Thank you, but I'm afraid things become more misterious for me. :)
So, every US citizen have to fill "tax return"...
Well, stupid intermediate semantic question - why the fuck "return"? Return of what to whom? Paying part of money you got from employer or customers to IRS is in no way a "return". Or it is assumed that all money is a property of system or sourced by system so you return part of money you got to system?
Sorry, back to question - US citizen have to fill "tax retrun" and show income and pay calculated percent of income. He could extempt some money from taxing showing some acquisitions. Showing he owns a plane with price $10M will save him only $1.2M (or whatever income tax is). How he could save more than price of plane in taxes? Show price of plane he "got in ownership" as $100M? And that persons who did "ownership transfer" did the magic of that "ownership transfer" to not pay taxes for selling or taxes for receiving gift, it that the trick?
Sorry if it is too stupid questions, but I can't get the point. :)
The idea of a "tax return" in America is that the government expects everyone to overpay their taxes throughout the year, then file a tax return form to claim the amount that was overpaid. In this sense, the excess taxes are returned to the worker (without interest, of course!).
Many do not play this game and will underpay taxes so they owe at the end of the year, but if you owe too much there is a penalty fee.
I'm not sure how all of this relates to your questions about the plane. Gifts over 10,000 are taxed. But I don't think this ownership transfer has anything to do with taxes. I think she wants to fly in a private jet without being tracked, so instead of owning a jet officially tied to her name, she has made arrangements to fly in secret on planes she does not own, but has access to in every way. This is guesswork on my part.
The idea of a "tax return" in America is that the government expects everyone to overpay their taxes throughout the year, then file a tax return form to claim the amount that was overpaid. In this sense, the excess taxes are returned to the worker (without interest, of course!).
Thanks. So tax payments is two-stage process - first you pay full taxes, then fill that "tax return" and may be get something back. Got it.
And paying full taxes sounds like some continuous process through the year - you mean you should pay something by yourself to IRS every time you earn some money without filling papers?
I'm not sure how all of this relates to your questions about the plane.
It does not. Just curiosity about practical side of tax paying in US. :)
As for real intentions - looks like it is just a virtue signalling of kind. Funny, that regardless of how many planes you have you could not fly on more than one, so there will be no any difference in so called "carbon emissions" from your persona. :)
The tax laws are insane here, so most regular people that live here don't even understand them. But I will add that if you're a wage earner, the business you work for is responsible for sending the taxes to the government every paycheck, so it is automatically deducted before you receive the check, all you get to decide is what percentage they send. It is also required to pay taxes on a lot of things, like private sales for cash, but no one reports cash transactions. It's why people are afraid of a cashless electronic currency, because it will close the possibility of unreported private sales.
If you own a small business or make a lot of money on investments the government expects you to send in tax money every 3 months, based on your estimated earnings.
if you're a wage earner, the business you work for is responsible for sending the taxes to the government every paycheck, so it is automatically deducted before you receive the check
This is how it is done in Russia. Employer pays all empoyees taxes and insurances, and if Russians talk about salary it is always about sum after all taxes and insurances paid. Normally, Russian employee don't need to bother with taxes at all.
It is also required to pay taxes on a lot of things, like private sales for cash, but no one reports cash transactions.
That's the difference. Here only really huge private sales have to be reported and only if they are too often. Say, you could sell an expensive car or a house, but you don't need to pay anything unless you do it more often than once a year or something like.
f you own a small business or make a lot of money on investments the government expects you to send in tax money every 3 months, based on your estimated earnings.
Thank you. Didn't know that. I thought that once a year all Americans have to recall all their earnings, calculate tax, fill some paper and send it along with money transfer to IRS. :)
It's called a tax return because that is a somewhat common terminology in data collection. Information is requested by the government, and the "returns" are the delivery of that data by the various parties.
Taylor Swift does not personally own that plane. She is part of a business entity, and probably actually several different business entities, that manage the various aspects of "Taylor Swift", e.g. intellectual property rights and licensing, concerts/tours, appearances, licensing her public images for products, etc.
