...Tax deductions are related to the legislative grace and the ability-to-pay concept. 2 Restrictions: 1. Only deductions allowed by the tax law may be subtracted to compute taxable income. Congress allows deductions for the costs of earning income and certain expenditures. 2. A deduction is allowed for an item only if all requirements are satisfied. Business Expense: the expense must have a business purpose that is unrelated to its tax effect. Gross Income: Only the excess of an individual’s capital investement. The deduction for an item may not exceed the cost. Basis: The cost of an asset or an expense. Represents the max amt of an expenditure that can be deducted as a recovery of capital. Trade or business expenses are deducted FOR adjusted gross income (always) Production-of-income expenses are deducted FROM adjusted gross income-Does not apply to Corportations (deduction is reduced by 2% agi. If agi is 40,000 (6%=$800) and exp is $6000, amt of deduction is $5200) Conduit Entity: Investment expenses of individuals & miscellaneous itemized deductions must be reduced by 2% of agi. Most common deductions that must be reported separately -Charitable contributions - Investment interest expense -Investment expense -Section 179 expense -Nondeductible expenses TRADE OR BUSINESS EXPENSES • Sec 162, “ all the ordinary and necessary expenses…including salaries & compensation, traveling expenses (including meals & lodging), and rentals or other payments required)...
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...Homework 2 1. Rachel is a limited partner in Starship Partners. This year Starship reported that Rachel's share of dividend income was $3,700 and his share of municipal interest was $2,750. Early this year Rachel found a bundle of $100 bills in the alley outside his apartment. When no one claimed the money, the cash (a total of $2,400) was returned to Rachel. Finally, Rachel earned salary of $42,000 but almost $6,500 was withheld for income taxes and FICA tax. Compute Rachel's (a) realized income and (b) gross income. BE SURE TO CALCULATE BOTH AMOUNTS. a) 3,700 + 2,750 + 2,400 + 42,000 = $50,850 b) 3,700 + 2,400 + 42,000 = $48,100 2. Ted works as a painter for local businesses on weekends, and he often provides services in exchange for property. This year Ted provided painting services in exchange for $1,275 of car repair services, $3,570 of groceries, and a certificate of deposit (CD) for $4,050. The (CD) matures next year with interest. Finally, Ted received a gift card that can only be applied for $850 of clothing at a local mall. Ted has only applied the gift card to purchase $100 of clothing. Compute Ted's gross income assuming that he uses the cash basis of accounting. 1,275 + 3,570 + 4,050 + 850 = $9,745 3. Jennifer was married on November 1 of this year and on that day received numerous gifts from her extended family. Her grandfather presented Jennifer with a check for $15,000; her uncle gave Jennifer 1,000 shares of Ford stock worth $10 per share (the uncle purchased...
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...Many people make an assumption that federal income tax cuts mean additional finances in their pockets. Over the years, experts have noted that this is a political strategy to entice voters, and was heavily used during the 2012 election cycle. During that year, individuals had many differences between parties’ positions. Republican Governor and presidential aspirant Mitt Romney observed that the 2011 tax rates at times referred to as ‘Bush tax cuts’ be reduced and extended with an additional of 20% with the topmost rate diminishing from 35% to 28%. On the other hand, Democrat presidential candidate and the incumbent leader of the United States advocated for an increase in tax gains from 35% to 39.6% for taxable income higher than $388,350 (Romney1377). The leader of the world’s most powerful nation also stated advocated for an rise in capital gains tax then at 15% to...
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...ACC 401 Federal Income Tax Final Paper http://homeworktimes.com/downloads/acc-401-federal-income-tax-final-paper/ For More Tutorial Visit: http://homeworktimes.com/ For any Information Email Us: : onlineeducationalservice@gmail.com ACC 401 Federal Income Tax Final Paper http://homeworktimes.com/downloads/acc-401-federal-income-tax-final-paper/ For More Tutorial Visit: http://homeworktimes.com/ For any Information Email Us: : onlineeducationalservice@gmail.com ACC 401 Federal Income Tax Final Paper http://homeworktimes.com/downloads/acc-401-federal-income-tax-final-paper/ For More Tutorial Visit: http://homeworktimes.com/ For any Information Email Us: : onlineeducationalservice@gmail.com ACC 401 Federal Income Tax Final Paper http://homeworktimes.com/downloads/acc-401-federal-income-tax-final-paper/ For More Tutorial Visit: http://homeworktimes.com/ For any Information Email Us: : onlineeducationalservice@gmail.com ACC 401 Federal Income Tax Final Paper http://homeworktimes.com/downloads/acc-401-federal-income-tax-final-paper/ For More Tutorial Visit: http://homeworktimes.com/ For any Information Email Us: : onlineeducationalservice@gmail.com ACC 401 Federal Income Tax Final Paper http://homeworktimes.com/downloads/acc-401-federal-income-tax-final-paper/ For More Tutorial Visit: http://homeworktimes.com/ For any Information Email Us: : onlineeducationalservice@gmail.com ACC 401 Federal Income Tax Final Paper http://homeworktimes...
