This document provides learning objectives and content about individual income tax computation and tax credits. It covers determining regular and alternative minimum tax liability, computing employment and self-employment taxes, describing types of tax credits including refundable and nonrefundable personal and business credits, and explaining taxpayer filing requirements and penalties. Examples are provided to illustrate concepts like kiddie tax, education credits, and late payment penalties.
Tips to help you complete Form DS-260, the U.S. Immigrant visa application form.
This SlideShare presentation covers
1) How to get started
2) How to update your Form DS-260/retrieve your DS-260 confirmation page
3) How to resolve a technical issue
4) What to do if you are unsure how to answer a particular question
Tips to help you complete Form DS-260, the U.S. Immigrant visa application form.
This SlideShare presentation covers
1) How to get started
2) How to update your Form DS-260/retrieve your DS-260 confirmation page
3) How to resolve a technical issue
4) What to do if you are unsure how to answer a particular question
Taxation 101 basic rules and principles in philippine taxation by jr lopez go...JR Lopez Gonzales
This was the informative speech on the basic taxation principles in the Philippines. It was a thirty-minute speech on the basics of the Philippine Tax system presented to the students of the Mindanao State University - Iligan Institute of Technology on 8 August 2011 for the Political Science 2 Lecture Series. The document was uploaded by JR Lopez Gonzales of www.politikalon.blogspot.com.
Phuong - Taxation in the UK - Chapter 9 - The personal tax computationPhuong Nguyen
Going along with this presentation is the instruction for self-learning, hihi, but in Vietnamese :D
Hope it would be helpful for you in this quite boring subject ^^
(Please read comments from the bottom to the top)
Thanks to Ulster Savings Bank for hosting this event, guest speaker Jonathan Gudema of Planned Giving Advisors and to all of our participants for joining us to learn more about the impact of the new tax law on charitable giving.
Taxation 101 basic rules and principles in philippine taxation by jr lopez go...JR Lopez Gonzales
This was the informative speech on the basic taxation principles in the Philippines. It was a thirty-minute speech on the basics of the Philippine Tax system presented to the students of the Mindanao State University - Iligan Institute of Technology on 8 August 2011 for the Political Science 2 Lecture Series. The document was uploaded by JR Lopez Gonzales of www.politikalon.blogspot.com.
Phuong - Taxation in the UK - Chapter 9 - The personal tax computationPhuong Nguyen
Going along with this presentation is the instruction for self-learning, hihi, but in Vietnamese :D
Hope it would be helpful for you in this quite boring subject ^^
(Please read comments from the bottom to the top)
Thanks to Ulster Savings Bank for hosting this event, guest speaker Jonathan Gudema of Planned Giving Advisors and to all of our participants for joining us to learn more about the impact of the new tax law on charitable giving.
ACCT323 Final exam1.Which of the following represents .docxannetnash8266
ACCT323 Final exam
1.
Which of the following represents the largest percentage of state tax revenue?
Sales tax
Individual income tax
Other
Property tax
None of these
2.
Congress recently approved a new, bigger budget for the IRS. What taxation concept evaluates the cost of administering our tax law?
Convenience
Economy
Certainty
Equity
None of these
3.
The city of Granby, Colorado recently enacted a 1.5% surcharge on vacation cabin rentals that will help pay for the city's new elementary school. This surcharge is an example of _______.
A sin tax to discourage undesirable behavior
A government fine
An earmarked tax
Both A and C
None of these
4.
If Susie earns $750,000 in taxable income, how much tax will she pay as a single taxpayer for year 2012?
$231,639.50
$262,500.00
$239,261.00
$236,435.00
None of these
5.
Which of the following is not considered a primary authority?
Tax Court case.
Regulation.
Revenue Ruling.
Tax service.
None of these.
6.
Which of the following is not a factor that determines whether a taxpayer is required to file a tax return?
rev: 03_21_2013_QC_28372
Filing status.
Taxpayer's gross income.
Taxpayer's occupation.
Taxpayer's age.
None of these.
7
.
Corporations are required to file a tax return only if their taxable income is greater than:
$0.
$1,000.
$600.
$750.
None of these. Corporations are always required to file a tax return.
8.
Lavonda discovered that the U.S. Circuit Court of Appeals for the Federal Circuit has recently issued a favorable opinion with respect to an issue that she is going to litigate with the IRS. Lavonda should choose which of the following trial courts to hear her case:
Tax Court only.
U.S. Court of Federal Claims only.
U.S. District Court only.
Tax Court or the U.S. District Court.
Tax Court or the U.S. Court of Federal Claims.
