Ch_3_Questions - Income Tax I Name _Christian Yimgnia_...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Income Tax I Name ____Christian Yimgnia_______ Chapter 3 Questions Explain and/or discuss the following based on reading the chapter and viewing the power points. Be thorough with your answers. You may take all the space you need. 1. Components of tax formula The components of tax formula include, adding gross income, less deductions for adjusted gross income, equaling adjusted gross income, less greater of itemized deductions or standards deduction, less personal exemptions, equaling taxable income. Then we times that with the tax rate, which equals the tax liability, less the tax credits and prepayments, equaling the tax due of refund. 2. Gross income The gross income includes all items of income from whatever source unless specifically excluded. Compensation for services, interest, rents, royalties, dividends and annuities are examples of gross income. 3. Deductions for adjusted gross income Adjusted gross income is the gross income that has been subtracted by specific deductions allowed by law. Some of those deductions for adjusted gross income include trade or business expense, such as advertising and depreciation, certain reimbursed employee expenses such as travel and transportation, moving expenses, losses from sale or exchange in property. 4.
Background image of page 1

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

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/15/2011 for the course INCOME TAX 4404 taught by Professor Bulie during the Spring '11 term at University of Minnesota Duluth.

Page1 / 3

Ch_3_Questions - Income Tax I Name _Christian Yimgnia_...

This preview shows document pages 1 - 2. Sign up to view the full document.

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