After understanding the basics of C Corporations and S Corporations and then exploring Schedule K-1, it is time to look at how a C Corporation reports and pays federal income tax. Unlike a partnership or S Corporation, a C Corporation is generally treated as a separate taxpayer for U.S. federal income-tax purposes. Andrew: Professor, does
C Corporation Taxation: Form 1120 Read More »
After understanding the basic differences between a C Corporation and an S Corporation, the next important concept in U.S. business taxation is Schedule K-1. For students, accountants, and professionals preparing for careers in U.S. tax, accounting, audit, or consulting, K-1 is an essential concept because it connects a pass-through entity with its owner’s tax reporting.
Schedule K-1: Partnership & S Corporation Read More »
Fundamentals, Tax Impact and the Role of M-1 and M-3 Adjustments Student: Professor, I understand that corporations are separate legal entities, but I still get confused when interviewers ask me to distinguish between a C corporation and an S corporation. Where should I begin? Professor: Begin with one fundamental idea: both are incorporated business entities,
C Corporation vs S Corporation Read More »
Understanding the Basics Andrew had just started working on a project involving US partnership taxation. He opened his notebook, looked at a list of forms, and frowned. Andrew: Professor, I have a question. Professor: Of course, Andrew. What is confusing you? Andrew: I keep seeing terms like partnership, flow-through entity, TIN, EIN, Form 8832, Form
US TAX PARTNERSHIPS Read More »
India to USA: A Practical Dual-Status Tax Case Study PART 3 OF 3 — PRACTICAL CASE STUDY In Part 1, we understood the difference between a dual-status taxpayer and a dual-resident taxpayer. In Part 2, we examined the important elections, IRS forms and filing formalities. Now let’s put those rules into practice. The following case
U.S. INDIVIDUAL FEDERAL TAX: Dual Residency in U.S. Tax Read More »
From determining residency to preparing the correct U.S. tax return PART 2 OF 3 In Part 1, we learned that a taxpayer may become a dual-status taxpayer when U.S. tax residency changes during the year. We also distinguished a dual-status taxpayer from a dual-resident taxpayer, and examined the Green Card Test, Substantial Presence Test (SPT),
Dual-Status Taxpayers:Elections, Forms & Filing Formalities Read More »
The Rules Every Taxpayer Should Know PART 1 · U.S. INTERNATIONAL TAXATION SERIES Moving to or from the United States can change the tax treatment of an entire year. A person who moves between India and the United States during a tax year may face a unique U.S. tax situation. For part of the year,
DUAL-STATUS vs. DUAL-RESIDENT Read More »
Single Filer vs. Married Filing Jointly — A Case Study 2025 Alternative Minimum Tax (AMT) Rules Illustrated The following two case studies illustrate how the 2025 AMT rules work in practice. By comparing a Single Filer with a Married Filing Jointly (MFJ) couple, we can see how the AMT exemption and 26%/28% rates affect the
Imagine a taxpayer who earns a substantial income and claims several deductions and tax preferences. Under the regular federal income tax system, these deductions may significantly reduce taxable income. But the U.S. tax system asks another question: after applying a separate set of rules, should this taxpayer still pay at least a minimum level of
Alternative Minimum Tax Read More »
A student-friendly guide to U.S. federal tax credits, Tax Year 2025 After calculating taxable income and claiming all eligible deductions, the next important step in preparing a U.S. federal tax return is identifying tax credits. Unlike deductions, which only reduce taxable income, tax credits reduce actual tax liability dollar-for-dollar — and some credits can even
How Tax Credits Can Reduce Your Tax Bill — and Sometimes Increase Your Refund Read More »
