This website uses cookies to ensure you have the best experience. Learn more

Tax Acct Essay

1743 words - 7 pages

History:
* First tax in 1861 to fund Civil War
* Repealed in 1865
* Income tax law passed in 1894 but rejected by Supreme Court
* 16th amendment was passed in 1913
* 42% of revenue is raised from individual income tax
* 40% from social security, 9% corporate income tax, 9% other

Tax Structure:
* Progressive tax structure: tax rate increases as the tax base increases
* US income tax system is this way
* Proportional tax structure (flat tax): tax rate remains the same regardless of tax base
* Regressive tax structure: tax rate decreases as the tax base increases
* Social security tax system is this way
* Average tax rate: total tax ...view middle of the document...

Relationship test: child, step, foster, bro/sis, half/step, nephew/niece, grandchildren
a. Must be younger than taxpayer
2. Age test: must be under 19 at end of year OR under 24 and full-time student OR totally disabled
3. Residency test: must live with taxpayer more than half the year
4. Support test: child must not provide more than half of support
b. Food, lodging, clothing, education, dental/medical, recreation, transportation
5. Special test for qualifying child of more than one taxpayer
c. Tie-breaker rules: (1) parent (2) parent whom child lived with longer (3) parent with highest AGI
d. If no parent qualifies, then person with highest AGI

Divorced parents:
* Usually goes to parent with custody, but could go to other if these are met:
* Child has been in custody of either or both parents more than half the year
* Either or both parents provided more than half support
* Parents are divorced, legally separated or living apart for the last 6 months of year
* Look to divorce decree for exemption
* Custodial parent sign for 8332 to give away exemption

Qualifying relative 4 tests:
* Not a qualifying child
* Relationship or member of household test
* Related OR member of household the entire year
* Gross income test
* GI of dependent must be less than $3,650
* Support test
* Taxpayer must provide over 50% of dependent’s support
* Exceptions:
* Multiple support: not 50% but greater than 10%
* Child of divorced/separated parents

Standard Deduction:
* Increases for those age 65 and older or blind
* Is limited for dependent taxpayers to the highest of $950 or taxpayer’s earned income plus $300 but can’t be over basic standard deduction

Interest and penalties:
* Interest charged on assessments
* Federal short term rate plus 3%
* Failure to file tax return
* 5% per month or fraction of month, not to exceed 25%
* Failure to pay tax penalty
* 0.5% per month or fraction of month, not to exceed 25%
* Failure to pay estimated income tax penalty
* Minimum of:
* 90% of current year tax liability
* 100% of prior year’s tax liability if the taxpayer’s AGI in the previous year was less than $150,000
* Accuracy-related penalty
* Applies when there is negligence or substantial understatement (25% or more)
* Rate is 20% of tax due
* Fraud penalty
* Applies to the understatement of tax that is attributable to fraud
* The rate is 75%

Income recognition:
* Income must be realized and earned, 3 conditions:
* Economic benefit of the transaction
* Conclusion of the transaction
* Income from transaction must not be tax-exempt income
* Cash receipts and disbursement method
* Constructive receipt: right to control, receipt of property or services will trigger income...

Other Papers Like Tax Acct

Accounting Essay

804 words - 4 pages income tax returns. As a result of these losses, Speedy’s income tax returns for the past three years, (2008, 2009, and 2010), are being examined (audited) by the IRS. The revenue agent, RESEARCH PAPER Acct. 483 – Fall 2011 Page 1 of 2 Ron Sneaky, has submitted proposed tax adjustments. These examinations have resulted in a proposed tax assessment because the IRS intends to disallow the losses for racing - taking the position that such

Avoiding Irs Penalties Essay

1002 words - 5 pages ACCT 340 Avoiding Penalties A common assumption is that the IRS is always right but that has been proven to be a myth. If one believes that the IRS has made an error, there are multiple actions that can be made to appeal their decision. According to a report prepared by Nina E. Olsen, a National Taxpayer Advocate (NTA), a major issue that was brought to the attention of Tax Court included the issue of “Failure to File and Pay Penalties

Economics Final Review

4545 words - 19 pages current or capital account b)For Ex graph -illustrate effect on supply or dem& for for ex c)if central bank wants to maintain original ER (fixed or dirty float), what need to do? d)if central bank allows ER to float, what happens? 1. Domestic Interest Rate decrease. dec cap inflows & inc cap outflows as for assets look more profitable than domestic assets Capital acct moves into deficit. Reduces S of for exch (S shift left) & inc D

Becoming a Texas Cpa

2323 words - 10 pages manageable for candidates who use all available resources. The entire process is challenging, but with hard work and dedication, becoming a Texas CPA is certainly an achievable goal. APPENDIX A University of Houston – Main Campus Board Recognized Accounting/Tax Research and Analysis ACCT 4377/7878 Government and Nonprofit Accounting – 2 hours ACCT 7363 Contemporary Public Accounting Topics – 2 hours ACCT 4376/5376/7370 Advanced Auditing – 2

