Accounting For Income Tax

Accounting for Income Tax
CHAPTER
Accounting for Income Taxes
OBJECTIVES
After careful study of this chapter, you will be able to: 1. 2. 3. 4. 5. 6. 7. 8. 9. Understand permanent
and temporary differences. Explain the conceptual issues regarding interperiod tax allocation.
Record and report deferred tax liabilities. Record and report deferred tax assets. Explain an
operating loss carryback and carryforward. Account for an operating loss carryback. Account for an
operating loss carryforward. Apply intraperiod tax allocation. Classify deferred tax liabilities and
assets.
19–1
SYNOPSIS
Overview and Definitions 1. Significant differences normally exist between a company 's pretax
financial income and taxable income because generally accepted accounting ... Show more content
on Helpwriting.net ...
A corporation 's pretax financial income may be less than its taxable income if the income tax laws
require that revenue received in advance of being earned must be included in taxable income when
received or if the tax laws disallow the deduction of accrued expense until actually paid. The
following will result in temporary differences that generate a deferred tax asset (future deductible
amounts) because a corporation 's taxable income is greater than pretax financial income in the year
in which the temporary difference originates. As a result, future taxable income will be less than
future pretax financial income when the item reverses in future years. Method Used for Book
Purposes Prepaid rent, interest, royalties, or other revenue received in advance included in income
when earned Gains on sales and leasebacks are reported over the life of the lease contract Warranty
expense, bad debt expense, compensation expense for stock option plans, and losses on inventories
in a later
... Get more on HelpWriting.net ...

Corporate Income Tax
The federal corporate income tax was created in 1909 with a rate of 1% for all businesses who had
an income above the line of $5,000. The tax rate has been as high as 52.8% in 1969 and has been
divided into different rates for different income levels. Today, the federal corporate income tax rate
is a uniform rate of 35% for companies who have an income of over $18.3 million. Throughout
history, people have debated whether lowering the federal corporate income tax rate will result in
job creation. Although lowering the tax rate might promote job creation within the country instead
of job creation overseas, support more company re–investment in research and development, and
allow consumers to save more; lowering the federal corporate income ... Show more content on
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For example, Ireland lowered its corporate tax rate to 12.5%, which got the economy booming. The
country's gross domestic product rate grew at a rate of around 26.3%. Ireland's low corporate tax
rate attracted successful foreign companies to invest in Ireland. For example, American companies
such as Microsoft, Google, and Apple all have subsidiaries in Ireland to take advantage of Ireland's
low corporate tax rate (Semeuls). However, the low corporate tax rate was not the only reason the
country had flourished. There were several other factors that helped boost Ireland's economy. One of
them included Ireland joining the European market in the 1990s, which allowed goods to flow freely
across the countries in the European Union. Soon, Ireland became an entry point within Europe and
large corporations started to use Ireland to manufacture goods and sell the goods to other European
countries without the attachment of any tariffs. In addition to Ireland joining the European market,
Ireland attracted many corporations to its country because it was primarily an English speaking
country. This helped in the ease of communication between the Irish government and the foreign
corporations. Another factor that helped boost Ireland's overall economy was that the Irish
government passed a number of educational reforms which led to a significant number of educated
graduates that came out of Irish schools (Semeuls). In the 1990s and 2000s, Ireland became a highly
attractive country for international companies because it acted as an easy trade center within the
European Single Market. Therefore, the low corporate tax rates was not the only reason Ireland's
economy boomed, but also a combination of factors, which was very specific to the country of
Ireland and that could not be copied by other countries, all came together to

Income Tax Is The Most Significant Source Of Income
Income tax is the most significant source of income in Australia and is imposed at the federal level.
It is levied from three sources of the individuals: business income, capital gain and personal income.
The taxable income of an individual is assessed in calculated in an abroad sense after applying
allowable deductions against it. The report consists law relating to taxation applicability on funeral
income and trading stock. The applicable law has been explained and the relevant sections and case
law have also been discussed in the report. The connectivity between facts of questions and relevant
case laws has been included in the report for a better understanding.
Part A
Task (1)
Answer (a)
Facts of the case: The fee received by RIP Ltd. is payable under 30 days invoice and the income
through RIP Finance Pty Ltd who provide finance to the company is received under instalment
repayment plan. The other income is received through the funeral plan in which client make a timely
contribution to meet their funeral cost. In case the amount is not paid them time and completely, the
received amount is retained by the company.
Applicable Provisions:
As per section 6(5) of Income Tax assessment act, assessable income comprises income according to
ordinary concepts called ordinary income. In case a person is an Australian resident than the income
derived directly or indirectly from all the sources is included in assessable income (Barkoczy, 2016).
The facts of case Brent v FC of T71

The Argument Of Federal Progressive Income Tax
Legal Illusion
The arguments regarding federal progressive income tax has been represented to us through the
United States Supreme Court, on the floors of congress, and in media. The revenue from taxes
reached the objective of financing wars from the Civil War through World War II. At the same time
deteriorating the economy with fewer dollars that could be used on imports, exports, and services
(Henchman). Today, the United States deficit is $18,800,241,350,538.12 this is a grand total of
58,405.32 owed by every man, woman, and child (Brown). The legal illusion is presenting the
question, is income tax legal? There are Americans today who believe income tax is not legal and
stand by their beliefs in a movement that has cost many individuals considerably. I am interviewing
such a person, his name is Bobby Ray and the history he presented to me was interesting, and has
left me with more questions than answers.
Today, the federal government controls unrestricted means to execute whatsoever the elected official
desire, without reverence for the Constitution the aforementioned vanished gradually. Common
people are not knowledgeable that the United States in 1776, did not have personal income tax
sovereign, and in 1913; a perpetual income tax was inflicted upon the people. In actual fact, the
Constitution disallowed a direct income tax on there person. For longer than a century, the
leadership endured completely without proceeds from wages. Formerly, the U.S. government
performed

