Taxation History of the United States

The taxation history of the United States begins in 1760, with colonial protest against the taxation policy of the British, which lead to the American Revolution. Taxes were collected on imports, whiskey and on glass windows for a while by the independent nation. States and localities collected property tax on commercial building and land.

State and inheritance taxes began at the starting of 20th century. The sales tax was started by state government during the 1930s. Income taxes were imposed by the United States for a brief period during the 1890s and he Civil war. It was imposed on a permanent basis from 1913.

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Colonial taxation

During the colonial era, taxes were low a colonial, local and imperial level. The issue whether parliament could impose taxes on the Americans led to the revolution.

  • Stamp Act (November 1, 1765): It was the fourth stamp act that was supposed to be passed by British parliament. According to the act, all legal documents, newspapers, wills, commercial contracts, permits and [playing cards in American colonies was required to carry tax stamp.
  • Townshend Revenue Act (1767): Two tax laws were passed by the Parliament which were proposed by Charles Townshend
  • Sugar Act (1764): Taxes were imposed on the non-British exports like sugar, coffee and cloth.
  • Tea Act (1773): It was a drawback of duty and tariff on tea.
  • Boston Tea Party: The American colonists protested against Great Britain for Tea Act by dumping chests of tea into the Boston Harbor.

Tariffs

Tariff played various roles in the economic history of the United States and trade policy. They were the biggest source of federal revenue between 1790 and the eve of World War I. After that, it was surpassed by income taxes. Tariff also played a role in protection of the local industry. It generated some political stress during the 19th century.

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Excise Tax

Federal excise taxes are applied only to certain items like tires, motor fuel, telephone usage, alcoholic beverages and tobacco products. Often, excise taxes are allocated to special funds which are related to the activity or object taxed. To fund his policy of assuming war debt of American Revolution, tax on distilled spirits was proposed by Alexander Hamilton when George Washington was the president. The legislation was approved by the House after a vigorous debate. Seven cent per gallon was imposed on whiskey.

Income Tax

Income taxes began during the 19th century in the United States when income taxes were imposed for funding the war efforts. The constitutionality of the income taxes was in doubt until the Ratification of 16th Amendment in 1913. Article 1, Section 8, Clause 1 of the Constitution allows imposing of tax, duty, impost and excise. Article 1 Section 8 requires duties, excises and imposts to be uniform throughout United States.

In 1916, Congress re-adopted income tax with 1% tax on personal income over $3000 and 6% on net income over $500,000. By 1918, the income tax was increased to as much as 77% for financing World War 1. The top marginal tax rate kept reducing till it reached 24% in 1929. During the Great Depression, the tax rate keeps increasing steadily.

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California State Taxes Are Among The Highest

California State Taxes Are Among The Highest In The United States

California has always had a bit of a reputation for high taxes, but that reputation wasn’t always as well-deserved or as accurate as many people would make it out to be.

Today, however, saying that California has high taxes may be the understatement of the century, including dui lawyers in San Diego CA.

If you’re thinking about moving to California or are looking to conduct business in California, you’ll want to make sure that you understand exactly what you’re getting into. You’re going to pay your fair share of state taxes in California for sure, and then some!

California Sales Tax is the highest in the US

According to information published by the state of California, the Sales Tax of this great state is the highest in the nation (as of 2018) – and that’s after it was actually decreased when Proposition 30 expired.

The “flat tax” for California Sales Tax is 7.25%, down from 7.5% with the expiration of that same Proposition 30 we mentioned above. However, as if that wasn’t high enough already, local sales tax can also kick in – sometimes bringing total sales tax all the way up to 10% in some California cities like San Francisco, as San Francisco DUI Lawyers expect.

On average, consumers should expect spend about 8.54% on sales tax throughout California (as of 2018).

California State Excise Tax

On top of the sales tax then you’ll have to pay when you purchase things in California, a whole host of different excise taxes are also charged on all kinds of products and services you might look to purchase.

For example, if you ever decide to purchase fruit from a vending machine in the state of California you’ll pay an extra 33% of that total purchase price in excise tax. Packs of cigarettes will cost you $2.87 in excise tax after new legislation added an extra two dollars in April 2017. Gasoline gets hit with a tax of $0.5349 per gallon under legislation that went into effect in November 2017, representing the second highest gasoline excise tax in the United States.

