PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337117005
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Chapter 3, Problem 11FPE
Summary Introduction
To discuss: The tax planning ideas for person M.
A taxable income is termed to any person's or business' remuneration that is utilized to decide tax liability. The gross income or total income is utilized as the origin to ascertain the amount of taxes an individual or a business owes to the government for the regular tax period.
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Evaluate the three strategies reducing income, increasing deductions, and taking advantage of tax credits that you listed based on their overall effect on a person's tax situation (the amount of income taxes that the person will have to pay). Evaluate the ethical issues related to the payment of income taxes. in other words, if there is a legal tax-saving strategy available to a person who earns $50,000 per year, will it be ethical for the person to utilize this strategy in order to pay less tax? State how your answer to the previous question would change if the person were making $1,500,000.
(5) Applying the following hypothetical Federal Income Tax Rate Table, for a Single Tax-Filer earning $100,000 annually, calculate the following (Show your Calculations):
a) Total Tax Due?
b) Marginal Tax Rate?
c) Effective Tax Rate?
What is the average tax rate for 2018 please explain briefly. I prefer with an excel spreadsheet showing the equations
Thank you,
Chapter 3 Solutions
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
Ch. 3 - Discuss the basic principles of income taxes and...Ch. 3 - Prob. 2LOCh. 3 - Prob. 3LOCh. 3 - Explain who needs to pay estimated taxes, when to...Ch. 3 - Know where to get help with your taxes and how...Ch. 3 - Implement an effective tax planning strategy.Ch. 3 - Calculating marginal tax rates. Piper Wells is...Ch. 3 - ESTIMATING TAXABLE INCOME, TAX LIABILITY, AND...Ch. 3 - Prob. 3FPECh. 3 - Prob. 4FPE
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- Effective tax planning. Denise Hughes reports the following data from her 2018 tax return. Analyze the data and suggest tax planning ideas that she should consider. Note: The interest income is from a bank savings account earning 1%. The dividends are from a stock paying 3 percent dividends.arrow_forwardBased on 2011 tax rates provided, use a calculator to compute how much would be withheld from Joness November paycheck in the following three cases (round to the nearest penny):arrow_forwardUse the 2016 marginal tax rates to compute the tax owed by a head of household with a taxable income of $78,000 and a $6000 tax credit.arrow_forward
- Use the 2016 marginal tax rates to compute the tax owed by the following person. A single man with a taxable income of $14,000 and a $3500 tax credit Click the icon to view the 2016 marginal tax rates. ..... The tax owed is dollars. (Type an integer or a decimal. Round to the nearest cent as needed.)arrow_forwardUse the 2016 marginal tax rates to compute the tax owed by the following person. A head of household with a taxable income of $129,000 and an $8000 tax credit The tax owed is $arrow_forwardThere are a number of tax planning strategies. Discuss the different strategies and how you plan to incorporate them into your financial plan currently or in the future. Responses are a minimum of 150 wordsarrow_forward
- Your qualitative answers should be written in full sentences with depth to your responses when needed. For questions and problems requiring computations, you need to share your supporting calculations. 1a. Jim files his return one month after the due date and pays the remaining $8,000 of tax owed by him. What are his delinquency penalties? 1b. Why is income-shifting considered such a major tax planning concept? 1c. Olivia is being audited by the IRS. The revenue agent determines that certain expenses that were deducted on her return are not valid, and he accordingly makes adjustments to her tax liability. Upon receipt of her 30-day letter, she phones you, a CPA, for advice regarding possible future action on the matter. What options would you discuss with Olivia? 1d. Compute the taxable income for 2020 under each of the following circumstances: Jim is married and files a joint return. Jim and his wife have two dependent children. They have adjusted gross income of $30,000 and…arrow_forwardUse the information in Table 1-3. If the federal tax system was changed to a proportional tax rate structure with a tax rate of 17%, calculate the amount of tax liability for 2018 for all taxpayers. How does this amount differ from the actual liability? Graded on the following: Calculates tax liability for yearly taxpayers indicating how amounts differ from the actual liability.arrow_forwardEvaluate the ethical issues related to the payment of income taxes. in other words, if there is a legal tax-saving strategy available to a person who earns $50,000 per year, will it be ethical for the person to utilize this strategy in order to pay less tax? State how your answer to the previous question would change if the person were making $1,500,000.arrow_forward
- Lisa has sent through the following information. Can you pull this togetherwith what you have examined already so we can have a tax estimate readyto go. B.1 Calculate Lisa’s Medicare Levy Surcharge. Show all workings. B.2 Calculate Lisa’s Net Tax Payable. Show all workings. Wages (Melbourne employment) - $125,000 net wages, PAYG withheldof $43,000 plus a bonus of $5,000 was paid. Wages (Darwin employment) - $25,000 net wages, PAYG withheld of$1,500 Interest income $1,000Allowable general deductions $3,300 Allowable specific deductions $1,000 Lisa is single with no private health insurance. Lisa has no reportable fringe benefits or reportable superannuationcontributions.arrow_forwardUse the table to calculate how much money Lizzie will owe in taxes under a progressive tax program. Give your answer to two decimals. Calculate how much money Lizzie will owe in taxes under a proportional, or flat, tax rate of 30%30%. Give your answer to two decimals.arrow_forwardCompute for the tax due in each of the following cases. Show your computation and highlight your final answer. Please answer items 1 to 5. Thank you!arrow_forward
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