Unlike most countries, the U.S. taxes its citizens on all income, no matter where they live and where their income is earned. The current United States tax laws, because of requirements for reporting income, filing tax documentation, as well as the ensuing tax obligations, have made many Americans renounce their citizenship. Section 349(a)(5) of the Immigration and Nationality Act details a U.S. citizen’s right to voluntarily renounce his or her citizenship. Signing an oath of renunciation is an irrevocable act unless the individual is under the age of 18.
You’ve filed your tax return, how long does the IRS have to audit you?
You’ve filed all of your tax returns, and because of your level of income you find yourself in the class of taxpayers whose return is more likely to trigger an IRS audit. So you wonder, how long does the IRS now have to audit you?
Due to disclosure requirements, the IRS makes contact with a taxpayer selected for an audit by telephone or mail only. When returns are filed, they are compared against norms for similar returns. These norms are developed from audits of a statistically valid random sample of returns, selected as part of the National Research Program conducted by the IRS to update return selection information.
Top Tax Cases Of 2015: Bhutta v. IRS – Treaties And How They Affect Income Of Foreign Nationals
Legal System.
Issue
How can treaties between the United States and other countries affect the income of foreign nationals in the United States?
Facts
Bhutta, a citizen of Pakistan and a foreign medical school graduate, entered the United States in 2009 to participate in an internal medicine residency training program. During the three-year residency training program, for which he received an annual salary, Bhutta treated patients, with supervision; conducted and presented research; and supervised and trained third- and fourth-year medical students. His supervising and training of medical students consisted of having the medical students observe him during “rounds”, preparing the students for monthly examinations, and evaluating the students monthly.
2016 Affordable Care Act Changes For Individual Taxpayers
The Affordable Care Act (“ACA”) imposes the requirement that all Americans acquire health insurance that qualifies as “minimum essential coverage” under the Act. Otherwise, taxpayers may have to make a shared responsibility payment to the IRS when they file their tax return in April. The ACA also allows for a tax credit known as the premium tax credit for taxpayers that purchase health coverage through the Health Insurance Marketplace.
Known as the individual shared responsibility provision, it requires a taxpayer, his or her spouse, and their dependents to have health insurance minimum essential coverage for the entire reporting year. Most taxpayers already have qualifying health care coverage, and will simply report this fact on their return by checking a box.
FEDERAL TAX IMPLICATIONS FOR SAME-SEX COUPLES MARRIED UNDER STATE LAWS
In June of 2013, the U.S. Supreme Court held in U.S. v. Windsor that provisions of the Defense of Marriage Act (DOMA) were unconstitutional. Prior to this ruling, Section 3 of DOMA required that, for purposes of federal enactments, marriage be defined as the union of one man and one woman and the word spouse be defined as someone of the opposite-sex who is a husband or wife.
When Married, To File Jointly or Separately
IS IT BETTER TO FILE SEPARATELY OR JOINTLY WHEN MARRIED?
Under the tax laws, if you are legally married, when filing your tax returns, you have a choice of filing jointly with your spouse, or filing separately. The tax laws generally expect married couples to file jointly though they may legally elect to file separately.
Most times, it is more to the advantage of the filing couple to file jointly. Where married taxpayers file separately, most deductions and exemptions are generally halved for each tax return. In rare cases, married taxpayers may be able to file separately and claim higher deductions and get bigger refunds on their returns.