International Tax And Estate Planning Discussion Post – Coursework Example
The U. S. Joint Tax Returns The U. S. joint tax returns entails married couples combining respective incomes, deduction and also credit, and then illustrating them on the income tax returns. The filing by the couples assumed that they are one, for income tax calculation purposes. Robert and Andrea should embrace filing of joint returns. They can save substantial amounts of money, by filing one return. Joint filing also provides the married couple with tax benefits, which are not enjoyed during separate tax returns (Mathew, 2012).
Andrea is a non resident alien. Therefore, her tax calculation and filing procedure is similar to the tax filing process of USA citizens. Her husband Robert is U. S .citizens. The couples rely on income related to a U. S. source. This illustrates that the joint tax filing process applicable in the U. S. applies. Robert is subjected to U. S. tax rates due to the worldwide income tax policy, on both resident and non-resident citizens. The married couples, Robert and Andrea, are hence subjected to similar tax filing procedures and benefits. Filing joint tax returns is desirable because it gives the couples several benefits; for instance, retirement advantage, reduced tax expense, and itemized standard deductions.
Married taxpayers whole file joint tax returns benefit from reduced tax expenses. The joint tax returns ensure increased tax rates. This is due to the tax credits and deductions, which are not given to individuals with separate tax returns. Spouses with separate tax returns are generally disqualified from accessing income credit, child care credit, college education credit, disabled credit, or even lifetime learning credits.
There is great retirement advantage for married couples with joint tax returns. Each partner can have separate individual retirement accounts; this is even if income is earned by only one spouse. On the contrary, married individuals with separate tax returns experience stringent income limits that minimize their ability to maintain retirement account (Brownlee, 2013).
Married individuals filing joint tax returns can determine if itemizing standard deductions can adequately safe on taxes. The spouses with separate tax returns do not have the ability to choose or determine the savings on the standard deductions. In filing separate tax deductions, the two spouses must apply the same approach of claiming deductions. If one itemizes, the other is also required to itemize.
Elliot, Brownlee. (2013). Federal Taxation in America: A Short History. Cambridge: Cambridge University Press.
Mathew, Bender. (2012). International Estate Planning. NY: LexisNexis Group.