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...Exam #3 ACNT 1331 Spring 2012 | | 1. Terry Trumbull purchased a tract of land. In order to have city water, he had to pay the water company $5,000 to extend the water line to his property. The $5,000 cost is an addition to the basis of the land. a. True b. False Answer: _____ 2. The basis for nonbusiness property changed to business use is the greater of the adjusted basis of the property or its fair market value on the date it is converted to business use. a. True b. False Answer: _____ 3. David Dawson owned two shares of a corporation's common stock. He paid $60 for one share and $30 for the other share. The corporation declared a stock dividend which gave stockholders two new shares of common stock for each share they held. After the distribution, David owns six shares of stock with an adjusted basis of $15 each. a. True b. False Answer: _____ 4. For purposes of the related party rules, the taxpayer's parents are "related persons," but the taxpayer's siblings (brothers and sisters) are not. a. True b. False Answer: _____ 5. The wash sale rules merely postpone the loss until the taxpayer sells the securities in a nonwash sale transaction. a. True b. False Answer: _____ 6. Leonard Lambert's commercial building, which had an adjusted basis of $500,000, was partially destroyed by fire. The fair market value was $800,000 just before the fire and $600,000 immediately after. Leonard received $150,000 insurance proceeds and deducted...
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...2015, Elizabeth filed a joint tax return with her husband Gary. Both spouses are 67 years old and have no dependents. After filing their tax return, Elizabeth realized that Gary has 500,000 of embezzled funds in a bank account that she was unaware of. Although the embezzled funds earned $25,000 of interest, they were not reported on the couple’s 2014 tax return. The following income and deductions were reported on the tax return. Gross Income $295,000 Deductions for AGI $8,500 Itemized Deductions $13,700 Issues: 1) What is the couple’s taxable income and liability using the amounts reported on the tax return? 2) What is the taxable income and liability including the interest income from the embezzled funds? 3) What is the taxable income and liability including the interest income from the embezzled funds and the funds itself? 4) Based on the Internal Revenue Code, what amount of taxable income and liability is correct for reporting purposes? 5) Will Elizabeth receive relief from the liability of not reporting the correct amount of income under “Innocent Spouse” rules? Authorities: Reg. § 1.6015-2 Rev. Rul. 61-185, 1961-2 CB 9, IRC Sec. 61 Conclusion: 1) Taxable Income for the couple is $263,800 and tax liability is $62,958.50. 2) Taxable income for the couple, including interest from embezzled funds, is $289,274 and tax liability is $71,364.92. The additional tax cost will be $8,406.42. 3) Taxable income for the couple, including the...
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...Security, and IL state withholding. I work hard for my money as im sure most of you do and thought of our government sticking their dirty hands into our pockets and taking anywhere from 30-40% of our hard earned money really rubs me the wrong way. There is a very common sense solution to this serious problem that is being very seriously discussed and considered in our Congress. It is a plan called the Fair Tax. Legislative Status: The FairTax has been reintroduced for the 111th Congress. It is H.R. 25 in the House and S. 296 in the Senate. Benefits of the FairTax: The FairTax plan brings fairness, transparency, and efficiency to our unfair, complex, and confusing Tax Code. The FairTax rewards job creation, hard work, and individual responsibility. By doing away with payroll taxes, companies can afford to hire more employees and outsourcing looks less attractive. By taxing consumption instead of income, individuals are provided with a strong incentive to work hard because they keep more of what they earn. By taxing spending, the FairTax allows us to control how much tax we pay depending on our individual lifestyle choices. The FairTax ensures that all Americans pay their...