As a business, you do not have to pay taxes on business expenses. A plane is a business expense as it is used to transport people to and from business events (and also probably for personal use, but the primary purpose as far as reporting is concerned is for business use).
So, if the business makes $10 million per year, for example, and spends $2 million on transportation expenses, $3 million on salaries, $2 million on advertising, then there is $3 million left, and this is what can be taxed (so obviously, you want to make sure every possible business expense is reported, so the amount of taxes you must pay is minimized).
One note, generally things like planes, vehicles, computers, etc., are amortized over the expected lifetime of that item. Meaning, if a plane is expected to last 10 years, then 1/10th of the cost of the plane will be reported as a business expense each year for 10 years, even if they paid for it all at once up front. This also allows for selling these items early without then needing to pay a tax on the profits of the sale, because you are generally selling it for the remainder of the value that you have not yet claimed as expenses, and thus break even on that item.
As to "transferred ownership", the business entity transferred ownership of the plane to another business entity. It may be another business entity associated with Taylor Swift, possibly a business entity that will then use a service to "rent out" that plane to other people, and thus produce revenues using that plane.
Thank you. So, I just underestimated the richness of word "return". :)
As for "transferring ownership", from my knowledge of business, in Russian version, I still don't get how one business entity could "transfer ownership" to another business entity and it will not be accounted as sale. I understand than entity that received plane will be able to write offsomething from taxing and all that stuff. But then, entity that delivered plane will have to show income or whatever from that transfer and so pay taxes, and also lose its own ability to write off expenses on plane. I just can't get in head what's the point of such operation, especially between business entities wiith one owner. First, I assumed that "transfer ownership" means some operation additional to the "sale" and "gift". Something third that doesn't involve any taxable operations. It is interesting for me personally, because f.e. I can't just take a computer from one of my businesses and just move it to the account of another without making sale deal or gift deal, which both will lead to paying additional taxes. Even if actually I'm the only real owner of this computer and it doesn't change hands at all. If there is some third option to do it in US, then highly probably it exists in one way or another in Russia too, since our business laws heavily copied from Western one.
Transer is just a more generic word in this case, that encompasses all possible methods of moving an asset from one place to another. It could be a sale, a gift, or just moving an asset with a remaining loan to another entity.
In this case with Taylor Swift, they are also probably using the generic word transfer to keep it more private as to exactly where the plane is ending up.
There are tax implications with moving assets in a fashion that is neither sale nor gift, but this is not necessarily uncommon, especially when forming the business entity in the first place. The owners generally transfer some of their personal assets to the business entity and receive some share of the business, often somewhat relative to the amount of assets they provided to the business (other assets such as talent, personal networks, etc. are not as tangible but still factor into the share each person gets).
Also, just a note, when selling the plane, there are not necessarily tax implications. If you have been amortizing your expense claims based on the expected lifetime of the asset, then you have only paid taxes on the depreciated value of the asset, and the sale amount is likely the remaining value on that asset, and therefore no profit and thus no taxes on that sale. Of course, if the asset has appreciated in value since you originally purchased it, for example real estate, then that is a different story.
The owners generally transfer some of their personal assets to the business entity and receive some share of the business, often somewhat relative to the amount of assets they provided to the business (other assets such as talent, personal networks, etc. are not as tangible but still factor into the share each person gets).
Exactly same it works here. You could add something to the "authorized capital" of enterprise anything you want as owner. Even do that not only at moment of business creation. But you (or your business entity) become an owner or co-owner of that business.
Theoretically, yes, I just looked into our laws, one business could "invest" something into another business "authorized capital", and yes, you will not pay any taxes for such "ownership transfer". But, as side-effect, first business will become a co-owner of that another business proportional to the share of "investment" among total "authorized capital".
Also, just a note, when selling the plane, there are not necessarily tax implications. If you have been amortizing your expense claims based on the expected lifetime of the asset, then you have only paid taxes on the depreciated value of the asset, and the sale amount is likely the remaining value on that asset, and therefore no profit and thus no taxes on that sale.
