Most Recent Law & Taxes QandAs

What is Fraud?
Answer:
Although the legal definition of fraud may vary, it is generally defined as “deliberate misrepresentation” or “deception” for personal gain. One of the most common types of fraud is defrauding people of money. Insurance fraud, security fraud, investment fraud, forgery, and embezzlement are just a few types of fraud which may constitute “criminal fraud.”
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What is Ordinary Income?
Answer:
Ordinary income is income received that is taxed at the highest rates or ordinary income rates. Ordinary income includes salary or wages, dividends from certain investments, gambling winnings – or any source of income that is subject to standard marginal tax rates – or does not qualify as a capital gain.
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What is Self-Employment Tax?
Answer:
Self-employment tax is a social security and Medicare tax for imposed upon individuals who are self-employed. If an individual is paid by an employer, social security taxes and Medicare taxes will be figured and withheld by the employer.
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What is a Tax Shelter?
Answer:
A tax shelter is a type of financial arrangement for legally decreasing your taxable income. Tax shelters are usually specialized accounts, such as a 401(k), which lowers the amount of tax you’re required to pay on any money you earn. Investors often utilize tax shelters as an investment strategy to offset losses or minimize their tax liabilities.
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