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...the 1990s: assuring upward mobility for working Americans in the new world economy; resolving the great American dilemma of race; restoring a civil society and strengthening the social ties that foster a sense of community; finding America’s proper role in the post-Cold War world; and rethinking the size, shape, and mission of government in an Information Age. The Foundation explores public controversies over cultural questions—race, ethnicity, gender, religion, morality, and civic education—that are often ignored in conventional political discourse. The Foundation’s Project on Tax Reform and Economic Growth works to develop a tax reform program that is consistent with a progressive distribution of the tax burden, and can help promote stronger job and business formation, greater productivity, and higher family incomes. This report is the first of two new reports outlining the essential features of such a tax reform program. The preface contains more information about the four previous reports produced by this project. To order previous reports or additional copies of this report, please call the Foundation at (202) 546-4482. They are also available on the World Wide Web at http:/ /www.dlcppi.org/economic.htm. The Foundation is a nonpartisan research and educational foundation associated with the Democratic Leadership Council and the...
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...Tax Research 1．A higher federal income tax rate will benefit the overall economy; however, it is closely related to people’s incentive to work and government spending. A higher income tax rate hurts people’s incentive to produce, since it lowers the after-tax return from work. The higher the tax rate, the more time people spend evading taxes and the less time they spend on more productive activity, and also, it depends on the current tax rate levels and how much the tax rate increases. Considering a low income tax society, say 5%, a 1% increase in the income tax rate will not significantly reduce the productivity compared with another society with 90% income tax. On the other hand, a lower federal income tax rate will be some kind of bad for the overall economy, which will decrease not only the income of the country, but also the life levels of the whole country citizens. There is no doubt that with less money, the government will care less about the foundational installations of the country, the health care of the citizens, even the public security. What is more, even though the less income tax rate will be incentive for some people who would not like to donate their money to the country to work harder to earn much more money, leading the high production of the country, the extra money is far more less to overweigh the decrease of the levels of the whole country. However, a lower income tax rate on wage income can increase the labor supply. Based on the labor demand function...
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...9 4. 4.1 4.2 4.3 5 5.1 5.2 5.3 6 6.1 6.2 6.3 7 7.1 7.2 7.3 A Brief Survey Geography Population and Languages Political System The Economy Swiss Company Law Governing Law and Forms of Business Enterprises Corporation Books of Account Annual Business Report Taxation of Resident Corporations Liability to Swiss Tax Determination of Taxable Income Tax Privileged Corporations Treaty Benefits for Swiss Resident Corporations Computation of Corporate Taxes Assessment of Corporate Taxes Withholding Taxes of Dividend Distributions of Swiss Corporations Filing of Tax Returns, Assessments of Tax, Tax Litigation Corporate Reorganizations Taxation of Non-Resident Corporations Liability to Swiss Tax Determination of Taxable Income and Capital of Swiss Permanent Establishments Remittance of Profits Withholding Tax Income Subject to Withholding Tax Exemptions from Withholding Tax Withholding and Reimbursement of Tax Indirect Taxes Value Added Tax Stamp Duties Real Estate Taxes Personal Taxation Income Taxes on Residents Income Taxes on Non-residents Other Individual Taxes Seite 2 7.4 8 8.1 8.2 8.3 9 9.1 9.2 10 10.1 10.2 10.3 10.4 10.5 10.6 Tax Returns, Assessment and Payment of Tax Labour Conditions an Social Security Working Conditions Social Security Social Security Treaties Government Incentives Export Risk Guarantee Program Investment Incentives Government Controls Import and Export Controls Restrictions on Investment Acquisition of Swiss Real Property Anti-Trust Legislation Price...
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...controversial subject. Due to its complexity, people from the left to the right have objected to it. There was a time when the federal government was funded only with revenue from imported products. A little bit of history informs us that income tax started in 1861 with the Civil War, when congress passed a bill required everyone to pay three percent of their income starting at $600 to $10,000 each year (Boortz & Linder, 2005). Since the end of Civil War, the battle began to get rid of the income tax. The truth is that the tax takes money off our pockets. But, I proposed that tax increase on income $ 250,000.00 or more per year because that will decrease taxation on the lower income levels, and increase revenue to the government to fight budget and reduce the national debt. As stated above, income tax was a battle in 1896 and continues to be a battle in 2012. The Sixteenth Amendment of the US Constitution was born to collect revenue from American workers, and that was a fight between Democrats and Republican over income taxation. Due to a 2% tax in 1894, the two major political parties took the fight all the way to the US Supreme Court with a question about the constitutionality of that law. The Supreme Court ruled that the income tax was unconstitutional. As a response to that ruling, Joseph Bailey a democratic senator from Texas presented a bill requesting an income tax. Republicans on their part required an Amendment to the US Constitution in other to support that piece of legislation...