Philippines Income Tax Rates
Philippines Income Tax Rates
Income of residents in Philippines is taxed progressively up to 32%.
Philippines
Income Tax Rate 32%
Philippines
Corporate Tax Rate 30%
Philippines
Sales Tax / VAT Rate 12%
Taxable Income Tax Rate
PhP 0 – PhP 10,000: – 5%
PhP 10,000 – PhP 30,000: PhP 500 10%
PhP 30,000 – PhP 70,000: PhP 2,500 15%
PhP 70,000 – PhP 140,000: PhP 8,500 20%
PhP 140,000 – PhP 250,000: PhP 22,500 25%
PhP 250,000 – PhP 500,000: PhP 50,000 30%
Over PhP 500,000: PhP 125,000 ... Show more content on Helpwriting.net ...
Minimum wage earners (MWEs) are exempt from the payment of income tax on their taxable
income. Holiday pay, overtime pay, night shift differential pay and hazard pay received by such
MWEs also is exempt. However, an employee who receives/earns additional compensation, such as
commissions, honoraria, fringe benefits, benefits in excess of the non–taxable ceiling of PHP 30,000
taxable allowances and taxable income other than the exempt remuneration mentioned above do not
qualify as an MWE and, therefore, his/her entire earnings are not exempt from income tax. In lieu of
itemized deductions, an individual may elect to use the optional standard deduction (OSD), which
may not exceed 40% of the total gross income, in computing taxable income for the taxable
quarter/year. However, once an election is made to use the OSD, it is irrevocable for the taxable year
for which the return is made.
Capital gains – An individual is subject to capital gains tax on the sale of real property at a rate of
6% of the gross sales price or current fair market value, whichever is higher. An individual is also
subject to capital gains tax on the sale of shares not traded on the stock exchange at a rate of 5% of
the net gain not exceeding PHP 100,000, and 10% on the excess.

Trust Income Tax Return
Preparation of Trust Income Tax Returns– Why you need to know Fiduciary Accounting Income and
required to prepare Trust Income Tax Returns
Some accountants are confused or are unaware of the need to prepare work–papers in order to
prepare a proper, accurate and complete Trust Income Tax Return.
Fiduciary accounting income is trust income calculated on the provisions of the trust document and
applicable state Uniform and Principal and Income Act (The 1997 Uniform Principal and Income
Act is a common one)) Fiduciary accounting income determines the financial interests of the income
and remainder beneficiaries of the trust by classifying income, receipts and disbursements as
principal or income. The income may be distributed currently or ... Show more content on
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If DNI exceeds fiduciary accounting income, current distributions in excess of fiduciary accounting
income, even though charged to principal for fiduciary accounting purposes, may carry out taxable
income to the beneficiary of the trust. When DNI exceeds income, the trust may be taxed on the
excess, even though the trust distributed all its fiduciary accounting income. If DNI is less than
fiduciary accounting income, a portion of the distributions may be tax–free to the beneficiary.
When the trust document may distribute all or a portion of the income to be distributed currently, the
income reference is the fiduciary accounting income, not the taxable income. The trust is entitled to
an income tax deduction for distributions to beneficiaries subject to limitations. Thus, the fiduciary
accounting income impacts the income distribution, and accordingly an integral role in determining
the amount of income to be reported by the beneficiary on his or her income tax return.
Distributable Net Income (DNI) is calculated as follows:
Taxable Income
+ Income distribution deduction
+ Exemption

Tax Taxes And Income Taxes
Everyone gets frustrated with income taxes and everyone complains that they are paying more than
enough, but who really pays more in federal income taxes? Having a progressive tax system;
meaning that the more money you earn, the more you will have to pay in taxes; would lead to the
rich paying for most of the taxes and not the poor. Unfortunately, many people do not realize some
of the problems with the tax system itself that offsets the balance as well as the results when it
comes to taxes. There are many unseen things when looking at no more than just the statistics of
who pays the most in taxes. Anything from the tax rates, the difference between federal and
individual income taxes as well as state taxes can create a problem when ... Show more content on
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"Many taxes are regressive, meaning they take a larger share of income from poor and middle–
income families than they do from the rich." (2015, 3) Along with the federal income taxes,
Americans pay for state and local taxes also, seven states are excluded from the state taxes. Federal
income taxes take up the majority of what Americans pay in taxes, calculating for two–thirds of all
taxes paid by Americans. Altogether, forty – three states levy individual income taxes, forty – one
tax wage and salary income, two states specifically tax dividend and investment income while seven
states levy no state income taxes.
The seven states that have no state income taxes includes: Alaska, Florida, Nevada, South Dakota,
Texas, Washington and Wyoming. (Fact Check, [3]) Federal income tax and local sales taxes would
be the only source of taxes these states would need to pay. Unlike the federal income taxes, the state
taxes are regressive meaning that they take more income from low and middle–income families and
individuals rather than from the wealthy. Three of the most regressive states for state income taxes
are Washington as number one, Florida in second and Texas ranked number three with the low–
income families paying twelve and a half percent and the wealthy paying only three percent. Taxes
that are truly causing a problem would be the state income taxes, which are

Income Tax Chapter
Chapter 07
Individual Income Tax Computation and Tax Credits
True / False Questions 1.
Both the width (or range) of the tax brackets (the amount of income taxed at a particular rate) in the
tax rate schedules and the range of the tax rates in the tax rate schedules (the difference between the
lowest tax rate and the highest tax rate) vary by filing status. True False 2.
The tax rate schedules are set up to tax lower levels of income at higher tax rates than higher levels
of income. True False 3.
Tax rate schedules are provided for use by (relatively) higher income taxpayers while the tax tables
are provided for use by (relatively) lower income taxpayers. True False 4.
If a married couple has one primary ... Show more content on Helpwriting.net ...
Employees are not allowed to deduct FICA taxes they pay. True False 29.
Employees are allowed to deduct a portion of the FICA taxes they pay. True False 30.
Katlyn reported $300 of net income from her sole proprietorship. She is not required to pay self–
employment tax. True False 31.
All else equal, taxpayers are more likely to be classified as employees rather than independent
contractors if they are allowed to determine their own working hours and work without frequent
oversight. True False 32.
Tax credits reduce a taxpayer's taxable income dollar for dollar. True False 33.
The child tax credit is subject to phase–out based on the taxpayer's AGI. True False 34.
Parents may claim a child tax credit for a dependent child who is 22 years of age at the end of the
year if the child is a full–time student. True False 35.
Parents may claim a child and dependent care credit for expenses incurred in providing for their
dependents while the parents work as long as the children are over age 14 and under age 20 at year
end. True False 36.
John and Sally pay Janet (Sally's older sister) to watch John and Sally's child Dexter during the day.
Janet cares for Dexter in her home. John and Sally may claim a child and dependent care credit
based on the amount they pay Janet to care for Dexter. True False 37.
The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount
of

individual income taxes as well as state taxes can create a problem when ... Show more content on
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"Many taxes are regressive, meaning they take a larger share of income from poor and middle–
income families than they do from the rich." (2015, 3) Along with the federal income taxes,
Americans pay for state and local taxes also, seven states are excluded from the state taxes. Federal
income taxes take up the majority of what Americans pay in taxes, (accounting) for two–thirds of all
taxes paid by Americans. (All in all) forty – three states levy individual income taxes, forty – one tax
wage and salary income, two states exclusively tax dividend and investment income while seven
states levy no state income taxes.
The seven states that have no state income taxes includes: Alaska, Florida, Nevada, South Dakota,
Texas, Washington and Wyoming. (Fact Check, [3]) Federal income tax and local sales taxes would
be the only source of taxes these states would need to pay. Unlike the federal income taxes, the state
taxes are regressive meaning that they take more income from low and middle–income families and
individuals rather than from the wealthy. Three of the most regressive states for state income taxes
are Washington as number one, Florida in second and Texas ranked number three with the low–
income families paying twelve and a half percent and the wealthy paying only three percent. Taxes
that are truly causing a problem would be the state income taxes,

