Form 4940-2025

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The document provides essential tax information for Active Duty Military and Reserve Personnel, focusing on how significant life events impact their tax situations. It covers topics such as joint returns, armed forces pay, moving expenses, combat pay, tax credits, and extensions of deadlines. Additionally, it outlines resources for further assistance and details about the Volunteer Income Tax Assistance (VITA) program available to military members.

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Who pays the 720 excise tax?

Excise taxes are independent of income taxes. Often, the retailer, manufacturer or importer must pay the excise tax to the IRS and file the Form 720. Some excise taxes are collected by a third party.

What is the IRS Code 4940?

Internal Revenue Code Section 4940 imposes an excise tax on the net investment income of most domestic tax-exempt private foundations, including private operating foundations. Some exceptions apply. An exempt operating foundation is not subject to the tax.

How do you calculate the excise tax?

The formula is the price of product tax rate quantity = tax liability.

Do private foundations pay taxes on investment income?

There is an excise tax on the net investment income of most domestic private foundations. This tax must be reported on Form 990-PF, Return of Private Foundation PDF, and must be paid annually at the time for filing that return or in quarterly estimated tax payments if the total tax for the year is $500 or more.

What is the purpose of form 941?

Employers use Form 941 to: Report income taxes, Social Security tax, or Medicare tax withheld from employees paychecks. Pay the employers portion of Social Security or Medicare tax.

What is the 5 percent rule for family foundations?

In short, the U.S. government expects foundations to use their assets to benefit society and it enforces this through section 4942 of the Internal Revenue Code, which requires private foundations to distribute 5% of the fair market value of their endowment each year for charitable purposes.

What is the excise tax on a family foundation?

A: For tax years beginning after Dec. 20, 2019, domestic tax-exempt private foundations are subject to an annual excise tax of 1.39% on their net investment income (IRC Sec. 4940(a)).

Are nonprofits subject to federal excise tax?

The Tax Cuts and Jobs Act added a provision stating that, beginning in 2018, nonprofit organizations could be charged an excise tax if it pays more than $1 million to certain covered employees. These final regulations generally mirror the proposed regulations released in 2020 and guidance provided in Notice 2019-09.

Form 4940-2025

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