Premium Essay

Federal Taxation Article Brief

In: Business and Management

Submitted By arayawna
Words 738
Pages 3
Arayawna Moore

ACCT 613- Federal Income Taxation

February 22, 2014

University of Maryland University College

Susan K. Duke

Issue: The Dynamic Effects of Personal and Corporate Income Tax Changes in the United States within the Labor Market

Rule: * Most corporate income is subject to a 35% statutory tax rate * Taxpayers with an ordinary income tax rate of 15% or less pay the 0% rate on dividends. Taxpayers in the 25%, 28%, 33%, and 35% tax brackets are subject to a 15% tax rate on dividends. * 26 U.S. Code § 861 - Income from sources within the United States * 26 U.S. Code § 3510 - Coordination of collection of domestic service employment taxes with collection of income taxes * 26 U.S. Code § 3401 - Definitions

Analysis: This article helps the reader look beyond the impact of tax changes on output or revenues allowing us to gain further insight into how tax changes are transmitted to the economy and into possible differences between the two tax components; personal and corporate income tax. The authors point out that changes in taxes may impact on costs of production and may affect inflation, to the extent that cost changes are passed into prices. There are important differences in how personal and corporate income tax changes affect the labor market. Studies that focus exclusively on total average tax rates or revenues are therefore only of limited use for assessing the ability of tax policy to affect employment at various horizons. When the prime policy objective is to create jobs relatively fast, cuts in personal income taxes are probably the best fiscal instrument. The employment effects of cuts in corporate taxes are more delayed and less certain. The studies above suggest that the same is true for government spending increases.
This article has presented empirical results that support…...

Similar Documents

Premium Essay

Federal Taxation

...1 Tax Credits / Alternative Minimum Tax Federal Tax I Fall 2012 OVERVIEW: This handout summarizes the Tax Credits and Alternative Minimum Tax topics in chapter 7 of your textbook. These are the last topics we will be covering this semester, and as previously discussed I am providing this handout supplementing the material contained in your text due to the time we lost because of Storm Sandy. The material on Tax Credits is contained on pages 7-23 – 7-34 (11 pages) of your textbook. The material on AMT (Alternative Minimum Tax) is covered on pages 7-8 – 7-14 (7 pages). So this is only 18 pages of chapter 7. We covered the rest of chapter 7 earlier this semester prior to exam 2. Tax Credits: As you will recall from very early in the semester, tax credits are a direct dollar for dollar reduction of our income tax liability. We looked at the value of a tax credit compared to the value of a tax deduction. Tax credits can either be nonrefundable or refundable. A nonrefundable credit will reduce a taxpayer’s tax liability, but never below zero. A refundable credit, on the other hand, will go even further. If the credit is large enough to reduce a taxpayer’s tax liability to zero, the excess credit will be refunded to the taxpayer (i.e. treated as additional tax paid in. Example 1: Tom has a tax liability of $ 3,000, a nonrefundable credit of $ 4,000, and federal tax withheld of $ 1,500. Calculate Tom’s refund: Tax Liability Less: credit Net tax Less Withholding Refund $ 3,000 ( 3...

Words: 2508 - Pages: 11

Premium Essay

Taxation

...the amounts being the lesser of $5,000 or earned income- the amount of $6,000 is not applicable to this couple due to their age), or ROTH IRAs , also known as “back loaded IRA” ( where the tax benefits are not received at the beginning of the IRA, but are realized at the end). It is generally suggested that persons go ahead with ROTH IRAs rather than Traditional IRAs as there are more benefits to be had. While James’ Traditional IRAs would grow tax-deferred, (he would not pay taxes on contributions until withdrawn, at retirement), with ROTH IRAs James would not get a tax deduction when he would make a contribution to a Roth IRA, but earnings are always to be tax-free. Regarding which choice would be better, if one does qualify for both, article “Individual Retirement Accounts” states that “the biggest determining factor is whether it is to your benefit to take a deduction now and pay taxes later when you withdraw the money, or to pay taxes on your contribution now and never worry about them again.” At this point, James and Dena would need to really analyze their financial situation. All would not be lost with a Traditional IRAs however, as one is now able to have a “roll-over” of a traditional IRA to a Roth IRA. However, let us not forget that they have children. What additional considerations would they need to make concerning the funding of the future educational needs of their children? There is the additional Coverdell Education saving account, which is a special......

