...SCHEDULE A (Form 1040) Department of the Treasury Internal Revenue Service (99) Name(s) shown on Form 1040 ▶ Information Itemized Deductions about Schedule A and its separate instructions is at www.irs.gov/schedulea. ▶ Attach to Form 1040. OMB No. 1545-0074 Attachment Sequence No. 07 Your social security number 2013 Medical and Dental Expenses Taxes You Paid Interest You Paid Note. Your mortgage interest deduction may be limited (see instructions). Caution. Do not include expenses reimbursed or paid by others. 1 Medical and dental expenses (see instructions) . . . . . 1 2 Enter amount from Form 1040, line 38 2 142,565 3 Multiply line 2 by 10% (.10). But if either you or your spouse was 3 born before January 2, 1949, multiply line 2 by 7.5% (.075) instead 4 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- . . 5 State and local (check only one box): a Income taxes, or . . . . . . . . . . . 5 b General sales taxes 6 Real estate taxes (see instructions) . . . . . . . . . 6 7 Personal property taxes . . . . . . . . . . . . . 7 8 Other taxes. List type and amount ▶ 8 9 Add lines 5 through 8 . . . . . . . . . . . . . . . . 10 Home mortgage interest and points reported to you on Form 1098 10 11 Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person’s name, identifying no., and address ▶ 15,565 14,257 . . . . . . 4 1,308 ...
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...SCHEDULE A (Form 1040) Department of the Treasury Internal Revenue Service (99) Name(s) shown on Form 1040 ▶ Information Itemized Deductions about Schedule A and its separate instructions is at www.irs.gov/form1040. ▶ Attach to Form 1040. OMB No. 1545-0074 Attachment Sequence No. 07 Your social security number 2012 Medical and Dental Expenses Taxes You Paid Interest You Paid Note. Your mortgage interest deduction may be limited (see instructions). Caution. Do not include expenses reimbursed or paid by others. Medical and dental expenses (see instructions) . . . . . 1 Enter amount from Form 1040, line 38 2 Multiply line 2 by 7.5% (.075) . . . . . . . . . . . 3 Subtract line 3 from line 1. If line 3 is more than line 1, enter -0- . . State and local (check only one box): a Income taxes, or . . . . . . . . . . . 5 b General sales taxes 6 Real estate taxes (see instructions) . . . . . . . . . 6 7 Personal property taxes . . . . . . . . . . . . . 7 8 Other taxes. List type and amount ▶ 8 9 Add lines 5 through 8 . . . . . . . . . . . . . . . . 10 Home mortgage interest and points reported to you on Form 1098 10 11 Home mortgage interest not reported to you on Form 1098. If paid to the person from whom you bought the home, see instructions and show that person’s name, identifying no., and address ▶ 1 2 3 4 5 . . . . . . 4 } . . . . . . 9 11 12 Points not reported to you on Form 1098. See instructions for special...
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...The issue in this case is to assess Phillip’s taxable income for the year ended 30 June 2010. According to section 4-15 Income Tax Assessment Act 1997 (ITAA 1997), taxable income equals assessable income (Division 6) minus deductions (Division 8). Assessable Income In order to determine the assessable income, Division 6 of ITAA 1997 would be the relevant legislation and in particular Section 6-1(1) refers assessable income consists of ordinary income and statutory income. - Rental Income Section 6-5(1) defines “assessable income” to include income according to ordinary concepts. In the case of Adelaide Fruit & Produce Exchange Ltd, ordinary income is characterized as exhibiting recurrence and regularity. For Phillip’s case, rent falls under income from property as it exploit the property and considered to be income producing. Whereas Adelaide’s ruling for periodic and regular payment is satisfied by which a tenant contracts to pay the landlord, Phillip, for the use of premises. Hence, rent income of $55 000 is assessable under Section 6-5 ITAA 1997. However, $5 000 rent received on 5 July 2010 is not included since the case is only calculating for year ended 30 June 2010. - Manufacturing of tennis racquets business Section 6-5 ITAA 1997 defines “business” as sustained and regular transactions and transactions done in the course of carrying on a business. This is satisfied by the manufacturing of tennis racquets where it regularly manufacture and...
