Features Of Federal Tax Law

As we all have heard a word which is commonly used by the tax attorneys that is "Federal Tax Law" but only few people are aware about its features which are mentioned below:

1. According to it, the application of the Internal Revenue laws is done in a very limited manner.
2. The Internal Revenue Code is subdivided into 11 categories. Out of which the first five
3. categories are linked with the various sections of taxation, whereas the other six categories are subjected to "Procedure and Administration" which is Subtitled as "F", Joint Committee On Taxation is Subtitled as "G", Financing The Presidential Election Campaign is Subtitled as "H", Trust Fund Code is Subtitled as "I", Coal Industry Health Benefits is Subtitled as "J", and Group Health Plan Portability is Subtitled as "K".
4. "Subtitle A" refers to Income Tax.
5. Employment tax or social security tax is covered under "Subtitle C".
6. The two "Subtitles A & C" are not related to each other in anyway.
7. The "Subtitle A" covering income tax is a form of an "excise" which is, generally, charged on specific occupations or professions which has to be paid by a liability.
8. The return filed under "Subtitle A" comes under section 6012(a). The taxable income of a liability is identified by the Internal Revenue Service in order to get it filed to OMB which is the U.S. Government's Office of Management and Budget. The Form 2555 is required instead of 1040 in order to return the file of Foreign Earned Income.
9. The tax on wages of the employees reported by the employers is imposed under "Subtitle C" in order to build credits towards social security. On contrary, the tax on wages is not imposed on the employees under "Subtitle A".
10. There are few legal requirements in case of wage tax imposed under "Subtitle C" which are compulsory for the employers. Also, the employer and the employee can decide voluntarily to participate in the entitlement program.
11. For a person behaving as a fiduciary for any nonresident alien and is receiving benefits on the behalf of nonresident alien from the stock of US corporations, the Treasury Decision 2313 clarifying the Form 1040 is apt and appropriate.
12. Section 1461 can make anyone liable under "Subtitle A", which is applied to the withholding agents like nonresident aliens and foreign corporations.

Amendments In Federal Tax Law

There are few changes which have been brought up by the American Job Creation Act which was signed into law. These changes will definitely show their impact on everyone's business in the upcoming years.

• According to the new rule, there will be 3-9% of deduction on "Qualified Production Activities Income".
• According to a new section under 181, the deduction will be made as an expense on the cost of making qualified films or television productions instead of making deductions over a period of ten years according to income forecast method. The change in this rule will really have an intensive impact over the producers of the motion pictures and television series.

You should clear every point of federal tax law, as well as the amendments made in it with your tax professional on time.