Words: 1304 - Pages: 6

Premium Essay

Federal Taxation

...(2010), Your Federal Income Tax for Individuals, part 5-23, personal interest is expense that is considered not deductible. Personal interests are interests on car loans, credit cards, loans for appliances and furniture and interest on loans made by one person to another. Because Donald did not have $600,000 to pay Marla, he agreed to have the whole amount payable over 10 years at 8% interest. IRS considers the amount as a personal loan that Marla lends to Donald. The interest of the loan falls into categories including in personal interests. Therefore, IRS disallows the interest deduction that Donald claimed as investment interest. 3. Discuss the support that Donald will need to defend his position that the interest is investment related and should be deductible for tax purposes. As agreement between Donald and Marla after divorce, they divided their property equally based on the fair market value of property. As a result, Donald had corporate stock, a commercial building, and a personal residence. In return, Marla got other property. However, Donald’s property had the higher value compare to Marla’s. Because they did not sell their property, Donald believed that all the property owned by him or Marla is considered either investment property or qualified residence. In addition, the amount of $600,000 is the fair market value of their property. Hence, its interest is considered one of his investment interests. As a result, Donald deducted the interest on this Federal......

Words: 710 - Pages: 3

Premium Essay

Federal Taxation Week 1 Quiz

...legal services in organizing the corporation. The value of her services is $20,000. In return, Helen receives 100 shares in Red Corporation. With respect to the transfers, (Points : 2) |        Kirby will recognize gain.        Helen will not recognize gain.        Red Corporation will have a basis of $280,000 in the property it acquired from Helen.        Red will have a business deduction of $20,000.        None of the above | Question 8. 8. (TCO 11) Which statement, if any, does not reflect the rules governing the negligence accuracy-related penalty? (Points : 2) |        The penalty rate is 20%.        The penalty is imposed only on the part of the deficiency attributable to negligence.        The penalty applies to all federal taxes, except when fraud is involved.        The penalty is waived if the taxpayer uses Form 8275 to disclose a return position that is reasonable though contrary to the IRS position.        None of the above | Question 9. 9. (TCO 11) The rules of Circular 230 need not be followed by (Points : 2) |        an attorney.        a CPA.        a Walmart cashier who e-files 15 tax returns for her paying clients per filing season.        an enrolled agent.        All of the above are subject to the Circular 230 rules. | Question 10. 10. (TCO 11) The privilege of confidentiality applies to a CPA tax preparer concerning the client’s information relative to (Points : 2) |        financial accounting tax accrual......

Words: 845 - Pages: 4

Free Essay

Federal Taxations

...Rev. 06/2014 FACTS Why? WHAT DOES SALLIE MAE® DO WITH YOUR PERSONAL INFORMATION? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. The types of personal information we collect and share depend on the product or service you have with us. This information can include:  Social Security number and income  Account balances and payment history  Account transactions and credit history All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Sallie Mae chooses to share; and whether you can limit this sharing. What? How? Reasons we can share your personal information For our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus For our marketing purposes – to offer our products and services to you For joint marketing with other financial companies For our affiliates’ everyday business purposes – information about your transactions and experiences For our affiliates’ everyday business purposes – information about your creditworthiness......

Words: 833 - Pages: 4

Premium Essay

An Abstract Is a Brief Summary of a Research Article

...An abstract is a brief summary of a research article, thesis, review, conference proceeding or any in-depth analysis of a particular subject or discipline, and is often used to help the reader quickly ascertain the paper's purpose.[1] When used, an abstract always appears at the beginning of a manuscript or typescript, acting as the point-of-entry for any given academic paper or patent application. Abstracting and indexing services for various academic disciplines are aimed at compiling a body of literature for that particular subject. The terms précis or synopsis are used in some publications to refer to the same thing that other publications might call an "abstract". In management reports, an executive summary usually contains more information (and often more sensitive information) than the abstract does. SEMIABSTRACT. : having subject matter that is easily recognizable although the form is stylized pertaining to or designating a style of painting or sculpture in which the subject remains recognizable although the forms are highly stylized in a manner derived from abstract art. International Painter David S. Painter (born 1948) is an associate professor of international history at Georgetown University. He is a leading scholar[1] of the Cold War and United States foreign policy during the 20th century, with particular emphasis on their relation to oil. Educational and career Painter studied history at King College (BA 1970), Oxford as a Rhodes Scholar (BA 1973), and the......