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... c. The tugboat is 10-year property; MACRS depreciation is 10% x $85,000 = $8,500. 21. a. DDF has $507,000 ($575,000 - $68,000) Section 1231 gain on the land sale. It has a $635,000 ($125,000 - $760,000) Section 1231 loss on the sale of the equipment. b. The $635,000 loss is netted against the $507,000 gain. The result is a $128,000 net Section 1231 loss that is deducted against DDF Corporation’s ordinary 23. a. Machine 8: $12,000 – $14,000 = $2,000 loss realized. Machine 6: $24,000 - $19,000 = $5,000 gain realized. b. The machines are Section 1231 property. The loss on Machine 8 is a Section 1231 loss; the gain on Machine 6 is ordinary income due to Section 1245 recapture because the gain is less than the prior depreciation deductions ($45,000 - $19,000 = $26,000 accumulated depreciation). c. The $2,000 loss is deducted directly from ordinary income; the $5,000 Section 1245 recapture is included directly in ordinary...
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...lifetime. If the economy is low then real estate prices may go down to compensate accordingly so that the house will sale. This would be an opportune time to purchase. If the economy is high or strong then the prices are more competitive based on the amount of people that are willing to buy houses. “If measured marginal costs and benefits are provided, it is much easier to calculate the ideal price and quantity.” How does the removal of the tax deductions on mortgage interest affect the housing market? Removal of the tax deduction on mortgage interest affects the housing market by causing the demand for homes to decrease and therefore housing prices to fall even more. Today people that purchase houses count on being able to deduct the mortgage interest from their taxes the following year. People will buy houses up to late December in order to get this deduction. Having a tax deduction on purchasing a home is part of the incentive. If you can purchase a home and deduct the interest paid when you file your taxes, it works to your benefit. If the tax is removed then monthly payments are higher as well. How do other changes in government spending and taxes affect your decision? I am currently in the market to buy a home and evaluating the economy has been quite beneficial in my thought process. If the deficit continues to grow then the government will be forced to make changes in their spending and slow down the economy. In my preparation to buy a house this will be an opportune time...
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...Retirement Planning Allen and Nancy Berger The ideal retirement benefit plan to install in Allen’s company would be the Defined Benefit Plan. The defined benefit plan best fits Allen’s current business situation in multiple ways. Allen will be able to maximize corporate tax deduction because employers are generally allowed to contribute more (and therefore tax deduct) than the alternative retirement plans. Business owners can write off these contributions as a business expense which is tax deductible, which will assist in Allen maximizing his corporate tax deduction. Defined benefit plans have no contribution limits, Allen and Nancy have a goal to secure a $61,241.90 after-tax serial payment by retirement. Other retirement plans such as the 401(k) have contribution limits that will not allow for Allen and Nancy to meet this future retirement goal. Defined benefit plans are truly ideal for small business owners who are behind in retirement savings and are nearing retirement. In the case of Allen who is currently 54 years old, the defined benefit plan is ideal because he is not restricted on how much he can contribute, so by the time he does reach the age of retirement, he will likely be able to reach his goal. Because of the maximums on plans such as 401(k) and Money Purchase plans, those alternatives would serve little use to someone like Allen looking to retire in less than a 20 year period. Allen currently has stable, predictable cash...
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...Name; Anita Nana Yaa Addai Index; Bsc/Admin/12/13/047 Course; Financial Accounting Users of financial information and their informational needs. Users of accounting information are either internal or external to the organization. These users need information to help them make informed or reliable decisions or judgements with regards to the organization. Different groups have different demands for the financial information contained in a set of accounts. Information needs of internal users These include; * Management; This category is made up of the senior employees who run the organization on a day- to- day basis. They are interested in information such as, Finance of the organization (working capital) The growth prospects (value of shares and dividends) * Employees ; This is the group of workers in the organization made up of existing potential and past employees. The members of this group are concerned with job security and future prospects. Therefore, they need information to assess the company’s profitability, liquidity and growth prospects. Employees need information about The financial state of the organization ( for their salaries) The growth and stability of the organization ( new investments ) to ensure continuity of employment. Profitability. Others are informational needs of external users including * Customers; Those who buy from the organization either for cash or on credit are interested in; The profitability The growth and stability ( new product...
