If you receive U.S. income, you will have to pay taxes. In general, U.S. residents are taxed in the same manner as all U.S. citizens worldwide. For tax purposes, income is defined as money, property, or services you earn through work, investments, and other means.
But taxable income is the amount of income subject to tax, after deductions and exemptions. Taxable U.S. income includes:
- Wages from employment
- Interest earned on bank accounts and stocks
- Taxable scholarships
- Dividends, capital gains, rental income, royalties
- Other forms of compensation
The U.S. tax system operates on a pay-as-you-go basis, meaning your employer withholds estimated taxes from your paycheck throughout the year. When you file your tax return, you’ll reconcile the amount withheld with your actual tax liability. If too much was withheld, you’ll receive a refund; if too little, you’ll owe additional taxes.
Taxpayers are personally responsible for doing the following:
- Filing tax documents correctly
- Keeping and organizing their records
- Accurately reporting income and all other relevant information
The U.S. tax system operates on a principle of voluntary compliance, meaning it’s up to you to accurately report your income, file your tax return, and keep your records organized. Failure to comply can result in penalties, so it’s best to consult a tax accountant.
Our comprehensive services include everything from tax preparation to financial record management. We handle the complexities of federal, state, and local tax laws, ensuring your tax documents are filed correctly and on time.
We also provide representation with the internal revenue service in Connecticut so you can focus on what matters most—your financial well-being.
Need accounting & tax services in New London, Connecticut? Contact us today, and let us help you with your taxes quickly.
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