Intermediate Accounting Sample Test

1726 words - 7 pages ACCT 3302 Fall 2012 Exam 3 1 (20): 2 (10): 3 (10): 4 (16) 5 (16): 6 (8): 7 (5): 8(15): 9 (5): 10 (5): Total (100) _____ Name: INSTRUCTIONS 1. Your test should include 8 pages (cover sheet plus 7 pages of test). All pages should be turned in at the completion of the exam. 2. On the problems, include ALL computations, properly labeled in the space provided. Partial credit may be given at the discretion of the

acct 557 midterm

3954 words - 16 pages ACCT 557 - MIDTERM  1. ​ (TCO B) Define temporary differences, future taxable amounts, and future  deductible amounts.​  (Points : 10)    Temporary Differences are the differences between the book income and taxable  income. Revenue and/or expensed Items are recognized in one period for taxes  and another for the books.     Future Taxable amounts are amounts that increasesÂ

Shark Corporation

555 words - 3 pages Discussion Board 3 Jenni Buckner Liberty University Acct 612: Tax Research & Jurisprudence Professor Janet Forney November 22, 2012 One of my clients, Shark Corporation is trying to make as much money on a transaction. They are selling a building that has some substantial hidden damage. The Shark Corporation wants me to tell the client there is no damage to the building. This raises some ethical dilemmas when practicing as a

Acct 504 Case Study 2

961 words - 4 pages ACCT 504 Case Study 2 Springfield Express is a luxury passenger carrier in Texas. All seats are first class, and the following data are available: Number of seats per passenger train car 90 Average load factor (percentage of seats filled) 70% Average full passenger fare $160 Average variable cost per passenger $70 Fixed operating cost per month $3,150,000 a. What is the break-even point in passengers and revenues per month? BP in

Charter Company

644 words - 3 pages 1. Calculate the following ratios for each year during the period 1980-1983. Comment on the trend indicated by each ratio with respect to the financial performance and condition of the Charter Company. A. Profitability: Return on average total assets (assume a 46% income tax rate) = EBIT/Total Assets 1983 = 133896 / 1813199 = .073845 1982 = 108180 / 1628046 = .066448 1981 = 155673 / 1541326 = .100999 1980 = 145485 / 1746260 = .083312

Accounting Based

2621 words - 11 pages DTA: A DTA would result from expenses being recognized on the income statement before the tax return, or revenues being reported on the tax return before the income statement. This would be the case for all revenues that are collected in advance such as prepaid rent, where the taxable income would exceed pretax acct. income. Another scenario would be the case of warranty expense that is expensed immediately on the income statement, and not until

Evade Company

1155 words - 5 pages Akhmad Yusuf ACCT 351 Research Case 1 1. As of December 31, 2011, what amount, if any, of sales due should be recognized in eVade’s financial statements? According to FASB ASC 450-20-25-2, in order to recognized a loss contingency, two of the following conditions have to be met; information available before the financial statements are issued or are available to be issued indicates that it is probable that an asset had been

Related Essays

Income Tax Expense Essay

1376 words - 6 pages event. limitations Liability for uncertain postions 4,800 has now Income tax expense 4,800 expired. C14‐Chp‐01‐3‐Acct for Income Tax Expense (3) Page 1 Prepare corporate tax return using information in Part 1 through Part 7 shown on tab 1. Assume company did not record entry for uncertain postions - when preparing the return. 1120 1a 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 a 20 b 21 22 23 24 25 26 27 28 29 U.S. Corporation

Acct1501 Notes Essay

3422 words - 14 pages ,  SE  are  permanent  accounts  i.e.  never  closed,  balance  is  carried  forward  to  next  acct  period   • Purpose  is  to  ‘zero  out’  for  the  next  acct  period   − DR  all  revenue  accounts  &  CREDIT  P&L  summary   − CR  all  expense  accounts  &  DEBIT  P&L  summary   − E.g.  revenue  has  CR

Accounting Midsem Essay

3884 words - 16 pages acct 1511 notes Chapter 6 – Financial Reporting Principles, Accounting Standards and Auditing 6.2 Accounting Principles and the use of Accounting Information   Doing accounting takes expert knowledge, considerable experience and continuous attention to new problems and solutions. Concepts and principles are important, as they form logical structure that practising accountants use every day to consider problems to make recommendations

Tax Laws And Accounting Essay

1448 words - 6 pages Tax Law and Accounting University of Phoenix/ACCT 483 July 20, 2009 Tax Law and Accounting The history and time line of federal, state, and local tax systems within the United States follows events in history that have shaped the current tax laws of today. Today the law is almost inconceivable with so many interpretations and loopholes. In today’s business world not only are companies governed by federal income tax laws, but also