Is it mandatory to file Income Tax Return if I have a PAN but no income?
If you were to consult an auditor he might say NO to filing taxes since you don't have income at present, but he doesn't know your future plans, which might include the plan to go abroad for higher studies or that once you start investing you might make losses and you need to offset them. Due to these circumstances, there are benefits of filing tax returns and you should do so.The biggest benefit is that it helps when you apply for a loan in future or when you apply for a visa. For any home loan, vehicle loan, car loan, etc, most lenders ask for proof of tax returns of the previous three years. So, if you have just entered the work force and at Rs 20,000 a month, your annual salary is below the taxable limit of Rs 5.0 lakhs, you are not required to file returns. But, it is useful to do so because you can build proof of your finances. Even if you are applying for a loan as a co-borrower, the return will serve as proof of your income.Similarly, if you are planning to travel abroad, tax returns are required while applying for a Visa. For Schengen Visa, it is mandatory to support visa documents with the last 3 years of tax filing, even if it is zero income.Another reason why it is mandatory to file returns is to claim tax refund or set off losses. For instance, if you have suffered losses from stock market transactions and you want to carry it forward to the next year, you must file for a refund, even if your annual income is below the taxable limit.In another instance, despite your income being below the taxable limit, your employer has cut TDS (tax deducted at source), 0r you earned some money through freelance work and the company deducted TDS at 10 per cent. But since your income is lower than the taxable limit, you are entitled for a refund. For claiming this refund, you have to file a return.Considering all these future benefits, it is better to file your tax returns from this year.
If a single-owner LLC hires employees, is it still taxed as a pass through entity, or will it be taxed as a corporation/get double taxed?
A single member LLC (single-owner LLC) defaults to being taxed as a DRE (disregarded entity a.k.a. pass through entity with one owner). The taxes for a single member LLC get reported on Schedule C of the single member’s 1040 personal tax return. Hiring employees will not change this.What will change the tax status if if you elect S-Corporation status under the “check the box” rules by filing form 2553 (another method of pass through taxation) or elect C-Corporation status by filing form 8832. The S-election has some limitation in terms of who can make it. One limitation is that the entity must be owned by a US Citizen or Green Card Holder. The C-Corporation election (double taxation) can be made by an entity or non-resident alien. Also both elections, if made, would need to be made within 75 days of forming the LLC or within 75 days of the beginning of any subsequent tax year.FAQ - What entity should I form for my company? | IncNow
The owner of a small firm has just purchased a personal computer?
The owner of a small firm has just purchased a personal computer, which she expects will serve her for the next two years. The owner has been told that she "must" buy a surge suppressor to provide protection for her new hardware against possible surges or variations in the electrical current, which have the capacity to damage the computer. The amount of damage to the computer depends on the strength of the surge. It has been estimated that there is a 2% chance of incurring 550 dollar damage, 5% chance of incurring 100 dollar damage, and 11% chance of 75 dollar damage. An inexpensive suppressor, which would provide protection for only one surge, can be purchased. How much should the owner be willing to pay if she makes decisions on the basis of expected value? Expected value =
How do business owners pay themselves?
After the owner pays all his bills and yes his/her employees are considered bills. What ever is left over is pure profit for him. If he/she has a restaurant and brings in 30,000 dollars that month. After he/she pays the electric, gas, suppliers and every thing else including his/her employees and that comes to say 15,000 dollars then what he/she has left over is 15,000 dollars and that goes in his pocket. Now he/she can't just blow that money cause if something breaks down then that will cut into his/her profits.
How do I pay less taxes?
According to the Income Tax Act, 1961, there are two ways to reduce the tax liability:Income does not exceed maximum exemption limit - no tax: Person whose income doesn't exceed the maximum taxable income, then the person was not liable to pay tax on his income. If he wrongly or mistakenly paid tax or tax was wrongly deducted by some other person on his income according to the provisions of Tax Deduction at Source. Then such person can claim refund of such excess paid tax amount at the time of Filing Income tax Return u/s 139(1).Income exceed's maximum exemption limit: If the person's Income exceed the maximum exemption limit, then the assesse will be liable to make payment of income tax according to the provisions of the Income Tax Act. Now the question arises how can one reduce his income tax liability- legally???The answer lies in the income tax act, provisions and rules itself.One can reduce his tax liability by claiming deductions under Section 80C to 80U.(the deductions are : amonut contributed towards life insurance premium, pension scheme of Central Government, Health insurance premium, donations to certain funds etc., deductions in respect of incomes specified under section 80-IA to 80TTA).There are various income specified in the different clauses of Section 10, are excluded from the total income of an assesse.( these income are: agriculture income- section 10(1), partner's share in the income of firm-section10(2A), income of mutual fund-section 10(23D), clubbed income of minor- section 10(32), income from dividend- section 10(34) and many more) .To claim these deductions and exemptions, the person is required to possess the sufficient knowledge of Income tax act provisions, rules, notifications and amendments.Payment of Income tax is a responsibility not a burden....So everyone enjoy this responsibility by contributing towards the Nation's Development!!!
Does a US Citizen owe taxes to the IRS on a business he owns in a foreign country?
The answer depends on the form of the foreign business. If the business is a limited entity comparable to a corporation, then the owner only pays US tax on compensation or dividends he received. That does not mean that the business itself would not have US tax obligations given that it is selling tangible goods in the US. There is a tax treaty between the US and Estonia, so the company is probably covered, but I don't have enough facts to determine here.If the business was a flow through tax entity, such as a sole proprietorship, then the earnings are reported to the IRS as part of the individual's income.