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Thomas Tax Seminars has been setting the standard for tax professional education since 1976. We specialize in preparing tax professionals for the Special Enrollment Examination (SEE) that the IRS offers at the end of September each year. Our IRS Special Enrollment Examination Home Study Course and EA Exam Review Course thoroughly prepare the student for the SEE examination process. The California Society of Enrolled Agents and the National Association of Enrolled Agents as well as many Societies and Groups nationwide and in Japan use our EA Exam Prep Courses to present live, interactive seminars. We also provide continuing education for Enrolled Agents, and tax professionals in Oregon. For over 30 years it has been our mission to provide the most comprehensive courses to enhance the tax professional’s career.

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US tax system

The US tax system is the principle of taxing one of the undisputed leaders on the world stage. In this blog we will consider not only the US tax system, but also the features of the tax systems of other countries.The US tax system has 3 levels: federal, state and municipal level.Of the characteristic features are the following:Federal taxes are progressive in nature, that is, with an increase in the object of taxation, the tax rate grows, “regular” and local taxes can be calculated at a regression rate.Although the US tax system consists of 3 levels, the law does not clearly divide applicable federal, state, and local taxes. Each state has the right to approve its own taxes, it is enough only to comply with legal requirements.Simultaneous taxation of the same taxes by the federal, state, and local governments. For example, the state population can pay 2 types of income and property tax, 3 types of excise tax at different levels of the budget. Companies pay corporation tax at the federal level. In most states, they still have to pay the same tax, but in the state budget.The US tax system is mainly focused on direct taxes. For example, there is no such tax as VAT in the United States, but in almost every state sales tax is obligatory.Not only companies can make payments for social security of employees, but also employees themselves. Most taxes (about 70%) go to the federal budget.So, as the main taxes adopted in the United States, can be called: Personal income tax, which serves as the main tax revenue of the federal budget. It is also paid by physical persons who run an individual business. Property tax for individuals and companies. Corporate tax for companies (Russian equivalent of income tax). Excise (indirect tax). Sales tax (indirect tax). Taxes calculated on labor remuneration (social security contributions). The tax on the elimination of unemployment.In general, the US tax system provides 30% of the country’s GDP. The US tax burden is recognized as one of the lowest among industrialized countries.

Canadian Tax System

Canadian Tax System The tax system of Canada, like the systems of Russia and the United States, has a three-level structure: federal, provincial (territorial entities) and the level of municipalities. As in the United States, most tax revenues are credited to the federal budget of the country — about 60–65%. Direct taxes predominate to a large extent. But with indirect taxes in Canada has developed a very interesting situation.In addition to the federal-level VAT, many provinces charge additional sales tax. In addition, among developed countries, Canada is a leader in high excise rates. Such a situation with excisable goods is not accidental. Canada’s territory is literally flooded with tobacco products that are smuggled.We list several major taxes adopted in Canada: personal income tax;excise taxes; VAT; sales tax; corporate profit tax; real property tax of legal entities and individuals.The income tax has a progressive tax rate and is paid once per whole calendar year. It is charged twice – at the federal and provincial level. The situation is the same with the income tax of commercial structures. Filing a tax return is always a whole story for an individual. It is attended by all organizations and institutions that are even the slightest relation to the income of the taxpayer. Companies annually prepare for their employees documents on their income in the prescribed form. Banking and other financial institutions send customers information about the interest earned by them.The most difficult thing for a taxpayer is to put together a lot of these certificates. In Canada, a large number of tax consultants work, who mostly have an economic education. For a fee, they will help the client to legally optimize (that is, reduce) the tax burden.The trading system of Canada has one feature that usually becomes not a very pleasant surprise for tourists and guests of the country. The fact is that the prices of goods in stores, dishes in the menu of restaurants and cafes are always listed without sales tax. Therefore, tourists are unpleasantly surprised to see a sum of 11–13% more in the bill of a catering establishment than they expected. Locals take it very calmly and can calculate the final amount to pay on their own. 

Australian Tax System

The Australian tax system is represented by 2 levels:

  • level of state (central) government;
  • level of local governments.

The central government levies the following taxes: income, GST, excise taxes on tobacco, alcohol and gasoline, corporate tax, stamp duty, social security contributions, including compulsory health insurance. Local taxation includes commercial property tax, street parking fees, government grants, and others. 

Annual tax declarations can be lodged online through online tax return system, but more often tax payers lodge their taxes through the registered tax agents who lodge tax returns online.

The main tax in the Australia is income tax. The rates on it are progressive and depend on the type of income (bank deposit, dividends, wages and other income). In general, they can reach a level of 40%. And here the Australians have one small feature. The entire population of the country is divided into residents and non-residents. Residents pay tax on all their income received in the UK and abroad. Non-residents are obliged to pay income tax on income received by them within the country.

The Australian tax system has one very interesting feature, which may seem somewhat strange to us. The tax year in the Australia does not begin on January 1, but on 1 July and ends on 30 June of the following year. Therefore, the Australian authorities, having decided that they did not want to lose part of the taxes, postponed the beginning of the tax period to 01 July. Since 1800, the first day of the tax period was approved on 1 July. This date is still valid.

Corporate tax involves the taxation of corporate profits. The country has adopted a taxation system for 2 levels. It has been operating since 2006. If the company received a profit of 10 million dollars or more, then in this case the tax rate of 30% is applied. If the income was less than 10 million dollars, then it is taxed at a rate of 27.5% for 2019 tax return online.