ACCT Taxes

ACCT Taxes - Taxes Income Tax 1. the Internal Revenue Code...

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Unformatted text preview: Taxes Income Tax 1. the Internal Revenue Code 2. written by Congress 3. complicated 4. every year there is new tax code 5. 3 types a. Individual income tax law b. Partnership income tax law c. Corporation income tax law 6. sales taxes a. Buy tangible property you pay state and local tax (EBR 9%) b. some places have smaller local tax and saves you money with big purchases (no federal tax on land) 7. use tax a. LA is 8 % b. A business purchases something outside of LA and imports to LA you are supposed to pay it c. Ex import computer you are individually required to pay the use tax d. Not enforced in LA and most people forget 8. property tax a. law in LA because we impose state income tax b. assessed on realty (land and building) c. some assessed based on personalty (machinery, equipment, cars, value of inventory) 9. payroll tax a. born by employee (who pays it) i. federal income tax (use IRS table) ii. social security (6.2% of $97,500) iii. Medicare (1.45% of every dollar) iv. state income tax v. local tax b. born by employer (who pays it) i. match social security of every employee ii. Medicare 1.45 1 iii. federal unemployment tax 1. only imposed on 1 st $7,000 for each employee iv. state unemployment tax 1. based on number of ex- employees that collect unemployment 10.estate tax a. after you die you get taxed b. tax imposed on your value of estate (what you leave behind) c. pay if your assets total over $3,000,000 for a couple 11.inheritance tax a. state level tax 12.excise tax a. gas b. federal and state tax c. tobacco d. alcohol e. included in price so you dont really know you are paying it I) A) B) Objectives of the federal income tax 1) Primary goal (i) Raise revenue for the government 2) Secondary goals (i) Social (a) Deductions for charitable contributions (b) Benefits society )more likely to make contributions (c) 30% rate $1000 donation X 30% (ii) Economic (a) Investment are a tax credit C) Income tax model 1) Gross income (taxable items) 2) Minus deductions for adjusted gross income (AGI) (i) Everyone is eligible but not always have them (ii) Moving expenses 2 (iii) Student loan interest (iv)IRA contributions (retirements can give $4000 per spouse) 3) = adjustments to Income (i) Subtotal called Adjusted Gross Income 4) Minus Standard Deduction (i) Automatically deducted (ii) $5300 if you are single and $10600 if you are a couple (iii) Consistent with inflation 5) OR Minus Itemized Deduction (i) Use this if it is more than the standard deduction (a) Do not have to be consistent with which one you use year to year (ii) Medical expenses (iii) Interest (iv)Charitable donations (v) Casualty and theft losses (Hurricane)...
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This note was uploaded on 04/20/2008 for the course MGT 2000 taught by Professor Anderson during the Spring '07 term at LSU.

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ACCT Taxes - Taxes Income Tax 1. the Internal Revenue Code...

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