Form W-2G Basics
Form W-2G Basics Form W-2G, is the form gambling establishments use to report your winnings as income to the IRS. In this article, we will go over the basics of what is involved if you receive Form W-2G. Form Contents First, you must get familiar with what is on Form W-2G. In boxes 1 and 2 you will find your total winnings and the date(s) of those winnings. Box 3 specifies the type of wager [...]
International Tax Treaties
International Tax Treaties International tax treaties are agreements between two countries. The purpose of these treaties is to prevent issues such as double taxation and tax evasion. These treaties can also be known as Double Tax Agreements or DTAs. In this article, we will go over the basics of how international tax treaties work. Eligibility International tax treaties apply to residents of foreign countries. The treaty will reduce the U.S. tax burden for residents [...]
Foreign Tax Credit
Foreign Tax Credit The foreign tax credit is a type of tax credit the IRS provides to some taxpayers. It helps to prevent double taxation. In this article, we will explain how the foreign tax credit works and how to properly claim it. Tax Credit vs. Tax Deduction First, it is important to understand the difference between tax credits and tax deductions. A tax deduction only lowers your taxable income. This means you are [...]
Payroll for the Self-Employed
Payroll for the Self-Employed Payroll for the self-employed can be complex. It is important to understand how it works. It can greatly reduce your tax burden. In this article, you will learn how payroll for the self-employed works and how you can implement it. Self-Employment Tax If you make more than $400 through your business, you will be subject to self-employment tax. This tax is 15.3% of your income. It includes both the employer [...]
Foreign Earned Income Exclusion
Foreign Earned Income Exclusion The foreign earned income exclusion is a tax exclusion to help prevent US citizens and resident aliens from being subject to double taxation. In this article, we will go over the basics of what the foreign earned income exclusion covers. Foreign Earned Income First, it is important to understand what foreign income includes and what it does not include. The IRS defines foreign income as “wages, salaries, professional fees, or other [...]
Taxation for Resident and Nonresident Aliens
Taxation for Resident and Nonresident Aliens Taxation for resident and nonresident aliens differs from that of U.S. citizens. In this article, we will go over the basics of taxation for resident and nonresident aliens. Resident vs. Nonresident A resident alien is someone who is not a U.S. citizen but has a green card that allows them to work in the country. Or they have lived in the U.S. for at least 183 days over [...]