Words: 808 - Pages: 4

Premium Essay

Concepts in Federal Taxation 2011 Murphy Higgins 18th Edition Solutions Manual

...Concepts in Federal Taxation 2011 Murphy Higgins 18th Edition Solutions Manual Click here to download immediately!!! http://www.testbankpdf.com/taxation/concepts-in-federal-taxation-2011murphy-higgins-18th-edition-solutions-manual/ ----------------------------------------------------------------------Concepts Concepts Concepts Concepts in in in in Federal Federal Federal Federal Taxation Taxation Taxation Taxation 2011 2011 2011 2011 Murphy Murphy Murphy Murphy Higgins Higgins Higgins Higgins 18th 18th 18th 18th Edition Edition Edition Edition Solutions Solutions Solutions Solutions Manual Manual Manual Manual -------------------------------------------------------------------------***THIS IS NOT THE ACTUAL BOOK. YOU ARE BUYING the Solution Manual in e-version of the following book*** Name: Concepts in Federal Taxation 2011 Author: Murphy Higgins Edition: 18th ISBN-10: 0538467924 Type: Solutions Manual - The file contains solutions and questions to all chapters and all questions. All the files are carefully checked and accuracy is ensured. - The file is either in .doc, .pdf, excel, or zipped in the package and can easily be read on PCs and Macs. - Delivery is INSTANT. You can download the files IMMEDIATELY once payment is done. If you have any questions, please feel free to contact us. Our response is the fastest. All questions will always be answered in 6 hours. This is the quality of service we are providing and we hope to be your helper. Delivery is in the next......

Words: 30213 - Pages: 121

Premium Essay

Sw Federal Taxation 2011

...Sometimes it is difficult to associate specific borrowings with projects. In these situations, it is easier to just use the weighted-average rate on all interest-bearing debt, including all construction loans. This is the weighted-average method. Case 10-4 (concluded) Requirement 5 The three steps used to determine the amount of interest capitalized during a period are: 1. Determine the average accumulated expenditures for the period. 2. Multiply average accumulated expenditures by the appropriate interest rate(s). 3. Compare interest capitalized with total interest cost incurred. Interest capitalized can’t exceed interest cost incurred. Research Case 10-5 (Note: This case requires the student to reference a journal article.] Requirement 2 The FASB has tentatively decided that purchased goodwill does meet the criteria in Concepts Statement 5 for initial recognition as an asset. Goodwill does represent “future economic benefits” that are in the “control” of the enterprise and that have arisen from a “past transaction or event.” Requirement 3 Some believe that goodwill is not an asset because of concerns about 1) equating costs and assets, 2) exchangeability of goodwill, and 3) controllability. Real World Case 10-6 ($ in millions) Decrease in property, plant and equipment, net ($4,267 – 4,168) $(99) Decrease in intangible assets, net ($1,960 – 1,917) (43) Net decrease (142) Add: Depreciation......

Words: 8052 - Pages: 33

Premium Essay

Federal Taxation

...Ketlie K. Daniels Professor: Christopher Zapalski Federal Taxation – ACC 307 006016 November 21, 2010 Discuss the different types of interests and the IRS rule related to the deductibility of each type for tax purposes. Interest is defined as compensation for the use or forbearance of money. The general rule permits a deduction for interest paid or accrued within the taxable year on indebtedness. There are several types of allowable interest. If you paid or accrued interest on a loan and used the loan proceeds for more than one purpose, you may have to allocate the interest. This is necessary because different rules apply to investment interest, personal interest, trade or business interest, and home mortgage interest. Interest on Qualified Student Loans - The deduction is allowable only to the extent that the proceeds of the loan are used to pay qualified education expenses. Interest paid on student loans are treated differently than other interest expenses. Unlike other interest, student loan interest is not itemized on your tax return, which means it can be deducted regardless of whether you itemize or use the standard deduction. Investment Interest - is interest paid on money borrowed to purchase or hold investment property. Investment interest is deductible as an itemized deduction to the extent of net investment income. Qualified Residence Interest - interest on a home mortgage, which may be deductible as an itemized deduction. Includes interest on......

