statements: Legend A = Tax avoidance E = Tax evasion N = Neither a. Sue writes a $707 check for a charitable contribution on December 28‚ 2013‚ but does not mail the check to the charitable organization until January 10‚ 2014. She takes a deduction in 2013. Tax Evasion b. Sam decides not to report interest income from a bank because the amount is only $19.75. Tax Evasion c. Harry pays property taxes on his home in December 2013 rather than waiting until February 2014. Tax
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marginal change (new-old)tax/taxable average tax/taxable Effective tax/total Federal Taxes Income Employment (Social Security and Medicare tax(.9%+ on ee) by employer and ee; self-employee tax) un Excise (quantity sold) Transfer (MV estate/gift) state and local taxes: income‚ sales and use‚ excise‚ and property taxes Corp. tax returns 3/15 partnerships 5 mo. Extension no file a tax return penalty= 5% per mo. tax due. Max= 25% tax owed statute of limitations: later tax return filed
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Brenda loaned her son Bart $250‚000 to purchase a new home. Brenda did not charge interest on the loan. Brenda was required to recognize imputed interest income and Bart had imputed home mortgage interest expense that he deducted as an itemized deduction. Would Brenda’s and Bart’s combined total income taxes likely increase or decrease as a result of the imputed interest? #23. On July 1‚ 1998‚ when Betty was 65 years old‚ she purchased an annuity contract for $108‚000. The annuity was to pay
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P R E N T I C E H A L L’ S F E D E R A L TA X AT I O N 2013 Individuals EDITORS THOMAS R. POPE University of Kentucky KENNETH E. ANDERSON University of Tennessee CONTRIBUTING AUTHORS D. DALE BANDY University of Central Florida LEANN LUNA University of Tennessee N. ALLEN FORD University of Kansas TIMOTHY J. RUPERT Northeastern University ROBERT L. GARDNER Brigham Young University CHARLENE HENDERSON Mississippi State University RICHARD J. JOSEPH Hult International
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outside the home and the dependant received child care services. During the tax year‚ 2010‚ the Petersan’s sold their primary residence for $520‚000.A line by line review of the Petersan’s tax return will show the appropriate treatment of income‚ deductions‚ child care expense and the sale of a primary residence. The first step is to determine the taxpayers filing status and then which is the appropriate form to use in the preparation of the tax return. According to the Internal Revenue Service‚ the
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Calculate the Clyente’s Adjusted Gross Income (Must show all of your work for partial credit /25 points) 2. Calculate the Clyente’s Taxable Income (5 points) 3. Calculate the Clyente’s Deduction for AGI (Must show your work for partial credit /10 points) 4. Calculate the Clyente’s deductions from AGI (Must show your work for partial credit /25 points) Part C. Short Response Questions (5 points each) 1. Dick and Jane are divorced in 2013. At the time of the divorce‚ Dick had a lawsuit
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ACA1 Tax Treatments for Individual Returns (Task 302.2.3) A. Recommended Tax Filing Status The tax filing status that I would recommend is Married Filing Joint. The reason for this is that the IRS has various tax breaks for married persons that file together that are unavailable if you file married filing separate. It also affect the tax rate‚ they will pay a lower rate of taxes if they file together than they would if they filed separately. A2a. Taxable and Non-Taxable Income Taxable
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Exclusions- items specifically removed from the tax base by law Deductions- subtracted from the tax base rather than fully excluded. Flat tax- one single rate applied to the entire tax base. Progressive tax- rates increase as tax base increases. (Federal income tax) Tax credit- authorized deduction in gross tax liability Real and personal property taxes- Real (real estate) Personal (difficult to enforce because property is easily concealed or moved‚ with the exception of vehicles which must
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withholdings is lost and new quarterly payments on income and self employment taxes must be made. c) Paul purchased a personal residence will have a tax position change because you will have a new mortgage interest and property tax deductions cause the standard deductions to be replaced by itemization on Schedule A. 7. Distinguish between taxes that are proportional and those that are progressive. Proportional taxes – The tax rate remains constant for any given income level. Progressive taxes-The
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Reform Act to make certain that high-income individuals‚ corporations‚ trusts‚ and estates pay at least some small amount of tax‚ in spite of any deductions‚ credits‚ or exemptions. It’s basically an alternative method used by the IRS for calculating your taxes‚ an extra tax that was an addition to regular income tax. To calculate your AMT you start with your AGI (adjusted gross income)‚ then you give back the “tax preference items” and “adjustments” under the AMT rules to get your taxable income for
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