9.
Jason's employer pays year-end bonuses each year on December 31. Jason, a cash basis taxpayer, would prefer to not pay tax on his bonus this year (and actually would prefer his daughter to pay tax on the bonus). So, he leaves town on December 31, 2011 and has his daughter, Julie, pick up his check on January 2nd, 2012. Who reports the income and when?
Julie in 2011
Julie in 2012
Jason in 2011
Jason in 2012
None of these
Top of Form
10.
Investing in municipal bonds to avoid paying tax on interest earned and to earn a higher after-tax yield is an example of:
conversion
tax evasion
timing
income shifting
None of these
Bottom of Form
11.
Which of the following increases the benefits of income deferral?
increasing tax rates
smaller after-tax rate of return
larger after-tax rate of return
smaller magnitude of transactions
None of these
12.
Which of the following is an example of the timing strategy?
A corporation paying its shareholders a $20,000 dividend
A parent employing her child in the family business
A taxpayer gifting stock to his children
A cash-basis busi.
Read through these slides if you want to learn:
1. How to boost your take home pay
2. How to choose the right tax filing status
3. That there's no escaping Uncle Sam on earned income
4. The standard deduction may be enough
5. All earned income is not taxed equally
6. How to take advantage of the child tax and dependent care tax credits
7. Don’t forget incentives designed to offset higher education costs
8. Financial literacy resources are at your fingertips
-
PRA Group's Damon DeSue presented these '8 tips to know about taxes" at West Virginia University's financial literacy event.
2016 tax review hints and changes, including PEASE and PEP Limitation, Alternative Minimum Tax (AMT), donations of appreciated capital gain property, qualified charitable distributions, ELOI contracts, net investment income tax (NIIT), Kiddie Tax rates and qualifications, family limited partnerships, tax reform, and the "death tax" provided by a certified CPA.
You pay self-employment (SE) tax when net earnings from
self-employment are $400 or more. You are self-employed
if you carry on a trade or business as a sole proprietor (including
farmers) or as a general partner in a partnership.
A trade or business generally is an activity carried on for
a livelihood or in good faith to make a profit. Facts and circumstances
determine whether or not an activity is a trade
or business.
Debt Relief For Small Businesses- Requirements for Your Loan Application – CO...Sylvie Luanghy
Since most banks are not yet ready to start accepting loan applications for the SBA Paycheck Protection Program, I decided to do some research on the program and put a quick PowerPoint overview for those who still lack information on the program eligibility requirements.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
Introduction to AI for Nonprofits with Tapp NetworkTechSoup
Dive into the world of AI! Experts Jon Hill and Tareq Monaur will guide you through AI's role in enhancing nonprofit websites and basic marketing strategies, making it easy to understand and apply.
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
2. Learning Objectives
1. Determine a taxpayer’s regular tax liability and
identify tax issues associated with the process.
2. Compute a taxpayer’s alternative minimum tax
liability and describe the tax characteristics of
taxpayers most likely to owe the alternative
minimum tax.
3. Calculate a taxpayer’s employment and self-
employment taxes payable and explain tax
considerations relating to whether a taxpayer is
considered to be an employee or a self-employed
independent contractor.
7-2
3. Learning Objectives (cont’d)
4. Describe the different general types of tax credits,
identify specific tax credits, and compute a
taxpayer’s allowable child tax credit, child and
dependent care credit, earned income credit,
American opportunity credit, lifetime learning
credit, and earned income credit.
5. Explain taxpayer filing and tax payment
requirements and describe in general terms how to
compute a taxpayer’s underpayment, late filing,
and late payment penalties.
7-3
4. Federal Income Tax Computation
Regular tax computation dependent upon:
Filing status
Married filing jointly
Qualifying widow or widower (also called Surviving
spouse)
Married filing separately
Head of household
Single
Progressive tax rates
Tax rate schedules
Tax tables
7-4
5. Federal Income Tax Computation
Tax brackets or marginal tax rates on
ordinary income
10%, 15%, 25%, 28%, 33%, 35%, and 39.6%
Marriage penalty or benefit
Who is likely to have penalty?
Both spouses receive income
Who is likely to have benefit?
One spouse receives income
7-5
6. Federal Income Tax Computation
Exceptions to ordinary tax rates
Long-term capital gains (net capital gains)
Generally 0%,15%, or 20%, but can be as high as
28%
Two different tax rates on one gain is possible
Dividends
Qualified dividends generally taxed at 0%,15%, or
20%
Two different tax rates on one dividend is possible
7-6
7. Tax Computation Example
Assume that Gram’s taxable income is $36,750
including $4,000 of qualifying dividends taxed
at the preferential rate. What would be Gram’s
tax liability on her income under these
circumstances?
