Tax Law

Exclusions, Deductions, Exemptions, and Tax Credits The federal income tax system does not simply take everything a taxpayer receives and apply a tax rate to it. Instead, federal tax law uses several different mechanisms to determine how much income is ultimately subject to tax and how much tax a taxpayer Read more

Gross Income and Taxable Income Few distinctions are more important in U.S. federal income tax law than the difference between gross income and taxable income. In ordinary conversation, people often use the word “income” to mean the money they earn or receive during a year. Federal tax law uses the Read more

The Federal Income Tax: Basic Principles The federal income tax is one of the central institutions of the United States tax system. For millions of individuals and businesses, it is also one of the most frequently encountered areas of federal law. A person may encounter federal income taxation when receiving Read more

The IRS and the Administration of Federal Tax Law The federal tax system of the United States is built on a distinction that is essential to understanding how taxation actually works: Congress creates federal tax laws, while the Internal Revenue Service administers and enforces those laws. The Internal Revenue Service, Read more

The Internal Revenue Code, Treasury Regulations, and Other Sources of Tax Law Understanding U.S. tax law begins with understanding where the law comes from. The federal tax system is not contained in a single document. The Internal Revenue Code provides the central body of federal tax statutes, but those statutes Read more

The Constitutional Basis of Federal Taxation Federal taxation in the United States is ultimately a constitutional matter. The federal government does not possess unlimited authority to impose financial obligations on individuals and businesses simply because taxation is useful or necessary. The power to tax belongs to the federal government because Read more

What Is U.S. Tax Law? The Foundations of Federal Taxation Tax law is one of the most important parts of the American legal system because it affects virtually every aspect of economic life. Individuals pay taxes on income and certain transactions. Employers withhold and pay employment taxes. Businesses calculate their Read more

Taxable Employee Allowances and Fringe Benefits: Understanding U.S. Federal Tax Treatment Modern compensation extends far beyond salary and hourly wages. Employers may provide employees with vehicle allowances, expense reimbursements, mobile phones, internet services, meals, transportation benefits, educational assistance, employer-provided equipment, discounts, gift certificates, and many other forms of compensation. For Read more

Schedule C: Reporting Business Income and Expenses for Sole Proprietors and Other Self-Employed Individuals Key Takeaways Introduction Many people earn income from activities that are not conducted through a traditional corporation or partnership. A person may operate a consulting business, work as an independent contractor, sell products, provide professional services, Read more