Federal Tax

The knowledge of centralized tax has enabled me to have a deeper insight of what to expect once I decide to start my own business. I feel more confident to venture into the business world as I have a deeper understanding of what taxes entail and the function of duty in fiscal decision making and in monetary treatment. I will be able to apply the knowledge learnt about taxes. Personal income tax knowledge was crucial in that I was able to value the skilled moral and societal service duties of duty providers. From the topic on “retirement plans and investments” I learnt about the tax bylaws concerning businesses that have been provided with special terms (Karayan et al. (2005). This is due to the nature of these businesses as they do not get revenue in the conventional way and would require considerations.

Mutual funds are given consideration in terms of taxation as well as real property undertakings. I have come to understand that the central income toll is imposed on the general public, inhabitants and the U.S businesses based on their international revenue which I believe is a fair way of levying tax (Lieuallen et al. 2009). With this knowledge I will not be afraid to invest in business or other undertaking due to fear of taxes.

      Besides that I was pleased to learn that federal decree on duty interest, bonuses, payments, and other earnings of overseas people were charged at an even rate, meaning that I could invest in business comfortably in another state without getting too much worried about excessive taxation. On the topic of tax reduction and asset increases and losses, I learnt a lot concerning how assets get to be charged and how to maximize the gains on such assets. This would help me in business as I would be able to be aware of tax reductions and their importance.

And what led to decreases in assets value. Having learnt the importance of tax, I felt it would be my obligation to work hard and pay the required levy as this was some of the money that the government used to provide health care, education and to improve the infrastructure so that its citizens can have a better nation. I began to understand why it was essential to educate people on the importance of paying tax to the state.

On the subject of “retirement plans and investments”, I learnt why taxpayers need to know the tax rules of the administrators and how they make income and violation of this duty because of ignorance of the law is liable to punishment by a monetary fine (Karayan et al 2005). I will take into account such advice as I prepare myself to enter into the business field. After going through the subject on tax reduction and assets increases and losses, I became aware of the nature of tax reduction and it gave me an insight on the assets increase and loss depending on the line of business I would be operating in.

This course has had a positive impact on me as s student as I have become fully aware of the tax system and gained a profound perception of the various duties that exist and the tax rules (Karayan et al 2005). This topic will enable me to apply important tax preparation ideas. I have learnt the significance of tax questions and the effect they have on numerous taxpaying units.  I will be able to shift information attained on this subject matter to further levying bodies so as to understand their dynamics. The course has enabled me to enhance my interpersonal abilities. I also feel that I can be able to carry out research on the centralized tax system.  The course has encouraged me to widen my professional pathway to other areas that I had never thought of. I felt that I could take a course in accounting as well or advance in taxation courses and become a tax expert.

References:

Karayan et al. (2005). State and local taxation: principles and planning. New York: Law    Journal Press.

Lieuallen et al. (2009). Basic federal income tax. California: Aspen Publishers Online.

Topic: Federal Tax €“ Accounting

The assignment to complete is to use the introductory sentence about the tax payer and complete paragraph items: 12, 4,11,15, and 16. (see Below) Determine the forms to be completed. Note: Tax software to complete the project,using software to complete the project is optional and not required. The forms are provided in doc sharing for your use. However, students that desire to use the software to complete the project have the following options: H & R Block At Home: The software is included with the purchase of the hard copy of the textbook. You may use the software disk provided and follow the installation instructions. You may review the student companion website or contact the publisher’s customer service to obtain information regarding the purchase of the H&R Block At Home software online. If purchased and used to complete your project assignment, you will need to submit the file created by the software. €¢ Save your work as an H&R Block At Home file. €¢ Do NOT save the problem as a PDF file. TurboTax: If you purchased TurboTax and completed your assignment as a TurboTax file, you will need to submit your assignment as a PDF file before submitting it to your instructor €¢ Indicate that you prepared the return at the bottom of page 2 of the Form 1040. Disregard the fact that the instructions say tax payer prepared Their own tax return. Alan B. and Paula R. Turner (ages 43 and 39) are married and live at 4603 Dogwood Lane, Raleigh, NC 27611. Alan is a chemist, employed by Old North Chemical Corporation, and Paula is a self-employed doctor of veterinary medicine. They use the cash basis for tax purposes. 1. Old North Chemical Corporation renders chemicals out of forest products and has several plants in the Carolinas and Georgia. Alan is the manager of the Raleigh facility at an annual salary of $90,000. Old North maintains a qualified defined contribution pension plan for its full-time employees, but Alan did not contribute to it in 2010. The company also has a health insurance plan€”Alan’s contribution for 2010 is $4,000. (The plan covers the employee, spouse, and their dependent children.) Because of the increased risk associated with the type of business involved (i.e., processing of chemicals), Old North provides all of its employees with $200,000 of group term life insurance coverage. (See Table 4.3 in Chapter 4 of the text.) None of these items are included in Alan’s Form W-2.

4. Paula Turner is a licensed doctor of veterinary medicine with a specialty in exotic animals (e.g., reptiles, birds). Although she is considering starting her own practice (or buying an existing one), she is not sure the time is right in view of the depressed economy. For the time being, she enjoys working for other veterinarians on a contract basis. By doing this, she is making valuable contacts and benefiting from the experiences of fellow practitioners. For one of her major clients, the Raleigh SPCA, she bills her services at a discount rate. Paula uses her home as her business aIDress. She keeps her records there and otherwise conducts business (e.g., accepts engagements and referrals and renders professional advice) on the premises. Since she does not maintain a specific area for exclusive business use, however, she does not claim an office in the home for tax purposes. Paula’s receipts from her practice during 2010 were $41,000, $6,000 of which was for services performed in 2009. Not included in these amounts is $7,500 she received in January 2011 for services rendered in December 2010.

11. Alan’s mother, Loretta, suffered a stroke on December 30, 2009, and died in the hospital on January 3, 2010. Part of Loretta’s medical expenses was covered by Medicare, but Alan absorbed the balance. On January 18, 2010, he paid the balance of $9,800, of which half was attributable to expenses incurred in 2009 and the rest in 2010. At the same time, Alan also paid the funeral expenses of $6,000. Although Loretta lived in her own house (see item 7 above), she has been properly claimed as a dependent of the Turners for the past few years.

15. The Turners’ household includes two dependent children: Ethan (age 14) and Ava (age 15), both of whom are full-time students. Relevant Social Security numbers appear below:

Name                   Social Security Number      Birth Date Alan B. Turner     123€“45€“6785                      07/14/1967 Paula R. Turner    123€“45€“6786                      02/20/1971 Loretta Turner      123€“45€“6784                      04/09/1938 Ethan Turner         123€“45€“6787                     12/06/1996 Ava Turner            123€“45€“6788                     07/29/1995 Paula’s professional activity code is 541940.

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