Texas Income Tax
The state of Texas should not adopt a personal income tax. Any legislator who would propose a bill
seeking to establish a state income tax would be seriously questioned, because a state income tax is
currently unconstitutional.
The Texas Constitution was amended in 1993, during Governor William P. Clements' second
administration, to prohibit a state income tax. Therefore, any such proposal would have serious
difficulties passing both chambers of the legislature and then it would be subject to ratification
through a statewide referendum. Texas' lack of a state income tax seems to have enhanced its
economy vitality with this approach. It also lacks a corporate income tax, which is not prohibited by
the Constitution. Texas is one of seven ... Show more content on Helpwriting.net ...
This could cut the local tax rate – in most school districts now around $1.50 per $100 of property
value for maintenance and operations (M&O) – to roughly 50 cents! The maximum M&O tax rate –
also now generally capped at $1.50 – must be reduced by the same percentage as total M&O taxes.
If the income tax cut the property tax rate by 65%, then it would also cut the tax cap by 65%. After
the cap was cut, only the voters in a school district could increase their district's maximum tax rate.
The Bullock Amendment then provides that the remaining one–third of income tax revenue could be
spent, but only on education. State income tax payments are deductible from taxable income in
calculating federal income taxes. Deductibility shifts part of the cost of public education to the
federal government. The above chart shows that, although the tax would have raised $16.4 billion in
2004, the net cost to Texas taxpayers would have been only $3.9 billion. Lower property taxes
would have returned most of the new revenue ($10.9 billion) to taxpayers. Uncle Sam would have
picked up 10% of the total cost of the income tax ($1.6 billion) through higher deductions on federal
tax

Tax and Gross Income
TEST 1
Correct Response
Indicate whether each of the items listed below would be included (A) in or excluded (B) from gross
income for the 2012 tax year. 1. Alimony | | 2. Lottery winnings | | 3. Life insurance proceeds
received upon the death of a family member | | 4. Child support payments | | 5. Reimbursement of
hospital expenses from a health insurance plan | | 6. Municipal bond interest | | 7. Unemployment
compensation | | 8. Scholarships for tuition and books | | 9. Wages | | 10. Farm income | | 11.
Inheritances | |
Which of the following amounts must be included in the gross income of the recipient? a. Welfare
payments | | | b. Royalties | | | c. Child support payments | | | d. Gifts | ... Show more content on
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a. True | | b. False | | |
Interest income received by a cash basis taxpayer is generally reported in the tax year it is received.
a. True | | b. False | | |
Interest on U.S. Treasury Bonds is not taxable. a. True | | b. False | | |
Taxpayers must report interest income on Series EE savings bonds as the interest accrues. a. True | |
b. False | | |
A gift received for opening a bank account is not taxable income to the recipient. a. True | | b. False |
| |
Child support payments are deductible by the spouse making the payments. a. True | | b. False | | |
If a divorce agreement executed in 2012 specifies that a portion of the amount of an alimony
payment is contingent upon the status of a child, that portion is considered to be a child support
payment. a. True | | b. False | | |
Correct Response eBook Problem 2–9
Alimony (LO 2.3)
Arlen is required by his divorce agreement to pay alimony of $2,000 a month and child support of
$2,000 a month to his ex–wife Jane. What is the tax treatment of these two payments for Arlen and
Jane?
Arlen is entitled to a deduction for .
Jane includes in her income .
Answers: only the alimony payments; only the alimony payments.
Alimony payments are deductible by the individual making the payments, and they are taxable
income to the person receiving the payments. For divorce agreements executed after 1984, alimony
payments must meet the following requirements:
1. The payments

Disadvantages Of Income Tax
An income tax is a rate charged on the income of individuals as well as business (companies or
other legal entities). Individual income taxes often tax the total earning of the individual, while
corporate tax often taxes net profit of the company. Different tax systems exist, with varying degrees
of tax incidence. Income taxation can be progressive, proportional or regressive. Tax systems define
income differently such as inclusion of windfall earnings, and often allow notional reductions of
income such as a reduction based on number of children supported.
Generally the income tax is employed in a progressive manner, meaning as one earns a higher salary
a higher proportion (percentage) of his income is taxed. The idea of a progressive income tax has
garnered support from economists and political scientists of many different ideologies, from Adam
Smith in The Wealth of Nations to Karl Marx in The Communist Manifesto. Income taxes used in
most countries around the world are characterized by a progressive scheme, but are not without
criticism.
The Disadvantages
The implementation of an income tax system is very complex, especially when trying to regulate the
rich and the corporations. So complicated in fact that an entire industry exists to simply monitor and
control the system. The government must enforce every line of the tax code, for example in the US
the IRS requires 90,000 tax accountants. The IRS and tax audit industry might do more for the
economy if they were retrained

Income Tax And Tax Rates
Income Tax
As the name implies income tax is a percentage of a person's income but it is not quite as simple as
the percentage changes depending on how much you earn on average in a year (See Figure 1) ergo if
you make more money you pay a larger amount of income tax, however most people get a 'Personal
Allowance' of £10,000 a year which you don't pay tax on therefore if you don't earn more than this
amount you aren't required to pay any form of income tax. There are certain forms of income which
you don't pay tax for example certain state benefits, interest on savings, rental income below £4,250
and premium bonds.
Percentage of income taken
Tax rate Taxable income above your Personal Allowance
Basic rate 20% £0 to £31,865
Higher rate ... Show more content on Helpwriting.net ...
The UK's corporate tax is slightly higher with Europe's average corporation tax which stands at
19.68% this fiscal year but is much lower than the North American average of 33.25% this fiscal
year and a Global average at 23.57% this fiscal year.
VAT
VAT is a form of tax which is taken from the majority of goods and services, as well as certain
goods imported into the UK outside the EU. VAT can be taken from both B2B and B2C transactions
carried out by a business and can reclaim the VAT paid for goods and services required for the
business. There are three rates of VAT, Standard (20%), Reduced (5%), Zero (0%) and certain are
exempt from VAT or aren't included in the UK VAT system. To be able to register to be able to use
VAT you must first pass the 'VAT threshold' which is currently £81,000, meaning your company
must have had a turnover at or above £81,000 to be eligible to apply. The rate of VAT changes over
time depending on the economic climate for example during 2008 VAT rates dropped to 15% and by
2010 they increased to 17.5% until 2011 when they raised to todays 20% rate. This change in VAT
rates can help to determine when a country is in the

