Income a. Less: Deductions for adjusted gross income d. Adjusted gross income h. Less: The greater of— Total itemized deductions or standard deduction e. Less: Personal and dependency exemptions c. Taxable Income 3-8: In choosing between the standard deduction and itemizing deductions from AGI‚ what effect‚ if any‚ does each of the following variables have? a. The age of the taxpayer(s). If over the age of 65‚ a person is allowed the additional standard deduction amount on his or
Premium Taxation in the United States
Under Section 165 taxpayers are allowed to deduct uncompensated losses sustained in the taxable year as a result of theft. Sec. 165 (a)‚ (e). In order to be able to claim the casualty loss deduction the loss must qualify as theft‚ the tax payer must prove the amount of loss due to theft and the taxpayer must also prove the date the theft was discovered. As mentioned in both Robert S. Gerstell‚ 46 T.C. 161 (1966)‚ and Michael Monteleone‚ 34 T.C. 688 (1960)‚ “for tax purposes‚ whether a theft loss
Premium Taxation in the United States Tax Internal Revenue Service
1.The Dumonts are in the early years of the accumulation of wealth stage of the financial life cycle. During this longest stage of the life cycle‚ the Dumonts will establish their lifestyle and build a foundation for the two later stages. This phase is characterized by: 1. The Dumonts are in the early years of the accumulation of wealth stage of the financial life cycle. During this longest stage of the life cycle‚ the Dumonts will establish their lifestyle and build a foundation for the two later
Premium Taxation in the United States Taxation
tax‚ which is the gross income that obtained in business in the amount of $300‚000. He will actually have to pay "income" and "self-employment" tax on the "net" earnings from his business... not the entire $300K because presumably he has business deductions. Issue (b): How is the $25‚000 treated for purposes of federal tax income? The $25‚000 would not be reported as income. The reasons why are that the $25‚000 should have been classified as an expense on the balance sheet. It would not have
Premium Taxation in the United States
income to your brother? Do you get a deduction? (2 pts) No‚ this is not taxable income for my brother… The first $13‚000 that my brother receives is considered a tax free gift‚ but any amount after that is taxable. So in this case I guess it would depend on just how much I paid in rent for my brother…was it just a onetime “gift” or if more than onetime‚ how much does it total in rent paid on his behalf. Do I get any deductions? No‚ I do not get a deduction; “gifts” are never deductible. A gift
Premium Tax Taxation in the United States Employee benefit
Comprehensive Income Tax Course: Module 2 Final Exam 1. Fred prepared his own tax return last year. This year Fred decided to have his tax return prepared by a professional. During the interview process Fred’s tax preparer realized Fred needs to repay the education credit he took for his son last year. For which of the following reasons would a taxpayer be required to repay an education credit? a) Taxpayer received a refund of personal living expenses b) Taxpayer received tax-free educational
Premium Taxation in the United States Taxation Tax
Permanent AMT Relief................................. 3 Pease Limitation ........................................... 4 Personal Exemption Phaseout ................... 4 Federal Estate‚ Gift And GST Taxes ........... 5 State And Local Sales Tax Deduction ....... 6 Child Tax Credit ............................................. 6 Earned Income Credit .................................. 6 Other Child-Related Tax Relief .................. 6 Other Education Incentives........................ 7 More
Premium Taxation in the United States Taxation
does not qualify for the child tax credit. Spouse B’s mother does not qualify as a dependant because she does not meet the minimum requirement of having half of her support come from the family. The family would be able to take a higher amount of deductions and therefore pay less in taxes if they choose Married Filing Jointly. By filing jointly the couple is able to take advantages of such credits as the child tax credit‚ the Lifetime Learning Credit & the hope credit. They are also able to save more
Premium Taxation in the United States Taxation
estates‚ and trusts. 4. What is a tax audit? What are some different types of audits? A tax audit is an examination of your tax return by the IRS to verify that your income and deductions are accurate. A tax audit is when the IRS decides to examine your tax return a little more closely and verify that your income and deductions are accurate. 5. What are two ways that a person’s wealth may be taxed? Describe these taxes. Estate taxes are taxes levied on a person’s estate when that person dies. To do
Premium Tax Taxation in the United States Progressive tax
that this exemption is substantially higher than the exemption from regular income tax. Regular income tax is adjusted for certain items computed differently for AMT‚ such as depreciation and medical expenses. No deduction is allowed for state taxes or miscellaneous itemized deductions in computing AMT income. Taxpayers with incomes above the exemption whose regular Federal income tax is below the amount of AMT must pay the higher AMT amount. [1] Certain sources identify the introduction of the
Premium Taxation in the United States Taxation Tax