As of right now, the average driver in California is going to pay just north of $3.05 per gallon of gas, compared to the national average that sits at just $2.26. There is potential legislation going on throughout the state of California that would repeal the new gasoline tax increases, but residents of California won’t have an opportunity to vote on that until November 2018.

California Property Taxes aren’t all that bad

State property taxes in California aren’t all that bad.

Effectively, property owners will pay just .76% in 2018 compared to the 1.1% that property owners pay on average across the US.

Of course, properties in California are always going to be assessed at 100% of their full cash or market value. A handful of tax breaks are included in the state of California to bring your total property tax costs down a little bit, but former programs that reimbursed taxpayers for a portion of their property taxes have been discontinued as of 2017.

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A look at the Republicans New Tax Plan

A look at the Republicans New Tax Plan

 

The Tax Cuts and Jobs Act signed on the 22nd of December 2017, will usher in changes in 2018 There are some significant changes to existing tax rates, affecting both businesses and individuals. For some it may be good news and for others it may be a mixed bag. There is a reduction in income tax rates and an increase in standard deduction, but personal exemptions have been done away with. Corporate tax rates have been slashed substantially. The Republicans’ tax plan has sanctioned permanent corporate tax cuts and temporary cuts in individual income tax rates.

 

Single individuals will be charged 10%, 12%, 22%, 24%, 32%, 35% and 37% respectively for income groups $0 to $9,525, $9,525 to $38,700, $38,700 to $82,500, $82,500 to $157,500, $157,500 to $200,000, $200,000 to $500,000 and over $500,000+. Married couples or those filing for joint income tax will be charged the same tax rates for income groups $0 to $19,050, $19,050 to $77,400, $77,400 to $165,000, $165,000 to $315,000, $315,000 to $400,000, $400,000 to $600,000 and over $600,000.

 

The first slab remains unchanged. There is a reduction of 3% for second and third slabs, 4% reduction in the fourth slab, 1% reduction in fifth slab, no change in the sixth slab and more than 2% reduction in the seventh slab. All the seven slabs and their corresponding tax rate cuts would continue till 2025. The tax rates would revert to 2017 rates should there be no review. The fact that the slabs remain unchanged is disappointing because they do not account for inflation. The government should have considered reviewing the income range.

 

Single or individual taxpayers can claim double the standard deduction now. Instead of $6,350, you can claim up to $12,000. The same deduction for joint or married filers has been increased from $12,700 up to $24,000. These changes will also revert to the 2017 standard deductions after 2025. This is possibly one of the most noteworthy changes in the new tax plan. Most people would be happy to claim the deduction and almost no one will claim anything short of the maximum.

 

The devil is in the details and that is where the tax plan gets interesting. Families with more than one kid will likely pay more taxes regardless of the increase in standard deduction. This is because personal exemptions have been done away with. Various itemized deductions are no longer valid. Moving expenses and alimony payments cannot be deducted. There is a limit on mortgage interest and there is no deduction on interest paid on any type of lines of credit including home equity. On a positive note, there are more deductions available covering medical expenses.

 

The qualifying criterion to deduct medical expenses has been lowered from 10% to 7.5% of income. This will qualify more people to claim significant deductions. This deduction brings normal taxpayers in the same ambit as the seniors, who were already in that bracket. The new tax plan has also effectively repealed the Obamacare tax on everyone who doesn’t have health insurance.

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Are Lawyer Fees Deductible?

Can you deduct legal fees you have incurred when filing taxes? The answer is complicated, the guidance is provided by the Internal Revenue Service Publication 529. In short, it depends on what the legal fees were in regard to. The general rule, as stated by the IRS, is that: “You can usually deduct legal expenses that you incur in attempting to produce or collect taxable income or that you pay in connection with the determination, collection, or refund of any tax.”

Therefore, if the legal fees related to obtaining a tax refund or filing the taxes in general, they appear to be deductible. If the legal fees are based on the attempt to collect taxable income, those fees would also be covered. Deducting legal expenses is also governed by the 2% rule, as discussed below.