Estate Income Tax Return Essay
Soon after receiving the plan to complete the Estate Income Tax Returns, I began to execute the
plan. As described in the article The Estate Income Tax Returns: The Plan to Complete the Returns,
the plan, in part, involved distributing the proceeds of the rental property sale and paying out tax
deductible expenses. However, before I could carry out my portion of the plan, I had to complete the
following important tasks:
Mail W–9 forms to a couple of beneficiaries not willing to give their social security number through
email or by phone.
Contact the two charities for their tax–id numbers.
Contact the attorney and tax professional for invoices.
So, once the requested information arrives, I could begin to execute the plan.
Execute the Plan
About a week after completing the important tasks, all the ... Show more content on Helpwriting.net
...
Finally, the estate was at the point where I could distribute estate property. Since the beneficiaries
weren't expecting much from the estate, they were about to receive an unexpected surprise.
However, I couldn't let the excitement affect the work that still remains.
The will provided for a twisted distribution formula and I had to get it right. So, I wrote a draft of
the distribution and had the attorney and tax professional look it over. They both approved of the
distribution and, at that point, I wrote out the checks. Along with the checks, I included a letter
explaining that this is the first distribution of three. The next distribution will distribute the last of
the estate property, and the third distribution was to close out what remains in the estate account. To
get the beneficiaries feeling giddy, I told them that the first distribution consisted of only the
proceeds from the sale of the rental property, which accounted for about a third of the estate value.
So, after reading this letter, I am sure the beneficiaries would feel pleasantly surprised. If not

Income Tax Hypothesis
To test the hypothesis of increasing income taxes causes people to find ways to avoid tax or causes
citizens to work less, ultimately reducing the tax rate can be tested at the national level, as well as,
the state level. In one state a higher income tax rate could cause people to work more, but when
increasing income taxes is tested at the national level the average might prove the opposite. In order
to test the effects of increasing income taxes I would suggest a data set that is aimed more at the
national level. The data set provided by the Internal Revenue Service has tax years from 1996 to
2013, ranging in different adjusted gross incomes of $0 to $10,000,000 or more. With the years
provided as well as the different income brackets the data shows how many people were a part of a
certain income level at one point of time and in another point of time when the tax rates can be
increased how many people switched income brackets. Variable such as GDP and the unemployment
rate could be factored in, which would allow a regression to be ran and then one could find out if the
increasing tax rates does reduce the tax rate at the national level. ... Show more content on
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The data set is provided by the United States Census Bureau and it breaks down income taxes as
well as individual income tax by different states. Why I think looking at the effects of increasing
income taxes at the state level is the certain states that might not have such a large population such
as Montana or Alaska might have more of an effect on the reduction in the tax rate, and the opposite
might prove true for states such as California, or Texas. The variables in these different states might
be different such as the unemployment rate in California might be higher than it is in Montana so
that might have more of an effect on the tax rate. In other words, to look at the whole one must look
at the pieces

The Importance Of Personal Income Tax In Texas
I think personal income tax in Texas should not become adopted; I feel it is an immoral thing
towards the state. I am against this because taxing a person from their personal income tax may
leave them with less money to pay their bills with more responsibilities. The personal income tax is
paid by people with the money they earn, and it sounds like a corrupted way of taking away their
hard earned wages. It may feel as though we pay personal income tax, but it is not included in our
income tax system. Many people still have to pay federal income tax, because it revenues them in
governing its share over three federal income taxes like; Social Security, Medicare and
Unemployment.
An Interviewer named Robert Higgs asked, Governor John Kasich his

US Income Tax Case Study
The United States enacted IRC 385 in 1969, which gave tax authorities the power to determine if
intercompany loans were, in substance, equity investments. The tax authorities believed then that
characterising intercompany loans as equity would resolve the thin capitalisation issue. If the IRS
could deem intercompany loans to be investments, it could treat the interest payments as dividends,
which are not tax deductible. However, the tax authorities eventually determined these tools were
inadequate. In 1989, Congress enacted (IRC) section 163(j) to address the concern of US earnings
being "stripped out" in the form of interest payments on debt by a U.S. subsidiary to its foreign
parent company. The concern was that the U.S. subsidiary would receive a U.S. tax deduction that
reduces its U.S. taxable income while the interest paid to the foreign–based parent corporation may
not be subject to U.S. withholding tax (or subject to a reduced rate) under various income tax
treaties.
The current U.S. earnings stripping rule limits the deductibility of "disqualified interest expense".
Interest expense paid with respect to a debt owed to or guaranteed by related parties is treated as
"disqualified interest expense" if such interest is not subject to U.S. withholding tax ... Show more
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Even if a debt–to–equity ratio exceeds 1.5 to 1, a U.S. corporation is allowed current deductions as
long as its cash flow is considered sufficient to service the existing debt level. Under the current
rules, a U.S. corporation is allowed to deduct all of its interest expense as long as the net interest
expense (interest expense minus interest income) does not exceed 50% of its adjusted taxable
income. Adjusted taxable income is determined by adjusting a corporation's taxable income for
certain non–cash items (e.g., depreciation) and it roughly equals that corporation's pre–interest cash

Alaska Income Tax
On September 24, 1980, former state Governor Jay Hammond signed into law a bill that meant no
more Alaska income tax. With the stroke of a pen, Alaska became the last state to abolish a state tax
on personal income. Now, 35–years later, Alaska is one of seven states that don't collect taxes on
earned income and the distant state's success speaks volumes about the benefits of reducing this type
of tax burden on residents.
Alaska–Not Always as Free
Alaska has a long history with state taxation; in 1949, the first state income tax became law, ten
years before they officially became a U.S. state on January 3, 1959. The first income tax regulations
were simple, but still heavily taxing on a state already burdened by the high costs of living.
Residents ... Show more content on Helpwriting.net ...
Embrace the Uncut Beauty
With no more Alaska income tax, the state is more appealing to potential residents and businesses,
which is important when you're as isolated as Alaska. Some may say the cold weather is a
deterrence. However, the state's unemployment rate was the lowest in the country from November
of 2008 until April of 2014. While everyone from the U.S. mainland struggled to find employment,
Alaska's residents weren't as unlucky.
The physical isolation and harsh climate of America's northernmost state drives inflation. Even
without an income or sales tax, Alaska still has the one of the highest cost of living in the country.
Despite the inflation on imports, the beauty residents see every day when they walk out their door
helps soften that blow. Alaska's residents don't need to hop on a plane, or book a week at an
expensive ski lodge because state parks that offer the best of the world's attractions free surround