Words: 1031 - Pages: 5

Premium Essay

Federal Taxation - Audit

...decision can be reached, if the taxpayer ultimately decides to go to court. A taxpayer, having made a decision to go to the District Court, for example, cannot later decide to go to the Tax Court. The taxpayer must think very seriously before taking the case to court. Not only may the economic costs be high, but the psychological and emotional costs may equally traumatic. The taxpayer will need to consider whether the tax savings will be worth the legal fees, time, and costs associated in going through with the case. In deciding to which court to take the case, the taxpayer should never us past statistics on taxpayer winnings in the various courts as an indicator to pursue a case. References [1] Gibberman J.D., David L., (2010) CCH Federal Taxation-Basic Principals, Comprehensive Topics, ISBN 978-0-8080-2353-1, Printed in U.S.A. [2] http://www.irs.gov/pub/irs-pdf/p947.pdf, Retrieved: May 4, 2011 [3] http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00006701----000-.html, Retrieved, May 6, 2011 [4] http://www.nysscpa.org/cpajournal/2008/708/essentials/p40.htm, Retrieved, May 7, 2011 [5] http://www.irs.gov/pub/irs-pdf/p10.42.pdf, Retrieved: May 7, 2011 [6] Mathews, Mark E., (2004), Regulations Governing Practice Before the Internal Revenue Service, Document: 31 CFR Part 10 [REG-159824-04] RIN 1545-BE13...

Words: 1063 - Pages: 5

Premium Essay

Federal Taxation -You Decide Paper

...deduction for John than purchasing the building since leasing is deductible from gross income. (Code §162(a)) Since John and Jane do not have employer sponsored retirement programs we recommend establishing traditional IRA’s. This will allow both of them to have a retirement program and a tax deduction each year of $10,000. (§219(f) (3)) John is able to establish Jane’s IRA and contribute since she has minimal income. (Code §219(c )) With the lease payment and the IRA’s John will have deductions of $52,000 against the $300,000 and an additional deduction of paying half of the self employment tax. () 2(a) Jane inquired concerning what the tax treatment difference if any there is in paying down a mortgage and assuming a new mortgage in terms of federal taxes. Married taxpayers may exclude up to $500,000 of gain upon the sale of their residence every two years. (Code § 121(b)(1) and (2), (Code §121(b)(3)(B)). The requirement is they need to have owned and occupied the residence as their principal residence for two out of the last five years prior to the sale. (Code §121(b)(3)(A)) Assuming a new mortgage will most likely give them a larger deduction of mortgage interest if they have lived in their current home for a while that is otherwise nondeductible. (Code § 163(h)(3)(E)(i). In summary the only tax advantage is the ability to have a larger deduction of mortgage interest on the new home. (Code § 163(h)(3)(E)(i). With the sale of their current home they would be able to......

Words: 2142 - Pages: 9

Premium Essay

Federal Taxation

...Should the USA convert to a zero personal income tax? Abstract: This paper will discuss 2 countries that have implemented zero federal income tax and what would happen if the US chose to adopt a similar tax base. Every year most people in the United States of America gear up to file their yearly personal income taxes. The government relies on this money to operate. About forty five percent of the government income of the United States comes from personal income tax. A lot of Americans wish that they did not have to pay personal income taxes and that the US would adopt a zero income tax policy. There are many countries that currently have a zero tax model and it works. This paper will discuss the systems of Qatar and the Cayman Islands and determine if the US could benefit from similar models. In Qatar the government relies on its income from the natural gas reserves. It is one of the richest countries in the world. Qatar’s gas reserves are the third largest in the world. It requires businesses that are in the oil and gas industries to pay a thirty five percent tax rate. Residents of Qatar pay five percent of their income to social security and their employers pay 10 percent. Because the U.S. does not have the natural gas reserves like Qatar, it cannot rely on such reserves to provide income for the government. The Cayman Islands are another country with a zero personal income tax. They also do not require residents to pay into social security. Because...

