2010_CCH_Essentials_Chapter_02

2010_CCH_Essentials_Chapter_02 - CCH Essentials of Federal...

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Chapter 2 Chapter 2 Tax Determination, Payments, Tax Determination, Payments, and Reporting Procedures and Reporting Procedures ©2009 CCH . All Rights Reserved. 4025 West Peterson Ave. Chicago, IL 60646-6085 www.CCHGroup.com CCH Essentials of Federal Income Taxation CCH Essentials of Federal Income Taxation
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CCH Essentials of Federal Income Taxation 2 of 22 Taxpayer Filing Status by Rank Taxpayer Filing Status by Rank (for same amount of taxable income) (for same amount of taxable income) Married filing separately Single Head of household Married filing jointly [and surviving spouse] Highest Tax Lowest Tax Chapter 2
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CCH Essentials of Federal Income Taxation 3 of 22 Tax Rate Schedules Tax Rate Schedules Step 1 Choose the correct rate schedule (based on filing status). Step 2 Locate the proper income bracket and note the tax applicable to the lowest income in that bracket. Step 3 Subtract the lowest income in that bracket from taxable income. Step 4 Multiply this difference by the listed tax rate. Step 5 Add this result to the tax in step 2 to arrive at the tax on taxable income. Chapter 2
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CCH Essentials of Federal Income Taxation 4 of 22 Tax Table Cannot Be Used by: Persons filing for a short period (less than 12 months) because of a change in accounting period Persons claiming the foreign earned income exclusion Persons with taxable income of $100,000 or more Chapter 2
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CCH Essentials of Federal Income Taxation 5 of 22 Personal Tax Credits Nonrefundable Child and dependent care credit Elderly or disabled credit Education credits Residential energy credits Foreign tax credit Child tax credit Retirement savings contributions credit Adoption credit Credit for alternative vehicles Refundable Federal tax withholdings and prepayments Earned income credit Additional child tax credit Excess OASDI taxes withheld First-time homebuyer credit 40% of the American opportunity credit Making work pay credit Chapter 2
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6 of 22 Nonrefundable Credits Most tax credits are nonrefundable. Nonrefundable credits can reduce the
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This note was uploaded on 12/02/2010 for the course ECAC 330 taught by Professor Richardcole during the Spring '10 term at UMBC.

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2010_CCH_Essentials_Chapter_02 - CCH Essentials of Federal...

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