Earned Income Tax Credit
Earned income tax credit: Who can file: EITC Income Limits, Maximum Credit Amounts and Tax
Law Updates | | Here are the 2010 tax year income limits, maximum EITC amount and the EITC–
related tax law changes. You can also access the information for: * Preview of 2011 Tax Year * 2009
Tax Year * 2008 Tax Year * 2007 Tax YearReturn to EITC Home Page2010 Tax YearEarned Income
and adjusted gross income (AGI) must each be less than: * $43,352 ($48,362 married filing jointly)
with three or more qualifying children * $40,363 ($45,373 married filing jointly) with two
qualifying children * $35,535 ($40,545 married filing jointly) with one qualifying child * $13,460
($18,470 married filing jointly) with no qualifying ... Show more content on Helpwriting.net ...
Who is a qualifying child?A4. Your child is a qualifying child if your child meets all of the
following tests: 1. Relationship 2. Age 3. ResidencyJoint ReturnRelationshipTo be your qualifying
child, a child must be your: * Son, daughter, stepchild, eligible foster child, adopted child or a
descendant (for example, your grandchild) of any of them, or * Brother, sister, half brother, half
sister, stepbrother, stepsister, or a descendant of any of them (for example, your niece or
nephew).Definitions to clarify the relationship test.Adopted child. An adopted child is always
treated as your own child. The term "adopted child" includes a child who was lawfully placed with
you for legal adoption.Eligible Foster Child. A person is your eligible foster child if the child is
placed with you by an authorized placement agency or by judgment, decree, or other order of any
court of competent jurisdiction.AgeYour child must be: 1. Under age 19 at the end of the year and
younger than you or your spouse if you file a joint return, 2. A full–time student under age 24 at the
end of the year and younger than you or your spouse if you file a joint return, or 3. Permanently and
totally disabled at any time during the year, regardless of age.Residency TestYour child must have
lived with you in the United States for more than half of the year.See Publications 596 and 501 for

Federal Income Tax Vs. Flat Tax
There has always been a large amount of discussion on the topic of the federal income tax.
Specifically, the discussions have revolved around how exactly the people should be taxed. There
are several ways in which tax rates can be determined, and all of them have some form of a strong
argument behind them. The flat tax is the best option as, by nature, it is the most fair. Tax rates are
measured by percentages, and when taxes are collected by percentages, the wealthy are already
paying more money than the poor. For example, if a flat tax rate of 20% is in place, and one person
has an annual income of $150,000 while another person has an annual income of $40,000. The
person who has the income of $150,000 is paying $30,000 in taxes while ... Show more content on
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This tax is called sin tax, and it is a tax that is levied on items that are considered hazardous and/or
unhealthy, such as cigarettes and alcohol. It is also proven that the lower class, specifically the
lowest quintile in the U.S., spends a higher percentage of their income on alcohol and tobacco than
the upper classes. This is most likely due to the fact that the poorer people actually purchase more
alcohol and tobacco than the average person in the higher classes. The cause of this is most probably
early formations of addictions, which quite possibly ruined careers. People who fall under this
category most likely became addicted to alcohol and/or tobacco early on in their lives, which put a
financial strain on them earlier on in their careers, or even before their careers even started, therefore
hindering their ability to move up in their jobs or find better

Corporate Tax And Corporate Income Tax
Introduction I believe that there should be corporate income tax, as it acts as a "user fee" for the
"special privileges" (Rosen, Ch 19) corporations receive. The corporate income tax is a separate tax
on corporate income, in which varies in a bracket between ten percent and thirty five percent. The
effective corporate income tax rate is estimated at thirty two percent, and eighteen percent for non–
corporations. Workers compensation, labor expenses, interest payments, and depreciation are tax
deductible from taxable income. Since corporations sell stock to stockholders, those stockholders
purchased a certain percentage of the corporation. In turn, purchasing a portion of the corporate
liability. If a stockholder accumulates income within the corporation in which he holds stock shares,
he reduces his tax liability. Although the shareholder's additional income would eventually be taxed,
his stock will grow at the before–tax rate of interest. This benefits the corporation and the
shareholders, as neither party holds the entire liability, nor do the shareholders pay debt if the
corporation is not generating profit. Corporate income tax also preserves the integrity of personal
income tax. I believe that there should be corporate income tax, as the lack–there–of could create
"potential opportunities for personal tax avoidance" (Rosen, Ch 19).
Corporate Income Tax Incidence The corporate income tax incidence is dependent on whether the
perspective is from the short, long, or

Income Tax In The United States
If you are a working American Citizen, you pay income tax. We are so used to the income tax that
we do not even look at that part of our pay checks anymore. When we discuss our pay with friends
or family we refer to it as our take–home pay not what we actually earn. Next time you receive a
paycheck stop and really look at the details. There is federal income tax, state income tax, and some
areas have local income tax. Do not forget about Social Security tax and Medicare. Now, imagine
that the income taxes were erased from your paycheck. That's a big difference, is it not? Actually
getting the money you earn. That is the reason I am an advocate of the Fair Tax Plan. We get to keep
the money we earn, the government still receives revenue, and ... Show more content on
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As tax time approaches, it's critical to understand which tax deductions are allowable for each
particular individual taxpayer. Basically, the IRS allows a deductions for business use of a home or
residence and it's your responsibility to know exactly what is an allowable IRS deduction and what
is not. You obviously cannot deduct your entire home for business because you live there so follow
the steps below to help you determine what portion of your home is used for business: Determine if
your home is actually being used for business by meeting 2 of the next 3 conditions: Determine if
most administrative and managerial tasks are done from the home. Determine if your home office is
a separate structure. Determine if you regularly meet clients and/or patients at your home in order to
conduct business. Determine which portion of your home is used for business. Divide the number of
square feet used for a home office or home based business by the total number of square feet in your
home. Working at a desk in your den or kitchen a few days a year isn't going to allow you to get the
home office deduction. If that same desk is used on a regular basis and only for business, well then
that may qualify. Determine which expenses are allowable as deductions: rent or mortgage, portion
of utility bills, travel expenses for business, computers used for business, etc. Check

Charitable Income Tax Case Study
He will get a charitable income tax deduction for the amount of the present value of the remainder
interest passing to charity which is $347,930 as per the above calculation in the year of donating
property, but it will be limited to 30% of his AGI with a carry over for the next five years to reduce
his future taxable income as the property that he distributed is a capital gain property. Since Mrs.
Rich is the only income beneficiary of the annuity amount, there is no taxable gift as it is protected
by the marital deduction . The remainder value of the trust is not subject to gift tax . Annuity income
received by Mrs. Rich is subject to tax in under tiered system and needs to be included in her gross
income. Tier 1– ordinary income to the