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...ATTRACTIVE INCENTIVES FOR INVESTORS The most competitive Free Trade Zone in Latin America: 15% Income Tax as well as the possibility to sell to local markets • • • • • A single 15% income tax rate, allowing sales in the local market. No customs taxes (VAT and customs duties). VAT exemption for raw materials, inputs and finished goods sold from the national customs territory to industrial Free Trade Zone users. Exports made from Free Trade Zones to foreign countries (except Peru) benefit from international trade agreements. No customs taxes on machinery, related directly to the business operation which is imported from abroad and entered into the FTZ. Single Enterprise Free Trade Zone (SEFTZ): Investors can take advantage of the benefits provided by the Free Trade Zones even by locating out of a Permanent Free Trade Zone. Investors can sign Legal Stability Contracts with the Colombian Government In order to promote new investments and expand existing ones, the government provides investors the option to sign a Legal Stability Contract, securing key conditions for investment promotion. Companies must meet the following requirements: • • • Minimum investment of USD 1,930,000 . Investors must pay a premium to the government equivalent to 1% of the investment. The period of the contract can last between 3 and 20 years. 1 . Income Tax deductible expenses Among the deductions included are the following: • 100% of the amount paid for industry and commerce, signs and billboards...
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...1) The advertising expense is absolutely to be claimed 100% for the amount incurred as it is a part of the business property investment. Repairs is categorized as to the extent which is to refresh the house as to its beginning state will be a deduction for example repair the leaking proof, repair the floor be tear out. However the repairs that is excessive relating to using the better material or replacing the stuff or equipment which are not supposed to be a part of the property such as electronic system, gas, water system and etc would be not entitled to be deductible. 2) Kelly would record the amount that is out of her pocket ($350-$295=$55) as the deduction for repair. 3) Nina and Ben can claim the depreciation for the investment property as 2.5% per year applied for kind of house or building, so they could claim $146,700 x 2.5% = $3668 for ITR 2013. The written down value of the property could be $146,700 - $3668 x 9 - $3688 x 313/365 = $110542 . 4) If the house is rented out fully and Luke does not living there at all, then it is treated as an investment property and all the expenses incurred likewise would be deductible. In the case Luke would like to rent it partly for example he rents out 2 out of 3 rooms of house and hold the remaining room for living when he is staying the holiday there, then he could no claim the occupation expense such as depreciation, mortgage or interest,… but the running expense such as advertising, cleaning, travel to the...
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...06"()()
CC:ITA:2:MEBrookens COR-117177-00 March 19,2001 MEMORANDUM fOR MR. MICHAEL PERLMUITER LEAD CUSTOMER SERVICE REPRESENTATIVE ACCOUNTS MANAGEM£NT DIVISION III, GROUP S140 JACKSONVILLE, fL FROM: Heather C. Maloy Associate Chief Counsel (Income Tax & Accounting) Section 280A{c)(o)
SUBJECT:
This technical assistance memorandum responds to your inquiry concerning the effect of § 280A(.cX6) of the Internal Revenue Code on the deductibility by an individual taxpayer of expenses attributabie to the rental of a portion of a dwelling unit to his employer. The employer is an S corporation of which the empfoyee is the sole shareholder and sole employee. During the period of the rental the individual used the rented portion in performing services as an employee. The individual atso used the dwelling unit as a principal residence. Our discussion supplements previous oral advice we have given you on this subject. Your inquiry was prompted by an individual described above who was concerned because he could not find a place on the applicable forms -to claim 'Certain business expenses and depreciation attributable to the rental income. You asked for guidaooe concerning the appropriate form(s) to use in reporting the rental income and deductions. Please note that technical assistance Words: 1846 - Pages: 8
...day old food the store is able not only save on publicity costs, but use the tax benefits for food donation to help with cost. To keep and build clientele the company needs to get their name out in the public eye. To do so Company Q also needs to build their reputation as a company that cares. If a business seems empathetic to the public’s needs more people will support and recommend using Company Q’s services. It gives a consumer the feeling of helpfulness and of giving back. The consumer feels good about supporting a store that cares about the local community. Radio, television, and online and print advertisements all serve to draw customers to supermarkets. Advertising among the top four supermarket chains (Kroger Co., Albertson’s Inc., Safeway Inc. and Publix Super Markets, Inc.) ran combined annual totals of $1.9 billion in the early part of the 21st century (http://www.msgcpa.com/files/Grocery.pdf). When donating food to a local food bank companies are able to save money on those costs. The food banks often times maintain public campaigns and benefit celebrations that advertise sponsors of not only money but also goods. With the food banks doing the advertising of the company’s generosity Company Q is able to project a positive community image and save on advertising costs. When it comes to allowable deductions for charitable donations the general rule is a company is allowed a deduction with respect to a contribution to a public charity. The property is described...