Legal fees

What type of Legal Fees Are Deductible?

As stated above, legal fees incurred due to filing/receiving taxes or obtaining taxable income are deductible. Below are more examples of where legal fees are potentially deductible.
Family Law – you are allowed to deduct attorney fees that relate to collecting taxable income, as discussed above. Therefore, legal bills incurred attempting to obtain alimony (which does constitute taxable income) would also be included.
Criminal Law – legal fees incurred defending yourself in a criminal case that is related to or arising out of your job are deductible. This deduction is probably heavily scrutinized. According to DUI Attorney Michael Rehm, legal fees defending a DUI charge would not be deductible, unless there was some evidence that the arrest arises out of a work related event, and even then it would be stretch. The rule applies more to incidence of white-collar crime such as insider trading where the activity is related to the profession.
Business Attorney– this is obvious considering the role business attorneys play in helping business ensure survival, thus collecting taxable income.

2% Percent Rule

The 2% rule means that you are only allowed to deduct the total of certain expense that exceed 2% of your Adjusted Gross Income. Certain expense are a part of the 2% rule. When deducting your expenses, you add up all of the expenses that fall under the 2% rule category, and if they exceed 2% of your adjusted gross income, then you deduct the amount that is in excess.
Legal fees are fees covered by the 2% rule, so when adding up all of the expenses, legal fees fall under this category.

Tax Deduction -DUI Attorney

Non-deductible legal expenses

Family law legal fees that are spent to collect alimony are deductible, but family law legal fees defending an alimony lawsuit are not. Family law fees spent to collect child support are also not deductible, since child support is not taxable income. When determining whether legal fees are deductible, the best steps to take is to determine whether the fees were incurred in relation to taxes in and of themselves, or your job, or obtaining taxable income. Always consult with a professional, whether it is a tax attorney or CPA to determine which legal fees are deductible. Don’t forget to write down the advice and save the receipt for a future deduction.

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Single Mothers and Government Grants

In the United States the divorce rate is about fifty percent, believes many a San Diego DUI Lawyer. This means there are a lot of single mothers who are struggling to raise their children alone. As a single mother it can be difficult to make up the loss of a second income and often fathers do not meet their financial obligations when it comes to child support. Statistics found that only one in six women will receive some form of spousal support as a result of a court order and of these women only two out of three will actually get the money.

These facts show that once a divorce is finalized a woman’s standard of living can decrease by almost half while on average a man’s standard of living will increase by fifteen percent. However, there is a solution to the poverty of a single mother. The government has established several programs to help single mothers when it comes to setting up an independent household. These programs rely heavily on government grants as their primary source of funds.

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Anytime a government award is used for financial assistance it is considered a grant. Any program started from United States law has the ability to be funded by government grants. Typically grants are set aside for specific individuals or organizations that first need to qualify for the grant under relevant law or program. A grant can be specifically organized by the type of recipient or the type of source receiving the money.

Sources of Grants

Today the United States has twenty-six agencies which offer government grants.These agencies combine together to offer over nine hundred different programs on just the federal level alone. All of the programs fit into twenty-one different categories that include agriculture, art, community development, employment, labor, training and legal assistance.

One popular area that has many grants available is the higher education grant for single mothers. You can go to the financial aid office at your local college to get the paperwork for these government grants so that college can become a possibility for a single mother. College education assistance can come in several forms through the government. The first is direct assistance or a loan from the college itself, grants that don’t have to be repaid from the federal or state government; scholarships sponsored by private organizations, alumni gifts, religious organizations or even the possibility of a work study program.

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Applying for a Grant

Any single mother can apply for a grant through they are a U.S. citizen or resident of a U.S. Territory. A foreign citizen who has lived on U.S. soil for at least three years is also eligible to apply for government grants. When applying for a government grant make sure you carefully read over the paperwork. Many government grant applications can be confusing and a grant application will often be discarded if it isn’t filled out properly. You also want to make sure you understand the qualifications and only apply for a grant that you can qualify for. This will save you time filing out different applications. Getting a government grant as a single mother can be a good way to get out of debt and start a successfully independent life.