Income Tax
[pic]
| |
|IAS 12 INCOME TAXES |
|HISTORY OF IAS 12 |
|April 1978 |Exposure Draft E13 Accounting for Taxes on Income |
|July 1979 |IAS 12 Accounting for Taxes on Income |
|January 1989 |Exposure Draft E33 Accounting for Taxes on Income ... Show more content on
Helpwriting.net ...
[IAS 12.12] The benefit of a tax| |
|loss which can be carried back to recover current tax of a prior period should be recognised as an
asset. [IAS 12.13] | |
|Current tax assets and liabilities should be measured at the amount expected to be paid to
(recovered from) taxation | |
|authorities, using the rates/laws that have been enacted or substantively enacted by the balance
sheet date. [IAS 12.46] | |
|Recognition of Deferred Tax Liabilities | |
|The general principle in IAS 12 is that deferred tax liabilities should be recognised for all taxable
temporary differences.| |
|There are three exceptions to the requirement to recognise a deferred tax liability, as follows: [IAS
12.15] | |
|liabilities arising from initial recognition of goodwill for which amortisation is not deductible for
tax purposes; | |
|liabilities arising from the initial recognition of an asset/liability other than in a business
combination which, at the | |
|time of the transaction, does not affect either the accounting or the taxable profit; and | |
|liabilities arising from undistributed

Personal Income Tax Rate
PERSONAL INCOME TAX RATES Assessment Year 2010, 2011 and 2012 Chargeable Income |
Calculations (RM) | Rate % | Tax(RM) | 0–2500 | On the First 2,500 | 0 | 0 | 2,501–5,000 | Next
2,500 | 1 | 25 | 5,001–10,000 | On the First 5,000 Next 5,000 | 3 | 25 150 | 10,001–20,000 | On the
First 10,000 Next 10,000 | 3 | 175 300 | 20,001–35,000 | On the First 20,000 Next 15,000 | 7 | 475
1,050 | 35,001–50,000 | On the First 35,000 Next 15,000 | 12 | 1,525 1,800 | 50,001–70,000 | On the
First 50,000 Next 20,000 | 19 | 3,325 3,800 | 70,001–100,000 | On the First 70,000 Next 30,000 | 24 |
7,125 7,200 | Exceeding 100,000 | On the First 100,000 Next RM | 26 | 14,325 .......... | Assessment
Year 2009 ... Show more content on Helpwriting.net ...
Relief of up to RM10,000 a year for three consecutive years from the first year the interest is paid.
Subject to the following conditions:(i) the taxpayer is a Malaysian citizen and a resident; (ii) limited
to one residential unit; (iii) the sale and purchase agreement is signed between 10th March 2009 and
31st December 2010; and (iv) the residential property is not rented out. Where: (a) 2 or more
individuals are eligible to claim relief for the same property ; and (b) total interest expended by
those individuals exceeds the allowable amount for that year. Each individual is allowed an amount
of relief for each year based on the following formula: A x B C where; A = total interest allowable in
the relevant year; B =

The Income Tax Law : Australia
INCOME TAX LAW
Name:
MEHRAN MUZAFFAR
Candidate Number:
30111746
Professor:
SATHIASUNDAR VIJAYASANKAR
Date Due: 18 Sep 2014
PART A REQUIRED 1
Introduction
1. Income tax is generally payable annually by residents or non residents who are receiving income
in Australia provided the income was derived, earned or accrued while living in Australia. The
returns earned from a business operated partly in or out of the country i.e. Australia are considered
to have accrued in totality from Australia. All the income earned from investments, sale of personal
property or any other income is subject to taxation. (Renton, 2005)
The residents of Australia are basically ... Show more content on Helpwriting.net ...
The income tax assessment ruling IT 2650 of permanent place determination which is also related to
case IT 2607under the ATO ID 200/179 puts more emphasis on the place of resident.
It defines a resident as a person who is domiciled in Australia unless the commissioner is convinced
and satisfied that the permanent place is not Australia as was illustrated in the case of Henderson v
Henderson (1965) 1 All E.R.179.
James Cookie works for a foreign company that has been registered in Bermuda that owns and
operates passenger cruises across the Pacific Ocean. He owns a house that he inherited from his
parents in Sydney, Australia. By virtue of his inheritance and parentage he is an Australian citizen.
But he has rented the family house to his relatives who live in the house but the furniture and one of
the rooms belongs to him. In the current year he spent only eighty days in the house while most of
the other days he was away. For tax purposes he will be considered as a resident as he has no other
permanent home even though the company he works for is foreign based. All his income will be
subjected to taxation in Australia

Income Tax : Tax And Tax Essay
Income tax Liability method is used to executive the income tax process for a transportation
company. The deferred tax assets and liabilities are being accomplished for upcoming tax
consequences. It is attributed to distinct financial statement carrying values of current assets and
liabilities and respective tax basis as well as operating loss as well tax credit could be carried
forward. The temporary differences or expected to be settled or recovered by using enacted tax rates
and being measured in deferred tax assets and liabilities to comply taxable income in the years. The
changes on deferred tax assets and liabilities were effected in tax rates, which would be
accomplished as income, or expense includes enactment date at the time of period. Valuation
allowances for deferred tax assets are recorded to the extent which these assets not be realized by
reversal of current taxable of difference or forecasted taxable income or tax planning strategy. In the
console interest and penalties of uncertain tax, positions are derived as interest expense upon audit
and record a liability for unrecognized tax benefits are considered to be unsustainable when the
benefits of tax positions obtained on tax returns. IDENTIFICATION AND ANALYSIS OF
EXISTING ORGANIZATION STRATEGY: Business development: Hunt followed Paul Bergant
and bought 24 trucks and Interstate Commerce Commission license covering 33 states to expand his
business. Later, Bergant has become the chief legal counsel and the