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...Financial Management Project: Tax Environment and Its Relation with Financial Management Submitted By: Hooria Majid Submitted To: Sir Khalid Mehmood ACKNOWLEDGEMENT I would like to thank Allah Almighty for giving us the courage and devotion to complete this project. I am highly grateful to our advisor Mr. Khalid Mahmood whose supervision and guidance in relation to selection of material for perusal and formatting of the research paper helped us to do the work on time and in a professional manner. I extend my gratitude towards University of Lahore Islamabad Campus for giving me such kind of opportunities. Thank you Hooria Majid ABSTRACT Taxes affect citizens, economy of the country, businesses, governance mechanisms, etc. Not only revenue mobilization, an effective system of taxation helps in formalizing the economy, encourages economic growth, shapes political cohesion between tiers of the Government, and results in increase in social sector service delivery. We are now quite used to hearing the rhetoric by the government and bureaucracy on how Pakistan has one of the world’s lowest tax to GDP ratios since long...
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...of money 8. electronic fund transfers (EFT)- money transferred from one bank account without any actual money (paper or coins) changing hands 9. electronic funds- 10. encryption- code 11. endorse- approve or sign 12. federal income tax- the tax you pay the federal government on the income you earn 13. Federal Reserve- institution responsible for creating and tracking all of the country’s money 14. FICA (Federal Insurance Contributions Act) – Social Security tax 15. fixed income/expense- income that does not change month to month 16. gross income- pay before withholdings 17. income- all the money that you earn or receive 18. net income- pay after withdrawals 19. payee-the person a check is written to 20. personal Identification Number (PIN)- identification number used with a debit card 21. purchasing power- the number of goods or services that can be purchased with a unit of currency 22. standard of living- a measure of how comfortable you are based on the things you own 23. state income tax- tax determined by individual states on the income you earn 24. surplus-when more money is earned then spent 25. variable income/expense- Activity 1: Research the Federal Reserve System – Create a short PowerPoint to inform – I will...
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...Public Finance Methods in Nigeria The Federal Republic of Nigeria is comprised of 36 states located in West Africa geographically bound by the Republic of Niger to the north, the Gulf of Guinea (on the Atlantic Ocean) to the south, the Republic of Cameroon and Chad on the east and Republic of Benin on the west. Since gaining full independence from the British in 1960, Nigeria has gone from a Parliamentary system of government (modeled after the British Parliament), the Biafran Civil War, and numerous dictatorships to the current Democratic system of government. Widely described as the most populous country in Africa (accounting for over half of West Africa’s population alone[i]), the US State Department estimated in 2010 a population of approximately 152 million people of 250 Ethnic groups with the largest ethnic groups comprising of Hausa-Fulani (north), Igbo (south-east), Yoruba (south-west) and Kanuri (north). The religions practiced in Nigeria are Islam, Christianity and indigenous African traditional worship. The Hausa’s are from the northern part of the country and are predominantly Muslims, the Yoruba are from the south west and are predominately an even mix of Christians and Muslims, the Igbos are from the southeast and are predominately Christians. The official language of Nigeria is English in addition to other local dialects. Nigeria’s commercial capital (and former political capital), Lagos, is located in the southwestern part of the country while the political...
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...203 Week 3 Quiz 1. Question : The time between the legislation of fiscal policy and its effect on output and employment is called 2. Question : The federal income tax is 3. Question : The largest single item in the federal budget is 4. Question : The Investment Tax Credit 5. Question : The measured deficit would be larger if 6. Question : Opponents of discretionary fiscal policy believe that it 7. Question : Keynes blamed economic downturns primarily on 8. Question : Keynes argued that planned saving was 9. Question : A structural deficit 10. Question : When aggregate planned expenditure falls short of potential output, the economy experience Course Home Work aims to provide quality study notes and tutorials to the students of ECO 203 Week 3 Quiz in order to ace their studies. ECO 203 WEEK 3 QUIZ To purchase this visit following link: http://www.activitymode.com/product/eco-203-week-3-quiz/ Contact us at: SUPPORT@ACTIVITYMODE.COM ECO 203 WEEK 3 QUIZ ECO 203 Week 3 Quiz 1. Question : The time between the legislation of fiscal policy and its effect on output and employment is called 2. Question : The federal income tax is 3. Question : The largest single item in the federal budget is 4. Question : The Investment Tax Credit 5. Question : The measured deficit would be larger if 6. Question : Opponents of discretionary fiscal policy believe that it 7. Question :...
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