Federal Income Tax

Federal Income Tax

Federal Income Tax

The federal income tax statutes echos the language of the 16th amendment in stating that it reaches "all income from whatever source derived," (26 USC s. 61) including criminal enterprises; criminals who fail to report their income accurately have been successfully prosecuted for tax evasion. Since the language of the amendment is clearly meant to restrict the jurisdiction of the courts, it is not immediately clear why the courts emphasize the words "all income" and ignore the derivation of the entire phrase to interpret this section - except to reach a desired political result.

If we can establish that the federal government has economic and social responsibilities to the citizens, we can agree we need some method of financing the required government services and programs. Most of us agree that we do need an income tax, but disagree on how the tax should be structured.

Not everyone thinks the tax code should be used to achieve desired social aims through tax preferences. Stanley Surrey was a Harvard Law School professor who believed "... our income tax system should be used only to raise revenues and that the rate of taxation should be highly progressive." Surrey felt that tax preferences "...eroded revenues otherwise available to the government." He wanted to simplify the tax system and he thought the wealthier taxpayers should shoulder a proportionally higher cost of government operations. (Witte 8)

Someone making $80,000 per year is really not making a lot of money. The fed's 'take' is too much now. Income taxes originally started at 1% for the very rich. And now the government is planning to tax you more.

Year-End Income Tax Relief Tip #8: Give your personal gifts before Rudolph goes flying. As a self-employed independent contractor, you can give a friend or family member up to $13K annually before the year end without having to pay gift taxes. (Your spouse can give that same amount to the same individual.) You can also give that same amount to your child's or grandchild's tax-free 529 education plan. If you haven't funded such a plan yet, you can make a single contribution covering five years of gifting. That's $65,000 you can give per donor per recipient tax-free. (Your spouse can match that contribution as well.)

Computers, DVD players, cameras, camcorders, cell phones are all essential tools of my trade and are therefore tax deductible.

The question of income tax is a thorny one. On one hand everybody hates it, but on the other, no one seriously considers challenging it. It's like gravity. We simply accept it as if it were a law of nature.

In other words, the original income taxes were meant mostly for the well-off or the super-rich, and had a minimal effect on their lifestyles. With such a high minimum income to pay tax on income, the issue of income taxes was a minor political issue. Few people paid it, and those who paid it paid very little. Instead, most money was raised through tariffs and excise - people paid for the govenrment by paying extra for the goods they consumed, while rich people (the ones who paid taxes) earned extra money from these protective rules.

Tax preparation help can be found on numerous websites and at the Internal Revenue Service website. If you have a question about the proper way to complete your tax preparation or what forms to file, the Internal Revenue Service website is a great place to look for tax preparation help. Income tax preparation software also often has available tax help files and links for resources.

The contribution of each individual or company via taxes supports many state and federal programs and services that many citizens depend on for daily necessities. Many times individuals and entities file both their state tax returns and federal income taxes at the same time.

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