Ind. IO Chap. 2 - 2008

Ind. IO Chap. 2 - 2008 - Chapter I:2 Determination of Tax...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter I:2 Determination of Tax Learning Objectives After studying this chapter, the student should be able to: 1. Use the tax formula to compute an individual's taxable income. 2. Determine the amount allowable for the standard deduction. 3. Determine the amount and the correct number of personal and dependency exemptions. 4. Determine the amount of child credit. 5. Determine the filing status of individuals. 6. Explain the tax formula for corporations. 7. Explain the basic concepts of property transactions. Areas of Greater Significance It is absolutely vital that students understand the individual formula for calculating the tax or refund due (including standard deduction, exemptions, and filing status). This formula is necessary throughout the balance of the text to work the problems. Any deficiencies in understanding at this point would be carried over to subsequent materials. Areas of Lesser Significance In the interest of time, the instructor may determine that the following area is best covered by student reading, rather than class discussion: 1. Business income and business entities I:IO2-1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The following areas may prove especially difficult for students: 1. Whether a taxpayer qualifies for the head of household filing status. 2. The relationship between the standard deduction and itemized deductions. 3. Whether the qualification (or non-qualification) of a person for dependency exemption affects the head of household filing status (i.e., the rules for head of household and dependency exemptions overlap, but are not totally consistent). Highlights of Recent Tax Law Changes The following items have changed from the 2007 edition of this chapter: 1. Personal and dependency exemptions for 2007 have increased to $3,400. 2. The floors for phase-out of itemized deductions have increased (See page I:2-10). 3. The amount of standard deduction for each filing status has increased for 2007. (See page I:2-10). 4. The floors for phase-out of personal and dependency exemptions have increased (See page I:2-19). 5. The floors for filing a tax return at each filing status have increased (See page I:2- 33). Teaching Tips 1. Due to the annual changes in many of the rules covered in this chapter (i.e., standard deduction, phase-out amounts) you may wish to inform the students that examinations and/or quizzes will be held on an open-book basis or that you will provide any required statutory amounts for testing purposes. Using this approach allows the students to concentrate on the concepts rather than memorizing numbers. 2. This introductory chapter is a good place to begin emphasizing the difference between deductions for AGI and deductions from AGI. This distinction will increase in importance in subsequent chapters. I:IO2-2
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 12

Ind. IO Chap. 2 - 2008 - Chapter I:2 Determination of Tax...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online