7-7
9. Medicare Contribution Tax
3.8% tax imposed on lesser of:
Net investment income (e.g., interest, dividends,
annuities, royalties, rents, passive activity income,
net gains from disposing of property, less related
allowed deductions) or
Excess of modified AGI over $250,000 (MFJ),
$125,000 (MFS), and $200,000 (all others)
7-9
10. Federal Income Tax Computation
Kiddie tax
Net unearned income taxed at parents’ marginal rate
Net unearned income = unearned income in excess of
$2,000
Parents can elect to actually include this income on their
tax return.
Applies if
Child is under age 18 at year end,
Child is 18 at year end but earned income not greater than
half of child’s support, or
Child is over age 18 but under age 24, is a full-time student,
and child’s earned income not greater than half of child’s
support.
7-10
11. Kiddie Tax Example
Suppose that during 2013, Deron received
$1,100 in interest from an IBM bond, and he
received another $2,100 in interest income
from a money market account that his parents
have been contributing to over the years. What
is Deron’s taxable income and corresponding
tax liability? (Deron’s mother Courtney is
subject to a 25% marginal tax rate.)
7-11
12. Kiddie Tax Example Solution
Because Deron is younger than 18 years of
age at the end of the year and his net unearned
income exceeds $2,000, he is potentially
subject to the kiddie tax.
7-12
15. Alternative Minimum Tax
Items commonly added back to regular taxable
income in computing AMT income
Personal and dependency exemptions
State income taxes
Real property taxes
Home-equity loan interest expense (if proceeds not
used to improve home)
Miscellaneous itemized deductions in excess of 2%
floor
7-15
17. Alternative Minimum Tax
AMT is a tax based on an alternative more
inclusive tax base than regular taxable income.
Meant to ensure that taxpayers are paying some
minimum level of tax.
Who is most likely to pay it and why?
High state taxes
Multiple children
Capital gains
7-17
18. Alternative Minimum Tax
Why is it becoming so prevalent?
Exemption phase-out threshold not indexed for
inflation
Individual tax rates have decreased since AMT
enacted
AMT rates 26% or 28% vs. individual ordinary
rates 10%, 15%, 25%, 28%, 33%, 35%, 39.6%
7-18
19. Employment FICA Taxes
Employee
Must pay FICA taxes on compensation from employer
(6.2 % Social Security tax rate; 1.45% to 2.35%
Medicare tax rate)
$113,700 limit applies to Social Security portion
Multiple employers during year
Employer
Pays FICA tax on employee’s compensation (6.2%
Social Security tax rate; 1.45% Medicare tax rate)
& withholds FICA tax from employee’s pay check
7-19
20. Employment and Self-
Employment Taxes
Self-employed taxpayers
Responsible for entire FICA tax (employee and
employer share)
Tax base is net earnings from self-employment
(net Schedule C income (generally) and multiply
by .9235)
Same $113,700 limit applies to Social Security
portion
7-20
21. Employment and Self-
Employment Taxes
If net earnings from self-employment < $400,
no SE tax.
How does $113,700 Social Security earnings
limit apply when have both wages and SE
earnings in the same year?
Wages use up limit first– taxpayer favorable or
unfavorable? Why?
7-21
22. Employment and Self-
Employment Taxes Example
Assume that Courtney received $100,000 of
taxable compensation from EWD in 2013, and
she received $180,000 in self-employment
income from her weekend consulting activities.
What amount of self-employment taxes is
Courtney required to pay on her $180,000 of
business income?
7-22
24. Employee vs. Independent
Contractor
Determining whether taxpayer is employee or
independent contractor
Primary question: who has control over how, when,
where work is performed?
