ACC 330 Final Project Three Andrew Groves.docx - Maloney Hoffman Raabe Young CPAs 5191 Natorp Boulevard Mason OH 45040 Daniel B Butler Freida C Butler

ACC 330 Final Project Three Andrew Groves.docx - Maloney...

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Maloney, Hoffman, Raabe, & Young, CPAs 5191 Natorp Boulevard Mason, OH 45040 October 16, 2018 Daniel B. Butler Freida C. Butler 625 Oak Street Corbin KY 40701 Dear Daniel and Freida, There are four main aspects that will help you both better understand the ways to reduce tax liabilities. They are what can make up a tax burden, treatment of potential gain or loss, tax planning and legal and ethical implications. A tax burden is what you would be responsible for in your portion of taxes. Some of the factors that in your situation should be outlined are taxable income, filing status, adjustments and exemptions. Below are descriptions of each and how you can anticipate things to flow with the four of them. Taxable Income The federal tax system is progressive, meaning that generally your tax rate increases as your income increases. The amount of taxable income you have determines what your tax bill will be. Marginal tax rates determine how taxable income is taxed and those who pay income
taxes are divided up into different ranges known as tax brackets. Income in each bracket is then taxed at a specific rate. ( Smith, L.) Filing status Besides income, the taxes you pay depend on your filing status. So whether you file as single, married filing separately , married filing jointly or head of household will affect how much income tax you owe. For tax year 2016, single filers with taxable income of up to $9,275

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