Memo To: John & Jane Smith From: Date: 12/2/2014 Re: Summary of various tax issues Your first question is how is the $300,000 treated for purposes of federal tax income? In Code 61(a), income derived from services is one of the listed forms of taxable income. This includes fees, commissions, fringe benefits and similar items. Since the compensation was earned this year, even though you worked on the case for two years, you will include it as ordinary income this year. You can reduce your tax liability by deducting necessary business expenses that were paid in the same
If no year is shown, the contributions are for the current year. A—Uncollected social security or RRTA tax on tips. Include this tax on Form 1040. See “Other Taxes” in the Form 1040 instructions. B—Uncollected Medicare tax on tips.
Consult the IRS Circular E for federal payroll tax regulations and your state taxation agency (see Resources) for state payroll tax regulations. Withhold federal income tax based on the Circular E’s withholding tax tables and the employee’s W-4 form. Withhold Social Security tax at 6.2 percent of gross income, up to $106,800 for the year. Withhold Medicare tax at 1.45 percent. Consult your state withholding tax tables (see Resources) and the employee’s state income tax form to determine state income tax withholding.
Issue c) What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? Applicable Law & Analysis: Taxpayers are allowed to recover their contributions free of tax to a non-qualified annuity. This would allow John to reduce his taxable income by the amount of the annuity payments. (IRC Sec. 72(b)) Conclusion: John wants to
The key is to understand your options and take action before you fall behind on payments. Tips for worried borrowers: *Understand your grace period. Borrowers typically have a few months after graduation before they're required to start repaying their federal student loans. For most federal student loans, the grace period is six months. *Find out whether you qualify for the income-based repayment program.
ACCT553 Natasha Marsh Week 1 Homework _________________________________________________________ Please provide your answer to each question in the space provided below. When finished, submit to the DropBox. Chapter 1 (5 pts) 1. Briefly discuss the purpose of the Sixteenth Amendment. The purpose of the Sixteenth Amendment was to allow the government to create income taxes.
2. NET PROFIT RATIO NET PROFIT/SALES X 100 = % (NB use net profit figure before tax has been taken out) Leave the formula in. Now add in the figures from the Income Statement or Balance sheet and calculate the ratio. Then describe what this ratio shows and explain what it means. 3.
Refer to the weekly readings and content outlines for each week as study references for the Final Examination. Week One: Overview of the Tax System and Sources of Tax Law Objective: Prepare in proper form a personal balance sheet, cash flow statement, and budget. 1. A cash flow statement reports a person's or a family's a. net worth b. current income and payments c. plan for spending d. value of investments Objective: Determine the components of taxable income. 2.
How can I get an IRS Transcript? You may request a copy of a tax transcript free of charge from the Internal Revenue Service. The transcript can be ordered by completing Form 4506-T (Request for Transcript of Tax Return) or by calling 1-800-908-9946. You should receive the forms within 10 business days after submitting the request. I. I did not use the IRS Data Retrieval process, can I go back in and change my answer?
IF YOU, THE STUDENT, FILED TAXES FOR 2011-Check the box that applies to you: I, the student, have used the IRS Data Retrieval Tool in FAFSA on the Web to transfer my (and, if married, my spouse’s) 2011 IRS income information into my FAFSA, either on the initial FAFSA or when making a correction to the FAFSA. *FKCC will use the transferred information for verification. I, the student, have not yet used the IRS Data Retrieval Tool, but I will use the tool to transfer my (and, if married, my spouse’s) 2011 IRS income information into my FAFSA once I have filed my 2011 IRS tax return. *FKCC cannot complete the verification process until the IRS information has been transferred into the FAFSA. I, the student, am unable or choose not to use the IRS Data Retrieval Tool in FAFSA on the Web, and I will submit to the school 2011 IRS tax return transcript(s)—not photocopies of the income tax return.