August 21, 2019

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Tax Law

As certain as death, taxes are imposed on everything in the United States from cigarettes to wages. Those of most interest to average consumers include:

  • Personal income tax
  • Property tax
  • Payroll withholding tax
  • Capital gains tax
  • Estate tax

Tax law is wickedly complicated, and many deductions to which taxpayers are entitled are not claimed. The guidance of an experienced Tax Attorney will ensure you avail yourself of every benefit to which you are entitled. View qualified Tax Law Firms in your area to find Tax Lawyers. Digital Law Firms network includes both TaxLawFirms.US and International Tax Law

Personal Income Tax

Most of us are familiar with this tax, levied by the states and the federal government. It is important to keep in mind the common (and unique) deductions to which you are entitled, perhaps including:

  • Mortgage interest deduction
  • Exemptions
  • Charitable contribution deduction
  • Home business expense deduction
  • Business deduction
  • Educational expense deduction
  • Child care deduction

Property Tax

Typically levied (imposed) by local governments, property taxes are frequently used to fund the following:

  • Schools
  • Public hospitals
  • Police & fire departments
  • Sidewalks & sewers
  • Parks
  • Libraries

In addition to having taxes on real property, some jurisdictions levy taxes on personal property such as autos and boats.

Payroll Withholding

The average worker’s employer withholds significant amounts from his/her paycheck (under FICA & otherwise) and remits that to the federal and state governments. This withholding is applied to the taxpayer’s obligations such as:

  • Social Security contributions
  • Medicare contributions
  • Personal federal income tax

Capital Gains

A tax is levied on the profit made on the sale of an investment asset. The most common assets on which capital gains taxes are imposed are:

  • Securities (stocks and bonds)
  • Real property (real estate including buildings)
  • Personal property

Long-term capital gains are those on assets that have been owned for over one year, and the rate is lower than that for short-term capital gains, which are generally taxed at the ordinary income rate. In some instances, the tax may be deferred, such as:

  • Carrying forward losses from previous years
  • Like-kind exchanges where business-related property is swapped
  • Installment sales where the buyer purchases over time, so smaller gains are realized in the short-run

Estate Tax

Also called the “death tax,” the estate tax is imposed on the assets you own when you die (your estate) if they are over a certain value, depending on how they are held. There are many economical legal devices that can help you avoid inheritance tax (see Estate Planning), such as:

  • Irrevocable trusts where once transferred, you cannot control the asset
  • Certain life insurance policies
  • Lifetime asset transfers

An experienced Estate Planning Attorney can help guide you through this process.

Related areas:

Estate Planning, Probate, Business & Corporate Law, US Tax Law Firms, International Tax Law Firms