Income Tax And Its Effect On Total Income
Income tax brings a total revenue of nearly $160 billion. It's the largest source of revenue from tax
with a percentage of 47.1% of total tax revenue is taken up by income tax. However questions must
be asked about what if the income tax is changed. The three issues which follow this change are as
follows:
Increasing income tax– effects on total revenue/ tax take
Decreasing the income tax– effect on fairness, equity and revenue
Tax mix– if income tax is increased/ decreased what needs to be decreased/increased
Income level – $ Amount of tax
0–18,200 $0
18,201– 37,000 19 cents for each $ over $18,200
37,001– 80,000 $3,572 + 32.5 cents for every $ over $37,000
80,001– 180,00 $17,547 + 37 cents for every $ over $80,000
180,001 + $54,547 + 45 cents for every $ over $180,000
Under the Howard government in 2003 there was a major economic booms which lead to high
exporting from Australia, including Iron ore and coal. As a result of the economic boom the
corporation tax increased dramatically. The effect of this was for John Howard to decrease the
income tax on five occasions and superannuation concessions were extended. This was John
Howard's gift to the taxpaying middle and upper classes. It was clearly a response – perhaps
understandable – to the export boom. The trouble was it had the effect of increasing budget deficits
in later years when tax revenues declined. In particular, budget deficits in the Labor (Gillard) years
were increased by Howard's Gift. Even now it has

Federal Tax And Federal Income Tax
To most, the term federal income tax is just paying the government or money they don't get. But in
government and the world of finance, it is major and involved idea which involves a great deal of
focus and discussion. The United States' federal income tax is a complex system which is a
necessary function of the government. A taxable amount is determined on income, and it creates
taxation for the government to accumulate money. There are many factors that play into the
complexity of the system which developed the processes of the federal income tax today.
Understanding this financial system requires a level of insight into the layers of information that the
federal income tax entails. Taxation in America has always been a huge factor of societal and
governmental focus. The nation started with a hatred for taxes dating back to the tax burden placed
on the American colonies by Great Britain. Early in its history, America had few very few taxes.
However, it became the major source of revenue for the United States government. The War of 1812
created a higher need for taxation, and initiated the nation 's first sales taxes which were placed on
gold, silverware, jewelry, and watches. But in 1817 the internal taxes were repealed, and the
government relied on tariffs on imported goods for funds. Once again, the onset of war generated a
necessity of greater revenue, and in 1862, during the civil war, the nation's first income tax was
enacted. This income tax was the foundation to

Higher Income Tax
Rich People should not have to pay more taxes. They pay higher income tax, they should not be
punished for doing well financially, and when tax rates increase rich people flee.
One of the reasons why they should not pay more taxes is they already pay higher income tax. In
America the top 3,000 people pay more income tax than the bottom 9 million people.(Wilmers 1).
Also, the top 20% of households account for 51% of all income but pay 68% of all federal taxes.
(Sivy 1). If the top 3,000 people are already paying higher income tax then why should they be
taxed more for other things. If only 20% account for it then why are we raising tax on the rich for
that problem.
They should also not be punished for doing well financially. Owners of properties worth over 2
million dollars would face a charge or rise in tax from 700 million to 1.7 billion dollars.(Ojalvo, 2).
Also, 46% of adults pay no federal tax.(Sivy, 2). They could face that charge but why because they
are doing well and own a new house that would mean even more money than they already pay. And
if 46% pay none of the tax than why should rich people should have pay for it. ... Show more
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However, when tax rates increase rich people flee. When Francois Hollande planned temporary
supertax happend french actor Gerard Depardieu fled to Belgium to avoid paying the tax.(Wilmers
2). When the tax increase the rich flee so they don't have to pay for it.
Therefore, rich people should not have to pay more taxes. Because they pay more income tax, They
should not be punished for doing well financially, When tax rates increase rich people flee. So rich
people should not have to pay more

Federal Income Tax, State Tax And Property Tax
The concept behind federal income tax, state tax, and property tax is........
The ratification of the sixteenth amendment to the constitution established the federal income tax.
The federal income tax is a tax the United States government collects on the wages and income an
individual may earn in a year. Each year federal income taxes are collected from millions of
Americans based on a progressive taxing formula. The progressive structure of the formula is
designed to ensure that each individual no matter their income, pays what is considered a fair
taxation rate. If an individual earns more, more taxes are levied against the earned wages and
income.
States tax their citizens in a similar fashion as the federal government. However, the income tax
rates or percentages at the state level are much lower. States also employ a tax that the federal
government does not have. This tax is called a sales tax. The tax on goods and services such as
clothing, automobiles and dining in at a restaurant is regressive. No matter what the income of an
individual, the tax remains the same, unlike a progressive system. There are many states that do not
have an income tax. These states get a large proportion of their revenue from sales taxes. States such
as California, New York, and Massachusetts, have some of the highest state income tax and sales
taxes in the United States. ... Show more content on Helpwriting.net ...
A county in Texas cannot tax a property in Nevada. The federal government does not levy property
taxes, some states do, and all local counties and municipalities do. Homes, land, and buildings are
considered property. Not every individual owns property so not everyone pays property

Penalized Income Tax
This paper encapsulates the loopholes and put forwards few strategies that are important for raising
fund in the state of Illinois and thus supporting the low–income individuals. The paper proposes the
steps that need to be taken in order to increase revenue and how to invest more in the human capital
as to flourish and improve the society.
INTRODUCTION Education is the most critical factor and important decision for any country and
state. Educated individuals make up the country and the state. Therefore; state of Illinois has also
some education related reforms and constitutions in order to help its individuals gain access to
education. The state of Illinois has been unsuccessful in forcing tax duty in a way that relates ...
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All uncommon sponsorships should be finished instantly – the answer for Illinois' subsidizing issues
isn't about tweaking the equations and making fixes so that political power between various locales
in the state can be incidentally leveled. To settle Illinois' broken instruction framework, money
related influence should be detracted from government officials and extraordinary premiums. For
whatever length of time that they coordinate the framework, it won't be about responsibility – it will
be about finances and how we control and distribute our finances. The main genuine arrangement is
to move to another instruction subsidizing framework – one that gives parents expanding control
over the stream and conveyance of cash. Illinois doesn't have to begin without any preparation.
Choices as of now exist and have demonstrated successful in different states the

