Identify and present all taxes you pay during the course of a typical year. Include taxes that
are called fees (such fees are really taxes by another name).
Some of the taxes you pay may have to be estimated (i.e., sales taxes). What is the percentage
proportion of these taxes in relation to your income; and, with respect to your disposable
income (that is, income after taxes), what are the implications insofar as your spending
behavior is concerned?
My present occupation while in school is a federal work-study award that pays $3000 per
semester. My income for 2010 was a little over $6485 so I did not have to pay federal tax.
Any grocery items and food, restaurant meals, and clothing or shoes priced over $110 that I
bought in New York City were subject to 8.875% sales tax.
Time Warner demands their monthly state and federal taxes, and when I make international
calls, use Operator Services or Directory Assistance, my taxes increase based on usage. If
those international calls are to mobile devices I incur additional charges, and pay for taxes
and fees associated with Digital Home Phone service as well.
Con Ed charges sales tax at $4.5%, a Merchant function charge, GRT and other tax
surcharges, and a delivery charge for maintaining their electricity delivery system. This is
collected on behalf of
NYS and/or my locality SBC/RPS and include charges for delivering
the electricity, reading and maintaining the meters, a basic service charge, and, charges for
billing and payment processing. There is a temporary NY State surcharge that supposed to
cover new fees imposed by the state …thank goodness I don’t pay for gas!
What information is used to compute taxable income? What parts of computing taxable
income mentioned in problem #1 on page 131 of your text relate to your financial situation?
In the case of Thomas Franklin, the following tax information was used to arrive at taxable
Gross salary, interest earnings, dividend income, 1 personal exemption, itemized
deductions, and adjustments to income.
To arrive at the amount he would have to report as taxable income, he added gross salary,
dividend income, and interest earnings, then subtracted adjustments to income, Itemized
deductions and the personal exemption.