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American Federal Taxation

     Federal taxation in the United States is entirely administered by the Internal Revenue Service (IRS). One type of taxation that the IRS administers is income tax. This is calculated by taking the taxable income of an individual, multiplying it by the tax rate and subtracting the applicable credits that can reduce your taxes. Taxable income is your gross income minus all the deductions and exemptions that you are eligible for. The US income tax system is a progressive system where higher level s of income are subject to higher tax rates. For example, those in the lowest income bracket would only have to pay 10% whereas for those in the highest bracket they will have to pay 39.6% of taxable income in the highest bracket. Much like individuals, corporations are also subject to income tax.


     Aside from income taxes, the federal government also assesses payroll taxes. There are generally three types of payroll taxes in the US: withholding taxes, social security and medicare taxes, and unemployment taxes. Withholding taxes are a tax whereby the employer withholds some of the wages paid and uses that to pay the government. These taxes serve to help ensure that taxes will be paid to the government. These may be refunded to the worker if it is later discovered it causes them to overpay their income taxes. Social Security and Medicare taxes are used to fund the healthcare and savings programs for employees. Unemployment tax is yet another tax to fund unemployment insurance. All these taxes are deducted from an employee's payroll.


     Although the federal government does not administer any sales tax, it does administer excise taxes. Excise taxes are an indirect tax that is hidden within a product price unlike a sales tax. These include taxes on items such as gas, liquor, cigarettes, etc. Lastly, the federal government also administers estate and gift taxes. An estate tax is levied on the estate and is a type of excise tax. Gift taxes are exacted on the donor of property.  

Income in respect of decedent

Please provide how you obtain the answers. 2. For each of the following independent situations, indicate whether Income (Deduction) in Respect to a Decedent would result. Provide a brief (one sentence) explanation why or why not. a. Included in Decedent's taxable estate was an IRA (fully deductible, zero-basis traditional I

Divorce law, tax audits and commercial property

Please cite all code sections, cases and regulations relevant: 1. Your client, Jane, is being audited for tax years 2009, 2010 and 2011. During these tax years Jane was married to Bart. Jane believed that Bart committed "suspicious" decisions regarding their tax returns. She says these were just one of those problems that led

Partnership distribution

PLEASE cite to source law (codes, regulations, relevant cases etc.) do not make jumps in logic, show all steps! Do not stop analysis because one element fails, if applicable test requires elements. Elias contributed $100,000 to become a 1/3 partner in CDE Partnership. The partnership agreement specifies that Elias's 1/3 shar

Partnership Agreements

Jack and Sawyer start a business in the US state "Random island that has the ability to disappear and move and probably isn't even in our dimension" wrote a partnership agreement that in part has the following clauses: 1) We will keep track of the capital account of our partnership interests in accordance with the regulations; 2