The Earned Income Tax Credit or EITC is designed to assist working class families with children by putting money in their pockets. The EITC is a tax credit, not, a tax deduction. The difference is huge! A tax credit is a dollar for dollar reduction in the taxes owed.
Ever heard of the Fixing America’s Surface Transportation (FAST) Act of 2015? Well, under FAST the IRS has the authority to notify the State Department of taxpayers certified as owing the federal government. The FAST requires the State Department to revoke the delinquent taxpayer’s U.S. passport and limit the taxpayer’s ability to travel outside the United States.
The 1970 Currency and Foreign Transactions Reporting Act, which is otherwise known as the Bank Secrecy Act requires U.S. residents, citizens and businesses with foreign bank accounts and certain other overseas assets to report those interest to the Financial Crimes Network annually on Form 114 by April 15th of the following year.
Giving in the United States creates tax obligations on the giver. Internal Revenue Code Section 2503 defines “taxable gifts” as the “total amount of gifts made during the calendar year, less deductions provided in subchapter C (section 2522 and following).” Under United States federal tax laws, the donor (giver) is taxed on the fair market value of the gift.
The United States Treasury has collaborated with over seventy countries to enforce the Foreign Tax Compliance Act (FATCA) which became U.S. tax law in 2010. FATCA in a nutshell requires Specified Individuals with foreign assets over a certain threshold amount to report those foreign assets annually on their federal tax returns filed with the Internal Revenue Service.
Specified individuals with foreign assets meeting a certain reporting threshold must report their foreign financial assets to the Internal Revenue Service annually using Form 8938.
Texas is a community property state, which means that income earned by either spouse during their marriage is an item of community income. There are certain circumstances under which a spouse may be relieved of federal tax liability.
International Social Security Agreements between the United States and certain foreign countries could waive or relieve certain taxpayer citizens of foreign countries with agreements under Section 233 of the Social Security Administration Act. These International Social Security Agreements are known as ‘totalization agreements’. Totalization Agreements’ purpose is to limit old age, survivors and disability insurance type taxation to the country where the work was done.