Guide to Tax Planning

Income tax means a tax imposed on or measured by net income including any tax imposed on or measured by an amount arrived at by deducting expenses from gross income, one or more forms of which expenses are not specifically and directly related to particular transactions.

Internal Revenue service (IRS) is an agency of the Treasury Department, headed by the Commissioner of Internal Revenue, charged with enforcing the tax laws. Included in IRS functions are issuances of interpretations of the tax law, auditing of tax returns and making criminal investigations.
 

For tax preparation , it is necessary to know all possible tax deduction. Click here to read more
 

What is double taxation :
Taxation of the same earnings at two levels. One common example is taxation of earnings at the corporate level and then again at the shareholder dividend level. Another example is taxation of foreign investments in the country of origin and then again upon repatriation, although many countries have signed agreements to prevent this latter type of double taxation.
 

What is capital gain: The amount by which an asset's selling price exceeds its buying  price. A realized capital gain is an investment that has been sold at a profit. An unrealized capital gain is an investment that hasn't been sold yet but would result in a profit if sold. Capital gain is often used to mean realized capital gain. Capital gain may occur for selling stocks, mutual fund, options etc. You need to pay capital gain tax to IRS.
 

Many people invest in stocks, bonds, and mutual funds through a tax-deferred retirement account. Individual Retirement Accounts (IRA), Roth IRA, and 401(k) plans are examples of tax-deferred accounts. Your investment profits in tax-deferred accounts are not reported as capital gains. Instead, income from these accounts is tax-deferred until the money is withdrawn, and then the income is taxed as ordinary income.

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