Taxation in the United States and Gross Income Essay

Submitted By JohnG1234
Words: 469
Pages: 2
Open Document
How to write a memo
Use the IRAC method-Determine the facts then:
I-Issue (Question)
R-Rule (which rules apply)
A-Analysis
C-Conclusion
After the first draft, look back at the facts. Are more needed or is more research needed.
Code and regulations
Internal revenue code is a law enacted by congress-currently Internal revenue Code of 1986, as amended (“IRC”)
Regulations are issued by the treasury-the IRS
(Permanent, temporary and proposed)
Legislative or interpretive-but both are so well thought out that the courts grant deference so they will be hard to overturn in court
Tax Law
IRC is based on sections
Sec 61 gross income
Sec 162 business expense
Tax treaties are the law
Income Tax regulations are preceded with 1.
1.61-1 gross income
1.162-5 business expense other taxes, such as gift or estate are preceded with 20 or 25.
IRS audits
Random, based on form 1099 matching
IRS may audit and propose changes
If taxpayer and IRS agent cant agree
Can argue with supervisor (appeals)
90 day letter issued if no agreement taxpayer has 90 days to file in tax court if not, there is a final assessment
Often also penalties and interest
Appellate courts Supreme court court of appeals for taxpayers US court of appeals

US tax court US district court for taxpayers US court of federal claims

Tax services-How to find rules
Lexis-Nexis

CHAPTER 2

Tax return forms
Form 1040, 1040A, 1040EZ, 1040NR

FORMULA FOR INDIVIDUAL INCOME TAX

Income from whatever source derived
-minus exclusions
=gross income
-above the line deductions (deductions for adjusted gross income
=Adjusted gross income (the line or bottom of page 1)
-deduct greater of standard deduction or itemized, &
-deduct personal and dependency exemptions
=Taxable income
X times tax rate (tax table or schedule)=tax
+ Plus, additional taxes-AMT, S.E, Household employee
- Minus Credits and Prepayments
=Tax Payable or Refund Due

Standard Deduction

Varies based on:
Filings status (single, married separate or joint, Head of Household)
Plus extra for
Show More

Related Documents: Taxation in the United States and Gross Income Essay

International Tax Essay

U. S. Income Taxation Of International Activities International Topics • Sourcing of income • “U. S. Persons” and “Foreign Persons” • Taxation of Foreign Persons • Controlled Foreign Corporations • “Grossing up” of Dividends • Deduction and Credit for Foreign Income Taxes • Foreign Earned Income Exclusion Several Tax Strategies related to International Tax to demonstrate these issues Sourcing Of Income • Determining the “source” of income frequently determines whether the income is taxable in…

Words 4097 - Pages 17

Tax Memorandum Essay

program constitutes prepaid income that must be included in Peaceful’s income (and therefore subject to tax) in the year in which it’s received. Conclusion: Peaceful should pay the audit based on the facts. The IRS is correct according to the tax code and laws. Analysis: Peaceful receive prepay from their customers for funeral goods and service, so Peaceful…

Words 1042 - Pages 5

Avoiding Taxes Essay example

taxes on your estate before you expatriate. For the majority of people renouncing your citizenship will not cause you any more taxes than what you already are obligated to. However if you have assets greater than $2,000,000 or your average annual net income over the past five years is over $147,000 then you will probably have to pay an expatriation tax or exit tax. Even if you fall below this you will still have to file with the IRS and go through the legal and palatal aspects of renouncing your citizenship…

Words 1508 - Pages 7

FINC6013 L12 Essay

decides to levy a tax it must consider not only the potential revenue from the tax, or how efficiently it can be collected, but also the effect the proposed tax can have on economic behaviour - For example, the U.S. Government’s policy on taxation of foreign source income does not have as its sole objective, the raising of revenue - Its other objectives include - Neutralising tax incentives that might favour (or disfavour) U.S. Private investment in other developed countries - Provide an incentive for…

Words 2654 - Pages 11

Tax and Income Essay

Congress are valid only if they are consistent with it. For much of the history of the United States there was no income tax and there was some controversy over whether the Constitution permitted one. This controversy was resolved when the Sixteenth Amendment was passed in 1913. The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration. U.S. Constitution, Amendment…

Words 9500 - Pages 38

Lewis A. Flemming You Decide-John And Jane Smith Tax Advice

$300,000 treated for purposes of Federal tax income? The $300,000 would be classified and included in Johns gross income. Gross income in United States tax law is receipts and gains from all sources less cost of goods sold. Gross income is the starting point for determining Federal and state income tax of individuals, corporations, estates and trusts, whether resident or nonresident. "Except as otherwise provided" by law, Gross income means "all income from whatever source," and is not limited to…

Words 1975 - Pages 8

Case 15 - Emily G. Johnston Essay examples

are the income tax consequences of South Carolina's offer to BMW? What are the advantages of South Carolina's offer from the perspective of New Jersey? What form should New Jersey's subsidies take so that they can minimize the negative income tax impact on the recipients? Facts The purpose of this letter is to confirm with you (Mr. Glynn) our yesterday phone conversation. In which, I asked you for assistance in regards to a formulating a reinvigorated industry search program in the State of New…

Words 1655 - Pages 7

Macroeconomics: Monetary Policy and Household Consumption Expenditures Essay

consumption expenditures include food & beverages, clothing & footwear, housing, household goods, transport, hotels, recreation, health, and other goods. Spending by the government sector including both the purchase of final goods and services, or gross domestic product, and transfer payments. Government expenditures are used by the government sector to undertake key functions, such as national defense and education. These expenditures are financed with a combination of taxes and borrowing Business…

Words 711 - Pages 3

Accounting Tax Essay example

43. a. Stange v. United States , 282 U.S. 270, 51 S. Ct. 145, 75 L. Ed. 335, 1931 U.S. LEXIS 2, 71 Ct. Cl. 778, 1931-1 C.B. 414, 9 A.F.T.R. (P-H) 598, 1931 P.H. P391, 2 U.S. Tax Cas. (CCH) P638 (1931) Yellow Triangle b. SUPREME COURT OF THE UNITED STATES January 5, 1931, Decided c. 282 U.S. 277 p.281 51 S. Ct. 148 p.150 75 L. Ed. 339 p.342c. d. Louisiana-Pacific Corp. v. Dep't of Revenue 26 P.3d 422, 2001 Alas. LEXIS 54 (Alaska 2001) LexisNexis Headnotes HN1 | 26 P.3d 422 p.429…

Words 3590 - Pages 15

Expanding Your Business Into Foreign Markets

established abroad and the taxable implications. Facts IRS regulations states that U.S. citizen or resident alien must report income from all sources within and outside of the U.S. However, depending on the organizational structure there are applicable tax laws relevant to that organization. Therefore, key tools of tax analysis are essential in the establishing a foreign organization abroad. Selection should be made to evaluate taxation of any Foreign Business Relationship, such as Foreign Parent Corporation…

Words 1600 - Pages 7