Income Tax Essay
TITLE PAGE INCOME TAX Assessment – Report writing NAME: xxxx xxxx STUDENT
NUMBER: xxxxxx HND Accounting TUTOR: xxxx xxxx
DATE: April 2012
ACKNOWLEDGEMENTS.
I would like to thank my tutor, xxxx xxxx for the valuable advice and support given to me to enable
me to write my report.
INTRODUCTION.
The purpose of this report is to fully evaluate Katy's situation by providing detailed information
about the different issues regarding employment and self–employment to enable her to determine
her employment status.
Question 1
Employment and Self–employment
It is highly important to establish a person's employment status. The key test to be applied when
trying to determine a taxpayer's status is concerned with the nature of ... Show more content on
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Question 2
Income tax assessments are computed for a tax year of assessment. They are based on a taxpayer's
total income for the year from all sources and it does not include income exempt from income tax.
Taxable Persons
Persons resident in the UK for a tax year are charged to income tax on their total income for that
year (includes both income arising in the UK and income arising overseas). There are two
exceptions to the rule; some forms of income are fully exempt from income tax; and UK residents
whose permanent home is not in the UK may claim that the income they make overseas should be
subject to UK income tax only to the extent that the income is remitted to the UK. Non–UK
residents are allowed to pay income tax on only their UK income. Income tax is payable by: *
Adults, on their own income and on their share of partnership income * Children, if they have
sufficient income to pay tax * Trustees, on the income of a trust or settlement * Personal
representatives, on income arising from the estate of a deceased person.
Some individuals and organisations are generally exempt from income tax subject to various
restrictions and exemptions. They include: * Companies (pay corporation tax) * Registered charities
and scientific research associations, except on trading income * Registered pension schemes *
Representatives of foreign countries (ambassadors) * Visiting members of foreign

individual income taxes as well as state taxes can create a problem when getting to the bottom of
who really pays the most taxes. Government Aided benefits and even untaxed amounts take their
part in income taxes because they do make a difference on someone 's income which can alter the
amount they will then owe in taxes. Although there are many ups and downs when it comes to
income taxes, one of the biggest issues is that the rich are not paying nearly enough. In the United
States, our tax system, has been designed to be progressive, sadly due to the facts that are usually
looked at, causing unnecessary "top–heavy tax cuts," (12) other taxes like state and local taxes are
ignored. Obviously there will be a problem trying to get an exact definition as to who pays the most
in taxes, the wealthy or the poor. So

History of Income Tax
Income tax is a vital source of funds to any government. Money raised by taxing the working
population can be used to fund infrastructure development as well as improving the standard of
living in the country. United Kingdom was the first the country to establish a working income tax on
its civilians in 1799. Initially implemented as a temporary source of income to fund the war to beat
Napoleon, income tax is now an essential source of revenue for the government all over the world.
This report will look at the significance of income tax in the UK since the late 18th century, through
World War 1 and World War 2, and how it has evolved into the tax system, currently in practice.
Income tax still remains as a temporary tax, and must be ... Show more content on Helpwriting.net
...
Even though Sir Robert Peel was not in favour of income tax, he introduced income tax again in his
Budget of 1842 that was considered to be one of the most famous in the 19th century. Peel taxed
people earning above £150, this resulted in favour of the less wealthy people. Also under custom
duties there were 1200 articles, of which Peel reduced 750 articles on his budget. His taxation plan
was on action for a period of three years. But it was extended for another two years due to an
increase in the national expenditure, and also to help the national railways because the railway
industry had less money. When cheaper imports were available, Corn Laws were created which is a
tariff on imports. This helped the local farmers as they had a competitive advantage, but Peel
repealed the Corn Laws. This made him loose support of his party. William Galdstone and Benjamin
Disraeli had complete authority during the second half of the 19th century. From the year 1853 to
1866, William Gladstone was elected as the Chancellor of the Exchequer. Gladstone did not follow
Peel's method of income tax policy; instead he wanted to terminate it. He also believed that
government spending should be kept to a minimum level. Gladstone reduced the income tax
exemptions from £150 to £100; he thought that if more people pay then there would be a huge
pressure form the public to repeal the tax. But in order to fund the Crimean war, Gladstone

Progressive Income Tax
In America, we enjoy freedoms that we often take for granted. We have the power to decide things
for ourselves, such as our leaders, our rights, and our liberties. We have the ability to debate and
evaluate the effectiveness and the relevance of a law or bill, and we must use this power when it
comes to the methods of taxation. Currently, the US uses a progressive income tax as its means to
raise revenue. Deborah Lee and Richard A. Grant, in "Counterpoint: Expanding Sales Taxes Helps
the Rich, Hurts the Poor," believe that a progressive income tax is the fairest and most constructive
ways to fund the government, and that such a tax benefits the poor more than a sales tax. Lee and
Grant start their argument with wisdom, declaring that government must have a way to tax their
citizens. Political establishments must have funds to protect, serve, and govern their people. This is
the way it has been since the beginning of time. Politicians often use tax code as a background for
their campaign, promising major changes. In order to determine the best ... Show more content on
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They use figures to show to separate families of differing incomes. One has an income $12,000 and
another has an income $120,000. Next, they estimate a cost of living at $600 and $48 in taxes from a
state with an 8 percent sales tax. The low–income family pays "4.8 percent of their income" and the
high–income family pays "less than one–half of one percent of their income." The point they are
trying to make is that a sales tax hurts the poor, and a progressive income tax does not burden the
poor. However, progressive income taxes might look like a good solution but they have hidden
consequences. Companies have to pay large amounts of money due to the income tax and they put
that hidden burden on their customers, driving prices up to cover the big business taxes. When the
poverty stricken buy something they are really paying the high business

Corporate and Personal Income Tax Fraud
Corporate and personal income tax fraud is not a new phenomenon; it is a part of day to day
business in the global economy. Where there is worship of money there seems to be fraud in one
form or another. China is no different than any other country on this planet; it has honest
corporations and dishonest ones also. China is listed as number 8 on the top 10 countries for tax
fraud (Berr, 2011). United States is still listed as number one and Canada not even in the top 20.
Hong Kong is listed as four as "The ten Biggest Tax Havens within the World" (Said, 2013).
i. Corporate Income Tax / Evasion
As recently as January the 25th of 2014, the mainland's tax commissioner, Wang Jun, says
international co–operation to combat tax fraud and evasion will be stepped up according to the
South China Morning Post (Shih, 2014). China would fulfil its responsibilities as a big nation in
international tax initiatives, while using international co–operation to reform its tax system, Wang
said at an Organisation for Economic Co–operation and Development (OECD) taxation forum in
Paris this week. (Shih, 2014). Fatca, which will take effect on July 1, requires foreign financial
institutions to report to the US government information about American taxpayers or foreign firms
in which US taxpayers hold substantial ownership.
In 2012 Beijing recovered taxes worth US $5.7 billion, 30 times the amount in 2008, the tax
administration said.
It has reported four cases of tax fraud on the mainland in

Income Tax Refund
Income tax refund may take longer this year
Many people in the city did not receive their income tax refund amount, and they are unable to find
the reason.
The income tax administrator said that there are two reasons why the taxpayers did not receive their
tax refund. There are many taxpayers who are still working on their income tax return form, the
manual filling of the income tax form take more time than the e–filling. The other reason is, the
income tax officers are examining the tax forms that claim more refund amount.
The income tax administrator, John Schaut said that the analysis of the income tax forms for this
year takes longer time because many taxpayers claimed for higher dollar refunds. And the officers
from the income tax department

Accounting For Income Tax

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