Shifting a portion of income to family members can also lower ones tax bill, you are allowed to give $12,000 per year to each recipient without incurring a gift tax but watch out for kiddie tax rules before considering this option. Claim your dependents on your taxes as it may mean $1k per each qualified child dependent showing up as a tax credit for the year. Credits are worth more than deductions since they directly lower ones tax liability dollar for dollar. Plan deductions by determining if taking them this year compared to next year would be more beneficial your
Sept. 1 | Purchased inventory from Orion Company on account for $50,000. Darby records purchases gross and uses a periodic inventory system. | Oct. 1 | Issued a $50,000, 12-month, 8% note to Orion in payment of account. | Oct. 1 | Borrowed $75,000 from the Shore Bank by signing a 12-month, zero-interest-bearing $81,000 note. | * Instructions (a) Prepare journal entries for the selected transactions above.
Again, note that the actual state rate is reduced by 25% to allow for the deductibility of state income taxes on the federal income tax return. If Dana’s state tax rate increases to 10%, corporate bonds are still superior to Treasury bonds. 50. [LO 1] At the beginning of his current tax year David invests $12,000 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 10 years. David receives $700 in interest ($350 every six months) from the Treasury bonds during the current
(Points : 5) is increased with a debit is decreased with a credit is not an expense account All of the above 3. (TCOs A, B) Below is a partial list of account balances for Cerner Company: Cash $5,000 Prepaid insurance 500 Accounts receivable 2,500 Accounts payable 2,000 Notes payable 3,000 Common stock 1,000 Dividends 500 Revenues 15,000 Expenses 12,500 What did Cerner Company show as total credits? (Points : 5) $21,500 $21,000 $20,500 $22,000 4. (TCOs B, E) A small and private company may be able to justify using a cash basis of accounting if it has _____. (Points : 5) sales under $1,000,000 no accountants on staff insignificant receivables and payables all sales and purchases on account 5.
Their current FMV at the date of the theft was $12,000. The antiques were not insured. Neil’s AGI for the current year is $60,000. What is the amount of Neil’s deductible casualty loss in the current year? 4) In 2013, Sarah loans Seymour $5,000 for his use in establishing his business.
September 22 2013 TAX FILE MEMORANDUM To: Tax Memorandum – Junk File Subject: TaxQuestions@homesale Summary of Facts: Mr. Junkiewicz and his wife bought their current home in year 2000 with $300,000 cash. There was no mortgage. Improvements made to the house was a $25,000 sun room paid in cash. They are in the 30% percent tax bracket. In 2013 the couple sold their house for $500,000 and bought a new house for $700,000 in cash.
Alexa’s AGI from all sources other than the rental property is $200,000. Unless otherwise specified, Alexa has no sources of passive income. 61. (LO4) Assuming Alexa receives $20,000 in gross rental receipts, answer the following questions: a. What effect does the rental activity have on her AGI for the year?
Merger or acquisition of Smithon by Johnson Services a) If the two companies are merged then Smithon could use Johnson Company’s NOL carry forward. The amount of the taxable income of any new loss corporation for any post-change year which may be offset by pre-change losses shall not exceed the section 382 limitation for such year. As in IRC sec 382 limitations are except as otherwise provided in this section, the section 382 limitation for any post-change year is an amount equal to— (A) the value of the old loss corporation, multiplied by (B) the long-term tax-exempt
For the Petersan’s their allowable expense will be $3,000.00 for their one qualifying child, and based on their AGI of $90,916.00, they are limited to a $600.00 ($3,000 x .20) credit. This calculation is made using the table on Form 2441, and then reflected on line 48 of Form 1040. There is one additional credit they will qualify for and that is the Child Tax Credit. This is an up to $1,000 tax credit (reduces tax dollar for dollar) for each qualifying child subject to income limits. The Petersan’s have one qualifying child that meets the IRS criteria for the full $1,000 tax credit.
A. Cash sales, $60,000 (Income Statement) B. Employee salary expense, $34,000 (Income Statement) C. Common stock issued for cash, $100,000 (Balance Sheet)