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...ASSIGNMENT OF INTERNATIONAL FINANCE SUBMITTED TO : SUBMITTED BY : MRS. PARUL KHANNA PRIYANKA BAKHSHI MBA 4 Union Finance Minister Pranab Mukherjee today tabled his third consecutive union budget in Lok Sabha, primarily focusing on trimming the rising fiscal deficit, rising inflation, interest rate and boosting the decreasing growth rate. Here is the key features and main points of Union Budget 2012-13. Budget identifies five objectives relating to growth recovery, private investment, supply bottlenecks, malnutrition and governance matters. * GDP growth to be 7.6 per cent (+ 0.25 percent) during 2012-13. * Amendment to the FRBM Act proposed as part of Finance Bill. New concepts of "Effective Revenue Deficit" and "Medium Term Expenditure Framework" introduced. * * Central subsidies to be kept under 2 per cent of GDP; to be further brought down to 1.75 per cent of GDP over the next 3 years. * Efforts to reach broadbased consensus on FDI in multi-brand...
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...struggling to pay for college. The administration is also planning tax incentives to assist in managing the financial burden of student loan debt. American families are continuously trying to figure out how they are going to pay for the rising cost of higher education expenses. These expenses can be overwhelming for those who aren't prepared. The U.S government is attempting to support those in pursuit of higher education and is sympathetic to those who are having problems managing this expense as well as those who have accumulated student loans that seem impossible to repay. In coming to the aid of taxpaying American citizens the U.S. government is offering a number of tax credits and other incentives that can provide substantial relief for many taxpayers. Let’s first consider the various credits and deductions available to students of higher education and for their parents. The most prevalent ways of reimbursing taxpayers for higher education expenses is through tax credits. There are two main credits available, one was introduced in 2009. The American Opportunity Tax Credit, it provides a credit of up to $2,500 per student. This credit is offered for up to four years of undergraduate studies and is therefore both an improvement and an expansion on the Hope Credit which it replaced, and which was only applicable for the first two years of college (Cussen, 2010). The American Opportunity Tax Credit has an income limitation for single taxpayers with adjusted...
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...Should Americans Spend or Save? Money is the monitory exchange in transactions. How Americans spend and save is determined by our limited choices of resources. Consumers make rational and irrational choices. Our decisions are directed by our social, emotional, psychological factors and level of income also affects our decisions. The market gives us choices by the production of goods and services they produce. To produce the consumable goods businesses have to sell and buy raw materials, labor, plant & equipment. The market and government a force behind what is presented for consumption. The government is a direct force of these goods and services. Government tries to create a balance of economic determinates by imposing taxes to raise revenues and establishing rates at which the private sector can borrow money to consume. Government tries to create a stable economy where the amount produced equals the amount consumed. There are many parts of our economy and each plays an important role in economic efficiency. Consumer spending accounts for the biggest portion of our nations GDP at 70%. Businesses are 17% of GDP they are important because they create the jobs, good and services for the consumer. Governments roll in overall GDP is 19%. Net exports and imports create the remainder of our GDP. The GDP is the ratio by which we measure the total spending, total costs of goods sold that equals our total income. Spending is increased when the level of credit...
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...agreements are reached, “settlement payments” occur. Hence, people consider settlement payments as prices that one party pay to the others for their wrongful behaviors or violation of laws. For tax purposes, are settlement payments deductible? According to Internal Revenue Code (IRC) Section 162(a), any ordinary and necessary business or trading expenses are deductible during the current taxable year. That is to say if any settlement payments meet criterions of deduction under 162(a), but not in the exception of Section 162, should be deductible. In real court cases, IRS uses the exceptions of Section 162 to disallow settlement payments. Nowadays, more court cases and arguments appear to show that even though some settlement payments are in the exceptions of 162 (a), they can also be deducted. The relief of settle payments deductibility causes disagreements among tax professionals. Some believes settlement payments may be composed of deductible compensatory damages from non-deductible punitive damages; however, others worries that allowing deductibility may leads an indirect lesser penalty, because juries are unaware of tax benefits from deductions. This essay will mainly discuss the deductibility of settlement payments by explaining of original laws and regulation languages, citing tax professionals’ perspectives and illustrating actual court cases. According to IRC Section 162(a), “all the ordinary and necessary expenses” from “any trade...
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