A taxpayer’s average tax rate is determined by dividing the total tax paid by the total income of the taxpayer. A) True B) False Beginning in 2011‚ all paid tax return preparers must sign up with the IRS‚ pay a fee‚ and obtain a preparer tax identification number. A) True B) False 22. Taxpayers who are unable to pay their taxes may enter into a payment plan with the IRS if the amount they owe is within certain limits. A) True B) False 23. At which of the following IRS
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(2) dividends received of $15‚000‚ (3) dividends paid of $25‚000‚ and (4) income taxes. What are the firm’s income tax liability and its after-tax income? What are the company’s marginal and average tax rates on ta Answer: Income $365‚000 Less Interest deduction (50‚000) Plus: Dividends received 4‚500 Taxable income $319‚500 For a corporation‚ 70% of dividends received are excluded from taxes; therefore‚ taxable dividends are calculated as $15‚000(1 - 0.70) = $4‚500. Tax
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3.7‚ calculate the marginal and average tax rates for a single taxpayer with the following incomes: (Do notround intermediate calculations. Round "Average tax rate" to 2 decimal places.) | | Income | Marginal Tax Rate | Average Tax Rate | a. | $21‚000 | % | % | b. | $51‚000 | % | % | c. | $304‚000 | % | % | d. | $3‚200‚000 | % | % | | Explanation: a. | Taxes = (0.10 × $8‚500) + 0.15 × ($21‚000 − $8‚500) = $2‚725 | Marginal tax rate = 15% | Average tax rate = $2‚725/$21
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dividends received of $15‚000‚ (3) dividends paid of $25‚000‚ and (4) income taxes. What are the firm’s income tax liability and its after-tax income? What are the company’s marginal and average tax rates on table income? Income 365‚000 LESS: Interest Charges (50‚000) ADD: Dividends received 4‚500 (30% of 15‚000) Taxable income: 319‚500 *In addition‚ 70% of dividends received are excluded from taxes 15‚000 (1-.7) = $4‚500 Tax 22‚250 + 0.39 (319‚500 – 100‚000)
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Chapter 2 Textbook Solutions QUESTIONS 3. Why is EBIT an important line item in the income statement? What does EBIT show us? ANSWER Earnings before interest and taxes (EBIT) is the lowest line on the income statement that isn ’t affected by the firm ’s method of financing (the relative amounts of debt and equity used). It is important because it allows an evaluation of physical business operations separate from the influence of financing decisions. It is therefore often called operating income
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|(2-6) Statement of Retained Earnings | | | | | |In its most recent financial statements‚ Newhouse Inc. reported $50 million of net income and $810 million of retained earnings. The previous retained earnings | | |were $780 million. How much in dividends was paid to shareholders during the year? (Brigham 79)
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depreciation plus taxes | | ending net fixed assets minus beginning net fixed assets plus depreciation minus taxes | | beginning net fixed assets minus ending net fixed assets plus depreciation | | beginning net fixed assets plus ending net fixed assets minus depreciation | | ending net fixed assets minus beginning net fixed assets plus depreciation | Net capital spending for a period is the ending fixed asset amount minus the beginning fixed asset value plus depreciation. Taxes have no impact
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–exam1-01/02/2012 Questions 1 thru 5 are True or False‚ 6 thru 11 are multiple choice 1) The marginal tax rate is useful in tax planning because it measures the tax effect of a proposed transaction. True. 2) If a taxpayer’s total tax liability is $30‚000‚ taxable income is $100‚000; the average tax rate is 30 percent. True. The average tax = total federal income tax divided by taxable income 3) S Corporations (pass thru entities) result in a single level of taxation. (Are not
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increasing use of vehicles. Policies to control car emissions in Brazil have relied basically on mandatory emission standards and subsidies for specific cleaner technology resulting in substantial decrease of car emission rates. Nevertheless‚ taxes on car sales‚ differentiated by vehicles’ size and fuel‚ have also influenced car emission patterns. This paper analyses the compliance trend of the Brazilian fleet with environmental standards between 1992 and 1997. We find that larger automobiles
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1) A recession occurs when real GDP declines. ( T ) 2) For an economy as a whole‚ income equals expenditure because the income of the seller must be equal to the expenditure of the buyer. ( T ) 3) If the marginal propensity to consume is 0.8‚ the marginal propensity to save will be 0.2. ( T ) 4) When Government totals expenditure greater than total revenue‚ the government budget is in surplus. ( F ) * If Government total expenditure greater than
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