Here we have something similar. You could "write off" some equipment or adjust its price in business assets balance proportional to the part of manufacturer declared lifetime that passed.
Also, you could theoretically sell something below market price but that makes sense only if you pay taxes from profit (13%), not from turnover (6%) - we have both options for LLCs and other types of businesses. And it could attract unnecessary attention from tax agency, especially if it was something expensive. Not fatal, and could be settled, but unpleasant.
Interesting, thanks for clarifications. I appreciate your patience.
Thank you, but I'm afraid things become more misterious for me. :)
So, every US citizen have to fill "tax return"...
Well, stupid intermediate semantic question - why the fuck "return"? Return of what to whom? Paying part of money you got from employer or customers to IRS is in no way a "return". Or it is assumed that all money is a property of system or sourced by system so you return part of money you got to system?
Sorry, back to question - US citizen have to fill "tax retrun" and show income and pay calculated percent of income. He could extempt some money from taxing showing some acquisitions. Showing he owns a plane with price $10M will save him only $1.2M (or whatever income tax is). How he could save more than price of plane in taxes? Show price of plane he "got in ownership" as $100M? And that persons who did "ownership transfer" did the magic of that "ownership transfer" to not pay taxes for selling or taxes for receiving gift, it that the trick?
Sorry if it is too stupid questions, but I can't get the point. :)
The idea of a "tax return" in America is that the government expects everyone to overpay their taxes throughout the year, then file a tax return form to claim the amount that was overpaid. In this sense, the excess taxes are returned to the worker (without interest, of course!).
Many do not play this game and will underpay taxes so they owe at the end of the year, but if you owe too much there is a penalty fee.
I'm not sure how all of this relates to your questions about the plane. Gifts over 10,000 are taxed. But I don't think this ownership transfer has anything to do with taxes. I think she wants to fly in a private jet without being tracked, so instead of owning a jet officially tied to her name, she has made arrangements to fly in secret on planes she does not own, but has access to in every way. This is guesswork on my part.
Thanks. So tax payments is two-stage process - first you pay full taxes, then fill that "tax return" and may be get something back. Got it.
And paying full taxes sounds like some continuous process through the year - you mean you should pay something by yourself to IRS every time you earn some money without filling papers?
It does not. Just curiosity about practical side of tax paying in US. :)
As for real intentions - looks like it is just a virtue signalling of kind. Funny, that regardless of how many planes you have you could not fly on more than one, so there will be no any difference in so called "carbon emissions" from your persona. :)
The tax laws are insane here, so most regular people that live here don't even understand them. But I will add that if you're a wage earner, the business you work for is responsible for sending the taxes to the government every paycheck, so it is automatically deducted before you receive the check, all you get to decide is what percentage they send. It is also required to pay taxes on a lot of things, like private sales for cash, but no one reports cash transactions. It's why people are afraid of a cashless electronic currency, because it will close the possibility of unreported private sales.
If you own a small business or make a lot of money on investments the government expects you to send in tax money every 3 months, based on your estimated earnings.
This is how it is done in Russia. Employer pays all empoyees taxes and insurances, and if Russians talk about salary it is always about sum after all taxes and insurances paid. Normally, Russian employee don't need to bother with taxes at all.
That's the difference. Here only really huge private sales have to be reported and only if they are too often. Say, you could sell an expensive car or a house, but you don't need to pay anything unless you do it more often than once a year or something like.
Thank you. Didn't know that. I thought that once a year all Americans have to recall all their earnings, calculate tax, fill some paper and send it along with money transfer to IRS. :)
It's called a tax return because that is a somewhat common terminology in data collection. Information is requested by the government, and the "returns" are the delivery of that data by the various parties.
Taylor Swift does not personally own that plane. She is part of a business entity, and probably actually several different business entities, that manage the various aspects of "Taylor Swift", e.g. intellectual property rights and licensing, concerts/tours, appearances, licensing her public images for products, etc.