Tax differences
Amount of FICA or SE taxes payable
Deductibility of expenses
For AGI
From AGI
Employer portion of self-employment taxes
7-24
25. Tax Credits
Reduce tax liability dollar for dollar
Consist of three categories
Nonrefundable personal
Refundable personal
Business
7-25
26. Nonrefundable Personal
Child tax credit
$1,000 for each qualifying child under age 17 at end of year
Partially refundable in certain situations
Phase-out amount not percentage
Child and Dependent care credit
Dependent under age of 13 (or disabled dependent)
Percentage of qualifying expenditures
Maximum qualifying expenditures: $3,000 one qualifying
person, $6,000 two or more qualifying persons
Percentage depends on AGI (see Exhibit 7-9)
7-26
28. Nonrefundable Personal
American opportunity credit (formerly Hope
scholarship credit)
For first four years of post-secondary education
For eligible expenses and institutions only
Applied per student
Taxpayer, spouse, taxpayer’s dependents
Amounts paid by dependents treated as paid by taxpayer
100% of first $2,000 of eligible expenses and 25% of next
$2,000 (maximum credit is $2,500)
Phase-out based on AGI
40% of credit is refundable
7-28
29. American Opportunity Credit
Example
Courtney paid $2,000 of tuition and $300 for
books for Ellen to attend the University of
Missouri–Kansas City during the summer at the
end of her freshman year. What is the
maximum American opportunity credit (before
phase-out) Courtney may claim for these
expenses?
7-29
30. American Opportunity Credit
Example Solution
Answer: $2,075.
Because the cost of tuition and books are
eligible expenses, Courtney may claim a
maximum American opportunity credit before
phase-out of $2,075 [($2,000 × 100%) +
($2,300 - $2,000) × 25%].
7-30
31. American Opportunity Credit
Example
Assuming Courtney qualifies for a $2,075
American opportunity credit, she is married
filing jointly, and her AGI is $162,000, what
amount of American opportunity credit would
she be allowed to claim after phase-out?
7-31
33. Nonrefundable Personal
Lifetime learning credit
Eligible expenses (tuition) for post-secondary
education
Includes professional or graduate school
Includes continuing education
Applied per taxpayer
MFJ return is one taxpayer
20% of up to $10,000 of eligible expenses
Phase-out based on AGI
7-33
34. Nonrefundable Personal
Education credits
If deduct for AGI educational expenses for
someone, no education credit allowed for that
person
Could take American opportunity credit for one
dependent and for AGI deduction for another
7-34
35. Refundable Personal
Earned income credit
Negative income tax
Must have earned income
Must have at least one qualifying child or must be
at least 25 years old and less than 65 and not a
dependent of another
See Exhibit 7-10
7-35
37. Tax Credits
Business credits
Promote certain behaviors
If credit exceeds tax, carry back one year and
carry forward 20 years
Foreign tax credit
Hybrid business and personal – nonrefundable; carry
back one year and carry forward 10 years
7-37
39. Prepayments and Filing Requirements
Taxes must be paid-as-you-go
Withholdings
Treated as made equally throughout the year
Estimated tax payments
Due on April 15th
, June 15th
, September 15th
, and
January 15th
of the following year
7-39
40. Prepayments and Filing Requirements
Underpayment penalties
Safe-harbor requirements
90% of current tax liability or
100% of previous year’s tax liability (110% with
higher AGI > $150,000) – 25% at each estimated
filing deadline
7-40
41. Prepayments and Filing Requirements
Underpayment penalties
Applied on quarterly basis
90%/4 = 22.5% of current year liability must be paid
in by deadline or
100%/4 = 25% of previous year’s liability must be
paid in by deadline
Penalty based on amount of underpayment at
each quarter x federal short term rate + 3%
7-41
42. Prepayments and Filing Requirements
Filing requirements
Generally, must file if gross income > standard
deduction + personal exemption amounts
If married filing separately must file if gross
income > personal exemption amount
Lower thresholds for those claimed as
dependent on another’s tax return
7-42
43. Prepayments and Filing Requirements
Due dates
April 15th
Extend filing up to six months
May not extend due date for paying taxes
7-43
44. Prepayments and Filing Requirements
Late filing penalty
5% of tax owed per month up to 25% if not fraudulent; 15%
of tax owed per month up to 75% if fraudulent
No penalty if no tax is due
Late payment penalty
If don’t pay entire tax owed by due date of return
.5% of amount due up to 25% maximum if not fraudulent
15% of amount due per month up to 75% if fraudulent
Combined late filing and late payment penalties may
not exceed maximum amounts for either one
7-44
45. Late Filing and Late Payment Penalty
Example
Assume Courtney filed her tax return on April
10 and included a check with the return for
$2,896 made payable to the United States
Treasury. The $2,896 consisted of her
underpaid tax liability of $2,866 and her $30
underpayment penalty. If Courtney had waited
until May 1 to file her return and pay her taxes,
what late filing and late payment penalties
would she owe?
7-45
46. Late Filing and Late Payment Penalty
Example Solution
Answer: Her combined late filing penalty and
late payment penalty would be $143 ($2,866
late payment × 5 percent × 1 month or portion
thereof). Note that the combined late filing and
late payment penalty is limited to 5 percent per
month.
7-46