Tax Regulations and Premium Tax Credits 2023

The FinCEN Form 114a is a document that must be kept by the filer and account owner. It must be made available to FinCEN or the IRS upon request.

A tax imposed on unearned income of minor children. This income is taxed at the parents' marginal tax rate.

The Kiddie Tax exempts the first $2,500 of the child's unearned income from taxation.

A program designed to help eligible taxpayers afford health insurance purchased through the federal or state marketplace.

Taxpayers who are not eligible for health insurance through their employer can purchase health insurance through a federal or state marketplace and may receive a premium tax credit.

Taxpayers may qualify for the premium tax credit if their gross income is between 100% and 400% of the current poverty level.

The American Rescue Plan Act of 2021 (ARPA) expanded ACA Net Premium Tax Credit availability, increasing the credit for eligible individuals and extending it to those with income over 400% of the Federal Poverty Level (FPL).

Individuals can receive a premium tax credit based on their projected income when enrolling in a health insurance plan through the marketplace.

Taxes paid by employees in the US that contribute to Social Security and Medicare benefits.

A system of agreements between the US and other countries that coordinate social security taxation for people who work in both countries.

The principle that US citizens or residents must report all income earned, regardless of where it is earned.

A type of payment made to a former spouse after a divorce, usually on a regular basis.

A type of regular payment made by a parent for the financial support of their child.

The U.S. Social Security system provides various benefits, including retirement income, disability benefits, and survivor benefits.

Medicare is a government-funded health insurance program available to individuals aged 65 and older, as well as younger people with certain disabilities.

Social Security taxes are collected from employees and employers to fund the U.S. Social Security system.

Dividends that are taxed at your ordinary income tax rate.

Dividends that are taxed at a lower rate than ordinary dividends. These rates depend on your income.

The period a shareholder must hold a stock to qualify for the lower tax rate on dividends.

The day after the ex-dividend date. This is the day you must buy the stock to be eligible for the dividend.

Distributions of capital gains. They are not eligible for the lower qualified dividend tax rate.

Payments that look like dividends but are actually interest income. They are not eligible for the lower qualified dividend tax rate.

Payments made by a company to its employees who hold company stock through an Employee Stock Ownership Plan.

Dividends on stock where the shareholder is obligated to buy similar property. These are not eligible for the lower qualified dividend tax rate.

Payments received by a shareholder that are intended to resemble dividends but are not qualified for the lower tax rate.

Dividends received from a foreign corporation that are reported as qualified dividends, but the taxpayer knows or has reason to know that they do not meet the qualifications for a lower tax rate.

A tax levied on investment income like interest and dividends exceeding a certain threshold. This applies to individuals with higher incomes.

The income levels that trigger the Net Investment Income Tax (NIIT).

A form used to report the Net Investment Income Tax (NIIT) by individuals, estates, and trusts.

Cash you receive as a dividend is always considered income.

Stock you receive as a dividend is considered income equal to the fair market value of the stock on the date you receive it.

A U.S. citizen or resident alien living abroad who is taxed on their worldwide income.

The amount of income that may be excluded from taxation for U.S. citizens or resident aliens living abroad.

The maximum amount of income that may be excluded from taxation under the Foreign Earned Income Exclusion for 2023.

To qualify for the Foreign Earned Income Exclusion, the taxpayer's primary residence must be located in a foreign country.

A taxpayer must have received income from working or business activities conducted outside the U.S. to qualify for the Foreign Earned Income Exclusion.

A U.S. citizen who has lived uninterruptedly in a foreign country for an entire tax year.

A U.S. resident alien who is a citizen or national of a treaty country and has lived uninterruptedly in a foreign country for an entire tax year.

A U.S. citizen or resident alien who has been physically present in a foreign country for at least 330 full days within a 12 month period.

A person participates in a business activity for more than 100 hours during the year and at least as much as everyone else, including owners and non-owners.

An activity like health, law, or engineering where the taxpayer works more than 100 hours but doesn't materially participate through other tests.

The taxpayer actively worked in the business for at least 5 of the past 10 years.

The taxpayer actively worked in a personal service activity for at least 3 of the past 5 years.

Trades or businesses where the taxpayer's effort and skill are crucial, and capital investments are not a major factor in generating income.

A person actively participates in the business on a continual and substantial basis throughout the year.

The participant's involvement represents the majority of everyone's participation in the business, including owners and non-owners.

A taxpayer who meets at least one of the material participation tests can be considered a 'material participant' in the business.