Words: 1456 - Pages: 6

Premium Essay

Federal Taxation

...14-24 ANS According to IRS code sec 243, the purpose is to avoid triple taxation that’s allowing corporation to pay dividends to its shareholders without being taxed for the third time. Domestic corporations and dividends paid by the domestic corporation are entitled to the claim of dividends-received deduction. 14-51 ANS The net income on its financial books of a corporation my differ from the taxable income on its return and reconciliation is used to reconcile the difference. 14-52 ANS a) Realized gain but unrecognized ($27,000-$15,000=$12,000) Basis of $15,000 b) Recognized gain of $2,000 ( $3,000-$1,000) Basis of $1,000 c) $10 per stock *900 shares =$9,000 Basis of the stock is $15,000 less $9,000 (shares of 900*$10 per stock) gain of $6,000 to the corporation ($15,000-$9,000) Basis to the corporation of the property received is $15,000 d) $10 per stock *100 shares = $1000 Basis of stock is $1,000 less $1,000 (100 shares*10) no gain or loss ($1,000-$1,000) Basis to the corporation of the property received is $1,000 17-1 ANS Seven types of corporate reorganization Type A reorganization is a form of consolidation or merger that meeting state law requirement. (Reg. 1.368-2(b)) Type B reorganization is a form of reorganization used to acquire asset and stock of Target Corporation. Type C reorganization is a form of reorganization that the corporation acquiring the target corporation exchanges the massive acquisition of the target corporation for its......

Words: 620 - Pages: 3

Premium Essay

Federal Taxation

...Federal Tax Law Effect on Individual Taxpayers Regarding Earned Income Tax Credit Federal Tax Law Effect on Individual Taxpayers Regarding Earned Income Tax Credit Jaree Chambers DeVry University / Keller Graduate School of Management Abstract Federal tax law effects each taxpayer differently and can prove difficult to interpret. The differences very due to income, family size or family situations i.e. single, married, divorced, childless, etc., and allowable credits or deductions. During our review of the Federal tax laws in this paper, we will briefly document how the United States taxation system developed and the effects of the earned income tax credit on taxpayers. While the earned income tax credit and the child tax credit came to be around the same time, we will focus on the earned income tax credit as it is our largest federal entitlement program. Federal Tax Law Effect on Individual Taxpayers Regarding Earned Income Tax Credit Taxation dates back to the United States Constitution empowering Congress to “lay and collect taxes, duties, imports and excises to pay the debts and provide for the common defense and general welfare of the United States.” Limitations were established limiting taxation as follows: “all duties, imports, and excises shall be uniform throughout the United States, that direct taxes should be laid in proportion to the population.” This language is key as many early tax laws were found to be unconstitutional due to these two simple......

Words: 2417 - Pages: 10

Premium Essay

Important Attributes of Quality Health Care: Consumer Perspectives - Brief Article

...Health Care: Consumer Perspectives - Brief Article IMPORTANT ATTRIBUTES OF QUALITY HEALTH CARE: CONSUMER PERSPECTIVES M H Oermann, T Templine Journal of Nursing Scholarship Vol 32 no 2 (1998) 167-172 Personnel at contemporary health care agencies are identifying patient outcomes to evaluate services and patient care. This research focuses on consumer perspectives of high quality health care. Consumer perspectives or expectations have been found to be based on demographic characteristics, health care experiences, and specific concerns related to consumers' unique health problems. Further, patients evaluate their experiences by comparing their expectations to actual events. Satisfaction occurs when events match expectations. The purpose of this research was to allow consumers to identify important attributes of quality health and nursing care and to examine the relationship of consumer perspectives to health status and selected demographic variables. Method and sample. This exploratory study examined a convenience sample of 239 health care consumers, of which 50% were recruited from homes in neighborhoods of a large metropolitan area (ie, urban and suburban) in the Midwest, and 50% were recruited from waiting rooms of clinics in the same neighborhoods. These participants included 149 women (63.1%) and 87 men (36.9%). These gender totals equal 236, whereas previously stated the sample size was 239. This discrepancy was not addressed in the article. The age range varied from......

Words: 825 - Pages: 4

Schneeketten 215/60-16 , 225/50-17 225/55-16 Ö-Norm / Stehend montierbar | Ladies Wide EEE Fit Washable Burgundy-Blue Orthopaedic Diabetic Slippers Booties | X-Ray Markers Rl Anatomical Markers With Orange Ribbon