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What Remote Sellers Need to Know About U.S. Sales Tax
Before Sales Tax Reform, a seller must have a “taxable nexus” in a state before the state can require the seller to collect and remit sales and use tax. Therefore, remote sellers should also be considered physically present to be subject to sales tax. For example, having an office or other place of business in the state, hiring employees in the state, or holding a property in the state.
The difference between employment and contract service in U.S.
Forms W-2 and 1099 are both common payroll income tax forms that apply to two different types of workers in the business, respectively. Form W-2 generally applies to employees who receive a regular wage salary and employee benefits, while Form 1099 is for contractors, self-employed, independent contractors, freelancers, or gig workers
U.S. Foreign Account Tax Compliance Act Introduction
The Foreign Account Tax Compliance Act (FATCA) was passed in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act. FATCA requires that Foreign Financial Institutions (FFI) and certain other non-financial foreign entities (NFFE) report on the foreign assets held by their U.S.
U.S. Excess Business Loss Limitation Introduction -- Based on TCJA and CARES
TCJA was limits excess business losses for noncorporate taxpayers. Excess business loss is disallowed as a deduction. The loss amount that is disallowed is the aggregate of all trade or business deductions/losses over gross income/gains from such trades or businesses, less a threshold of $250,000 (or $500,000 if married filing jointly; it will be annually adjusted for inflation).
The Composition of US Payroll Introduction
The payroll of employees of U.S. companies is governed by federal, state, and local regulations. It is generally comprised of gross income before taxes, federal and state personal income taxes, social security taxes and Medicare taxes, disability insurance, net income, etc. The following is a detailed description of each component, frequency of payroll, payroll taxes, and Form W-2.
Remote Seller in U.S.: Income Tax Nexus
Physical presence was previously the only consideration where income tax nexus is concerned. But this standard was largely replaced by an economic presence/factor presence nexus concept by many states. Just like the sales tax nexus, the income tax nexus better fits the expanding use of e-commerce. States using the economic presence/factor presence nexus standard can impose tax on qualified out-of-state companies, even if they do not have a physical presence in the state.
U.S. Tax Form 5472 Introduction
Form 5472, the full name is the Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade and Business, is an information return (as opposed to a tax return). This article will briefly describe the types of reporting corporations, what the purpose of filing Form 5472 is;
U.S. Tax Form 1120-F Introduction
The 1120-F tax return, the full name is the U.S. Income Tax Return of a Foreign Corporation, is a U.S. income tax return. This article will briefly describe what the purpose of filing Form 1120-F is, who needs to file Form 1120-F; what information needs to be disclosed on Form 1120-F, Form 1120-F’s deadlines, and penalties situations.
U.S. Dividends Tax Issues of Foreign Shareholders
When a U.S. subsidiary pays dividends to its foreign company shareholders, it generally withholds 30% of the dividend income tax for the foreign company shareholders. The 30% tax on dividend income may be significantly lower when the foreign company 's shareholders’ country has a tax treaty provision with the U.S. In addition, foreign company shareholders are also required to report this dividend income to the IRS.
U.S. Corporations and Individuals Amended Tax Return Introduction
The IRS requires corporations and individuals to file annual tax returns with the correct information. When a corporation or individual discovers an error in a tax return filed, an amended tax return could be filed to correct the previous error information. This article will briefly describe under what circumstances corporations and individuals should consider amending their tax returns;