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Tips to Applying For Government Grants

Grants are designed to help individuals get the money and finance they need for a project, educational goal or business endeavor. There is a lot of work that goes into getting a grant, but with the right help, tips and methods you can successfully get a government grant for all your needs.

Where to Look

If you want to start a business and need money, there is a chance you can get one through a state run development agency. Many of these agencies provide free government grants for business use. Since there are many small businesses the government is more interested in providing grants to those who need them to operate a small business.

In order to find the agencies that offer everything you need it is best to look through a directory or use the internet. You can look through the CFDA to find fundings for your small business at no charge. After finding several agencies you need then you need to contact them to find out the requirements or documentation that you need in order to apply.

When you ask about a grant you will often get free counseling, training and technical assistance for the business or educational goal you plan to use money for. Remember that when you apply for a grant you are essentially getting a contract with no strings attached. Once you get a government grant you are being contracted by the agency to give them a product or service in exchange for the program budget.

The Benefits

Getting a grant is a better option than a loan since you don’t have to pay back any of the money you get. On the other hand, if you get a loan you will have to start worrying about repayments just a few years after borrowing the money you need.

A Few Helpful Tips

In order to get approved for a government grant you need to have a product, service or education course that fits the objectives of the grantor. This is why getting money for a course; product or service that has a community related goal is easier. You often won’t be able to get a government grant for a program that isn’t listed within the weekly publication: Catalog of Federal Domestic Assistance.

When it comes to getting funds you need to submit a formal application along with all the proper documentation. Making a project proposal is often the most difficult part. This is why grant writing is important and is often the deciding factor in getting approved. Make sure the proposal you submit in order to get a government grant contains all the necessary information about the product or service you are proposing. Make sure your business plan describes exactly how it fits with the objectives in order to increase your chances for getting a government grant.

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What Can I Expense on My Taxes as a Fitness Instructor in USA?

There is a famous saying “health is wealth”, which has a great meaning in one’s life. The most valuable and treasured possession is Health for every individual. Most people fail to appreciate the importance of health. Whatever you do, you need to maintain health that is good as because if your health deteriorates you will not be able to deliver satisfactory results.

Whenever you hear the word health, consideration comes only for your body but because proper mental fitness is also needed to maintain a decent health. If your mind is not healthy, then your body will not be healthy too.

Since you are a self-employed, and your job as a fitness instructor, you are yourself a business. It is so because you need to think like a business person himself. That means you needs to maximize your business expenses to lower your taxes. There are certain categories where you can spend as an instructor to claim certain tax deduction on returns of your personal tax:

Equipments and working tools

The equipments that you purchase exclusively for customer use that qualifies justifiable expenses, as well as the repair. Namely treadmills, weights, music system, electronic organiser’s, etc. first aid kit, backpack, a belt bag, diary, stationery, briefcase or a working bag.

Work Uniform

The expense of buying specific working uniform that your employees should have a proper logo on it. The laundry or dry cleaning cost of uniforms. The cost of buying sunscreen for training outside the training centre.

Videos on exercise and audio music

You can also claim for investments that you make on music or videos or the projectors you spent for group sessions. But here it is important to mention that you need to keep all the receipts.

Travels and meals

Food cost while working overtime. The cost of travel by taxis or public transport or even parking. You can also claim for the expense of your car.

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Insurance

As a fitness instructor, you can always insure the cost of your work equipment as the safety of your customer is important and for so won’t be neglected.

Training

Short training courses and education expenses can be claimed along with the educational books expense if you are a university student.

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Other Expenses

  • Annual fees for the membership to the association you are a member.
  • Cost of attending any competition as a coach, work- related magazines and journals.
  • Buying DVD’s & CD’s, fitness books, nutrition books, internet connections, phone bills, and the cost of maintaining a home office or the training centre.

You can also make claims, for your donations to charities, the fee of the bank for account investments. Fee of the agent who manages your tax returns and even the cost of travelling you make to meet that agent.

Wherever you spend, keep the receipt safely because you will need it as proofs for claims that you are going to make. The better proofs you have, better the chances are to get deductions.

Resources and more information:

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