As a business, you do not have to pay taxes on business expenses. A plane is a business expense as it is used to transport people to and from business events (and also probably for personal use, but the primary purpose as far as reporting is concerned is for business use).
So, if the business makes $10 million per year, for example, and spends $2 million on transportation expenses, $3 million on salaries, $2 million on advertising, then there is $3 million left, and this is what can be taxed (so obviously, you want to make sure every possible business expense is reported, so the amount of taxes you must pay is minimized).
One note, generally things like planes, vehicles, computers, etc., are amortized over the expected lifetime of that item. Meaning, if a plane is expected to last 10 years, then 1/10th of the cost of the plane will be reported as a business expense each year for 10 years, even if they paid for it all at once up front. This also allows for selling these items early without then needing to pay a tax on the profits of the sale, because you are generally selling it for the remainder of the value that you have not yet claimed as expenses, and thus break even on that item.
As to "transferred ownership", the business entity transferred ownership of the plane to another business entity. It may be another business entity associated with Taylor Swift, possibly a business entity that will then use a service to "rent out" that plane to other people, and thus produce revenues using that plane.
Thank you. So, I just underestimated the richness of word "return". :)
As for "transferring ownership", from my knowledge of business, in Russian version, I still don't get how one business entity could "transfer ownership" to another business entity and it will not be accounted as sale. I understand than entity that received plane will be able to write offsomething from taxing and all that stuff. But then, entity that delivered plane will have to show income or whatever from that transfer and so pay taxes, and also lose its own ability to write off expenses on plane. I just can't get in head what's the point of such operation, especially between business entities wiith one owner. First, I assumed that "transfer ownership" means some operation additional to the "sale" and "gift". Something third that doesn't involve any taxable operations. It is interesting for me personally, because f.e. I can't just take a computer from one of my businesses and just move it to the account of another without making sale deal or gift deal, which both will lead to paying additional taxes. Even if actually I'm the only real owner of this computer and it doesn't change hands at all. If there is some third option to do it in US, then highly probably it exists in one way or another in Russia too, since our business laws heavily copied from Western one.
Transer is just a more generic word in this case, that encompasses all possible methods of moving an asset from one place to another. It could be a sale, a gift, or just moving an asset with a remaining loan to another entity.
In this case with Taylor Swift, they are also probably using the generic word transfer to keep it more private as to exactly where the plane is ending up.
There are tax implications with moving assets in a fashion that is neither sale nor gift, but this is not necessarily uncommon, especially when forming the business entity in the first place. The owners generally transfer some of their personal assets to the business entity and receive some share of the business, often somewhat relative to the amount of assets they provided to the business (other assets such as talent, personal networks, etc. are not as tangible but still factor into the share each person gets).
Also, just a note, when selling the plane, there are not necessarily tax implications. If you have been amortizing your expense claims based on the expected lifetime of the asset, then you have only paid taxes on the depreciated value of the asset, and the sale amount is likely the remaining value on that asset, and therefore no profit and thus no taxes on that sale. Of course, if the asset has appreciated in value since you originally purchased it, for example real estate, then that is a different story.
Exactly same it works here. You could add something to the "authorized capital" of enterprise anything you want as owner. Even do that not only at moment of business creation. But you (or your business entity) become an owner or co-owner of that business.
Theoretically, yes, I just looked into our laws, one business could "invest" something into another business "authorized capital", and yes, you will not pay any taxes for such "ownership transfer". But, as side-effect, first business will become a co-owner of that another business proportional to the share of "investment" among total "authorized capital".
Here we have something similar. You could "write off" some equipment or adjust its price in business assets balance proportional to the part of manufacturer declared lifetime that passed.
Also, you could theoretically sell something below market price but that makes sense only if you pay taxes from profit (13%), not from turnover (6%) - we have both options for LLCs and other types of businesses. And it could attract unnecessary attention from tax agency, especially if it was something expensive. Not fatal, and could be settled, but unpleasant.
Interesting, thanks for clarifications. I appreciate your patience.