Child Benefit, a universal non-contributory; non-means tested tax free benefit for parents to claim (Personal Finance, Chapter 2, Page 79) and Child Tax Credit, although entitlement depends on a number of factors i.e. age, income, hours worked, number and ages of children. (Personal Finance, Chapter 2, Page 77). Adopting the Equivalence Scales (Personal Finance, Chapter 3, page 117) will show how much Wilfred and Freya will need to obtain the same standard of living as if Wilfred still lived on his own. Wilfred had an equivalised income of £37612, (£2100 net monthly income x 12 months
This cost however is a one-time cost, and could be paid off in the first few decades of the system. The funds could pay interest because they would be very similar to government bonds. This form of collecting gross pay from workers could collect interest to be shared by the government and the workers to help cover the cost of privatizing Social Security. This cumulative interest gained by the government could be put towards paying off the initial debt of Social Security privatizing costs and eventually start to chip away and the national debt. This interest paying account would most likely provide a better interest rate than most standard bank savings accounts making Social Security an investment tool and asset to the American work
2012 Mulvey, Janemarie. “Social Security: Raising or Eliminating the Taxable Earnings Base” September 24th, 2010 Mishel, Lawrence. “Lifting Cap on Social Security taxes would rescue retirement program” May 15th, 2005 Monthly Statistical Snapshot, February 2012
Problem 3.5 from Page 106, Chapter 3 A. Construct Brandywine’s 2011 income statement Brandywine Homecare Statement of Income Year ended December 31, 2011 Revenue: Total revenues $12,000,000 Expenses: Expenses $9,000,000 Depreciation $1,500,000 Total Expenses $10,500,000 Net Income $1,500,000 B. What were Brandywine’s net income, total profit margin, and cash flow? The facilities net income is Total revenues which is the total revenue minus total expense. Their profit margin equals the net income and revenue times 100. Their cash flow is the net income plus depreciation.
Based on IRC Section 25A(d)(3), MAGI is equal to AGI before taking into account deductible IRA contributions, student-loan-interest deduction, higher education costs, U.S. Savings Bond interest, and certain other items, which makes MAGI higher than AGI in most cases. Based on the information above, MAGI is subject to a lower dollar amount than AGI is when benefit begins to phase out even if MAGI is higher than AGI. If Mr. Wilson’s MAGI is over $120,000, he is better off checking if he can deduct the tuition and fees in the Adjusted Gross Income section of Form 1040. Because tuition and fees deduction has a higher phase-out hurdle than Lifetime Learning credit, Mr. Wilson could possibly benefit from it if his AGI is less than
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
Payroll tax imposed on employees and employers enacted by the Federal Insurance Contributions Act and Self Employment Contributions Act of 1954 which set a maximum amount of compensation of which Medicare tax could be imposed each year. Beginning in 1994, maximum limit was removed and a self-employed citizen has to pay the entire 2.9% tax on self-employed net earnings. The Patient Protection and Affordable Care Act of 2010, commonly known as Obama Care, is set up to decrease the number of uninsured United States citizens and reduce the cost of health care. Many believe that with the PPAC, it will reduce premiums, prevent bankruptcy, illness, reduce out of pocket expenses, help pay for early retirees and reduce hidden tax on insured United States citizens. It is estimated that the PPAC will reduce the deficit by $100 billion and trillion dollars in the next decade.
According to nationalpriorities.org, the federal government raises trillions of dollars in tax revenue each year so the government is able to support specific government welfare programs. Working taxpayers are being to be forced to take financial responsibility for those who do not take responsibility for themselves. Newton Gingrich, an American Politian writes in his essay “Renewing America,” “As individuals we are each responsible for our own actions and their consequences. If peoples actions results in a drop in their own well- being that is their own personal responsibility and they should take the brunt of the
20% (minus admin costs) will be refunded to the public in the form of a rebate or stimulus. 25% will be delivered to the Social Security trust to repay funds which were previously taken from the fund. 50% will pay down the national debt. All of the bonuses and rebates will be tax free. The next year’s budget will be guaranteed the final spend of the previous year with an increase of the inflationary rate plus 2%.
In an article by Jake Berry he states, “It is set to cover 100 percent of the benefit payments to eligible citizens at least through 2037” (Berry, 03/2). Berry goes on to mention that afterwards it will still cover 78% of the retirees. Because the federal law forbids the Social Security administration from borrowing money, and is forced to rely solely on the taxes from taxable income, administrators are considering removing the taxable income cap to make up for predicted shortcomings. Currently, residents are taxed on the first $106,800 of their annual earnings (Berry, 03/2). Berry also mentions “A team of six lawmakers representing both major political parties is preparing to introduce a series of Social Security reforms, including changes in the funding formula and increasing the retirement age, that could mean millions of dollars in lost benefits” (Berry,