Articles tagged with: tax

Possible Income Tax Benefits for Parents of Dyslexic and ADHD Children

Written by Gregory Fallon, EA, MST on Wednesday, 11 September 2013.

Possible Income Tax Benefits for Parents of Dyslexic and ADHD Children

Many parents with children who are learning disabled fail to take advantage of numerous tax deductions.  The cost of providing learning disabled children with the tools and support they need can be expensive, even with disabilities as common as dyslexia and attention deficit hyperactivity disorder.  Many of these costs, including less obvious expenses such as tuition, tutoring, and special schools, can be deducted as medical expenses, but most taxpayers neglect to do so.  Additionally, starting in 2013, the amount of these expenses combined with other medical expenses must exceed 10% of the taxpayer’s adjusted gross income (1040 line 38) before they can be deducted. Therefore, taxpayers with high incomes may receive no benefit from these medical deductions.

VAT is that?

Written by Gregory Fallon, EA, MST on Wednesday, 06 November 2013. Posted in International Tax

General explanation of how VAT works in the EU.

VAT is that?

Most people who are unfamiliar with Value Added Tax (“VAT”) assume it is similar to the U.S.’s sales tax but it is very different.  Unlike other developed countries of the world the U.S. does not impose VAT so many U.S. businesses are unfamiliar with how VAT works.  This article is meant to educate U.S. entrepreneurs on the general workings of VAT in the European Union (“EU”) and strategies to minimize exposure.  All 27 countries in the EU adhere to similar VAT rules base on The Recast Sixth Directive. Each member is allowed some room to customize their VAT laws but these differences for the most part are immaterial differences. The main feature of VAT that distinguishes it from U.S. sales tax is how the sourcing of sales and who is responsible for collecting it can change based on the status of the buyer and seller.  Unlike the U.S. system where the seller always collects and remits the sales tax the VAT system can force either buyers or sellers to collect VAT depending on what is sold and if they are register for VAT.


US Character and Sourcing of Software Sales

Written by Gregory Fallon, EA, MST on Thursday, 15 August 2013.

US Character and Sourcing of Software Sales

When U.S. companies are involved in international transactions they need to understand where their income will be sourced and how it will be characterized before they can develop effective tax strategies. These two factors will also be important when taxpayers take advantage of the Foreign Tax Credit. This article will be focusing on sourcing and character of international and US software sales for “shrink wrap” software. When classifying software transactions it is important to first determine what rights have been transferred. The character of software sales is not based on the form adopted by the sellers and buyers or controlled by copyright law it is determined by IRS regulations. Treas. Reg. 1.861-18(g) focuses on the rights that are acquired by the buyer in determining the type of income.