bequests. However, U.S citizens, resident and nonresident aliens may be subject to U.S estate and gift taxes.
Tax Cuts and Jobs Act of 2017: Individual Tax
On December 20, 2017, Congress passed the Tax Cuts and Jobs Act designed to cut taxes on individuals and businesses. Under the new law, there are several changes to individual income tax, including changing the income level of individual tax brackets, lowering tax rates, and increasing the standard deductions and family tax credits while itemized deductions are reduced and the personal exemptions are eliminated.
History of the US Income Tax
The origin of the income tax on individuals is generally cited as the passage of the 16th Amendment, passed by Congress on July 2, 1909, and ratified February 3, 1913; however, its history actually goes back even further. During the Civil War Congress passed the Revenue Act of 1861 which included a tax on personal incomes to help pay war expenses. The tax was repealed ten years later. However, in 1894 Congress enacted a flat rate Federal income tax, which was ruled unconstitutional the following year by the U.S. Supreme Court because it was a direct tax not apportioned according to the population of each state. The 16th amendment, ratified in 1913, removed this objection by allowing the Federal government to tax the income of individuals without regard to the population of each State.
401k vs Roth 401k Notes
When you contribute to a traditional 401(k), you’re contributing on a pre-tax basis, meaning you get a tax break upfront but have to pay taxes when you take the money out in retirement. By contrast, with a Roth account, you pay in with after-tax dollars, and the money you contribute, including earnings, comes out tax-free in retirement.
Who needs to file an income tax return?
Do you really need to file an individual tax return? In most situation, the answer is ‘yes’. However, in some particular cases, the taxpayer is not required to file an income tax return. To determine obligation for filing the tax return each year, taxpayer need to know the amount of standard deduction and personal exemption in that year. In 2018, the Tax Cuts and Jobs Act changed some rules and amount about deduction and exemption. In following paragraph, we will introduce who needs to file tax return in different conditions.
Investment in Insurance of US, Hong Kong and Mainland China
Oversea assets allocation has been mentioned a lot in recent years in China. Investors in China are looking for a better market and more choices in their investment portfolio. Why did most of Chinese investors choose American financial market? Stable economic growth and developed financial industry were the core reasons.
Foreign Assets and Financial Accounts
Anyone who has investment out of United States may pretty much pay attention to his or her annual tax return. Tax payers in United States are responsible to report their foreign assets and financial accounts to the Treasury Department and IRS, regarding the regulation known as the Bank Secrecy Act.