Tag Archives: IN

Indirect Tax

Indirect Tax

About Indirect Tax:

A tax that can be shifted to others, such as sales taxes, VAT (in Europe and other regions) and business property taxes. See Indirect Tax in the U.S. Reference and Indirect Tax in the International reference.

U.S. and other Developed Countries International Tax Meaning

Tax imposed on certain transactions, goods or events. Examples include VAT, sales tax, excise duties, stamp duty, services tax, registration duty and transaction tax.

See Indirect Tax in the U.S. Reference and Indirect Tax in the International reference.

See Property Tax in the American Legal Encyclopedia and Property Tax in the World Legal Encyclopedia.

See Sales tax in the U.S. Encyclopedia and Sales tax in the International Encyclopedia

Description and Definition of Indirect Tax

A type of tax that can be shifted to others. A company might have to pay a specific tax to the government. The company pays the tax but increases the cost of their products so consumers are actually paying the tax indirectly by paying more for the company's products.

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Insurance Returns

Insurance Returns

Transmittal of Employer-Provided Health Insurance Offer and Coverage Insurance Returns, I.R.S. Form 1094-C Issue

You may find information about Transmittal of Employer-Provided Health Insurance Offer and Coverage Insurance Returns, I.R.S. Form 1094-C in this Tax Platform of the American Encyclopedia of Law.

Investment Interest Expense

Investment Interest Expense

Investment Interest Expense means (see more about entries related to interest in the U.S. here)

interest paid to carry portfolio investments such as bonds, stocks, and undeveloped land. (Investment interest is Interest paid on loans used for investment purposes, such as to buy stock on margin).Tax deductions by non-corporate taxpayers for investment interest expense are limited to the income received from the investment, such as dividends, interest, and capital gains. However, beginning in 1993, capital gains cannot be used for this purpose unless the taxpayer reduces the amount of capital gains that is eligible for the 28% maximum capital gains rate.

Investment interest

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The taxpayer can deduct this interest on Schedule A if you itemize, up to the amount of investment income (not including capital gains or dividends that qualify for the 0% or 15% rates) in the taxpayer report.

See also Capital Gain in the American Legal Encyclopedia and Capital Gain in the World Legal Encyclopedia.

See Corporate Tax in the U.S. Legal Encyclopedia and Corporate Tax in the International Legal Encyclopedia.

See Dividend in the American Legal Encyclopedia and Dividend in the World Legal Encyclopedia.

Description and Definition of Investment Interest Expense

Interest paid on loans used for investment purposes such as margin loans to buy stock – but not including interest expense from a passive activity. The investment interest expense deduction is limited to the income from investments.

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Incentive Stock Option

Incentive Stock Option

About Incentive Stock Option:

The Incentive Stock Option (ISO) is an equity-type compensation plan under which qualifying stock options are free of tax at the date of grant and the date of exercise but are taxed when sold. Only $100,000 of ISOs can be exercised in one year, and a number of conditions must be met. Former IRC (check if this IRC provision is current here) §422(a).

An option that allows an employee to purchase stock of the employer below current market price. For regular income tax purposes, the “spread” or “bargain element” – the difference between the price paid and market value of the stock – is not taxed when the option is exercised. Rather, it is taxed when the stock is sold. For alternative minimum tax purposes, however, the spread is taxed in the year the option is exercised.

U.S. and other Developed Countries International Tax Meaning

An equity-type compensation plan under which qualifying stock options are free of tax at the date of grant and the date of exercise but are taxed when sold. US system.

Description and Definition of Incentive Stock Option

A type of stock option that is not taxed when received or exercised. Options meeting the tax law test enjoy deferred tax on the option transaction until the underlying stock is sold.

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Individual Retirement Arrangement

Individual Retirement Arrangement

Description and Definition of Individual Retirement Arrangement (IRA)

A retirement account to which $2,000 or 100% of the compensation you earned during the year, whichever is less, may be contributed annually. Deductions for the contribution are restricted if you are covered by a company retirement plan or if your income is above a certain level. Earnings accumulate tax free on IRA contributions. In most cases there is a penalty for withdrawing funds before you reach age 59-1/2.

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Inter Vivos Trust

Inter Vivos Trust

Description and Definition of Inter Vivos Trust

A lifetime trust. An Inter Vivos Trust is created during the lifetime of the benefactor, as opposed to a testamentary trust that is created after the death of the benefactor. If irrevocable, income on the trust principal is shifted to the trust beneficiaries.

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Insurance Contributions

Insurance Contributions

Description and Definition of Federal Insurance Contributions Act (FICA)

The Federal Insurance Contributions Act (FICA) consists of both a Social Security (retirement) tax and a Medicare (hospital insurance) tax. The tax is levied on employers, employees, and certain self-employed individuals. The law requires that you to pay FICA on your earned income.

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Inventory

Inventory

Inventory means:
property held for sale or for use in the manufacture of goods held for sale. Such property does not qualify for capital gains treatment. Examples of inventory are:

• raw materials.

• work-in-progress.

• supplies used in operations.

• finished goods.

There are a number of inventory valuation methods; the most widely used are first in, first out (FIFO) and last in, first out (LIFO). Financial statements normally indicate the basis of inventory valuation, generally the lower figure of either cost or current market price.

See also Capital Gain in the American Legal Encyclopedia and Capital Gain in the World Legal Encyclopedia.

Description and Definition of First-in, First-out Inventory Valuation Method (FIFO)

An inventory valuation method that assumes any inventory sold was from the first inventory purchased.

Description and Definition of Inventory

Items held for resale in a business.

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Independent Contractor

Independent Contractor

Independent Contractor means:
a contractor who is self-employed. The contracting party need not withhold Social Security taxes and federal income tax; the independent contractor is subject to the self-employment tax. Former Revenue Ruling (check if this Rev. Rul. interpretation is current) 87-41 provides a 20-factor common-law test to classify a worker as an employee or an independent contractor. See self-employed person; qualified real estate agent.

Individuals who follow an independent trade, business, or profession in which they offer their services to the public and are typically not employees.

Performs services for others. The recipients of the services do not control the means or methods the independent contractor uses to accomplish the work. The recipients do control the results of the work; they decide whether the work is acceptable. Independent contractors are self-employed.

See the entries Income Tax and State Income Tax in the American Encyclopedia of Law.

Description and Definition of Independent Contractor

One who controls the means and methods of performing his or her own work and files tax returns as a self-employed person. If you are an independent contractor the person or company you work for controls what you do, not how you do it.

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Interest Income

Interest Income

Interest Income may have one of the following meanings, depending the context of the term:

1. income derived from an investment on which the payments reflect the time value of money.

2. income derived from transactions in which the payments are for the use or forbearance of money.

Description and Definition of Interest Income

Earnings on investments such as savings accounts, certificates of deposit, bonds, and seller-financed mortgages. Interest is reported to the recipient on Form 1099-INT.

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