...Table of Contents Introduction 2 1.1 Describe the UK tax environment to Shawn 3 1.2 Analyse the role and responsibilities of you as the tax practitioner in the contexts of UK tax system. 7 1.3 Explain the tax obligations of tax payers or their agents and the implications of non-compliance 9 2.1 Calculate relevant income, expense and allowances 10 2.2 Calculate taxable amounts and tax payable, for employed and self-employed individuals, and advise on payment dates 11 2.3. Complete relevant documentation and returns 12 Conclusion 13 Reference 14 Introduction UK tax environment are many problems for a British citizen who has plans to start a new business in the UK. Being a new businessman and had no direct background about the UK tax systems rules and procedures, Based on the information in the scenario, we research in the UK tax environment according to the factors following: the environment, the role and the responsibility of the UK tax practitioners, tax system, explain the tax obligations of tax payers or their agents and the implications of non- compliance, Calculate the relevant income, expenses and allowances, Calculate taxable amounts and tax payable, for employed and self-employed individuals, and advise on payment dates for the above cases, complete the relevant documentation and tax returns. 1.1 Describe the UK tax environment to Shawn 1.1.1 UK tax legislation: The tax which is regulation set to apply for citizen in UK with the...
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...claim the Lifetime Learning tax credit. Below is the income phase-out range for the year 2011: • $51,000 to $61,000 : Single, Head of Household, or Qualifying Widow • $102,000 to $122,000 : Married Filing Jointly The Lifetime Learning Credit is a tax credit for any person who takes college classes. It provides a tax credit of 20% of tuition expenses, with a maximum of $2,000 in tax credits on the first $10,000 of college tuition expenses. You can claim the Lifetime Learning Credit on your tax return if you, your spouse, or your dependents are enrolled at an eligible educational institution and you were responsible for paying college expenses. Unlike the American Opportunity credit, you need not be in the first four years of undergraduate classes. Even if you took only one class, you may take advantage of the Lifetime Learning Credit. The American Opportunity Tax Credit is a refundable tax credit for undergraduate college education expenses. This credit provides up to $2,500 in tax credits on the first $4,000 of qualifying educational expenses. The tax credit is scheduled to have a limited life span: it will be available only for the years 2009 through 2012, unless Congress decides to extend the credit to other years. American Opportunity credit applies to all four years of undergraduate college education. The credit is gradually reduced (or "phased out") for income from $80,000 to $90,000 (or $160,000 to $180,00 for joint filers). The tax credit is not available for...
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...PERSONAL INCOME TAX RATES Assessment Year 2010, 2011 and 2012 Chargeable Income | Calculations (RM) | Rate % | Tax(RM) | 0-2500 | On the First 2,500 | 0 | 0 | 2,501-5,000 | Next 2,500 | 1 | 25 | 5,001-10,000 | On the First 5,000 Next 5,000 | 3 | 25 150 | 10,001-20,000 | On the First 10,000 Next 10,000 | 3 | 175 300 | 20,001-35,000 | On the First 20,000 Next 15,000 | 7 | 475 1,050 | 35,001-50,000 | On the First 35,000 Next 15,000 | 12 | 1,525 1,800 | 50,001-70,000 | On the First 50,000 Next 20,000 | 19 | 3,325 3,800 | 70,001-100,000 | On the First 70,000 Next 30,000 | 24 | 7,125 7,200 | Exceeding 100,000 | On the First 100,000 Next RM | 26 | 14,325 .......... | Assessment Year 2009 Chargeable Income | Calculations (RM) | Rate % | Tax(RM) | 0-2500 | On the First 2,500 | 0 | 0 | 2,501-5,000 | Next 2,500 | 1 | 25 | 5,001-10,000 | On the First 5,000 Next 5,000 | 3 | 25 150 | 10,001-20,000 | On the First 10,000 Next 10,000 | 3 | 175 300 | 20,001-35,000 | On the First 20,000 Next 15,000 | 7 | 475 1,050 | 35,001-50,000 | On the First 35,000 Next 15,000 | 12 | 1,525 1,800 | 50,001-70,000 | On the First 50,000 Next 20,000 | 19 | 3,325 3,800 | 70,001-100,000 | On the First 70,000 Next 30,000 | 24 | 7,125 7,200 | 100,001-150,000 | On the First 100,000 Next 50,000 | 27 | 14,325 13,500 | 150,001-250,000 | On the First 150,000 Next 100,000 | 27 | 27,825 27,000 | Exceeding 250,000...
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...What are the Challenges in Designing an Effective Personal Income Tax System? Introduction Taxation, as a primary media of the implementation of fiscal policies of various national governments, generally has three primary functions, which come as follow: * Raise funds as a main source of fiscal income of national governments * Stabilize the market and macro economy against market failure * Distribute and redistribute the income among individuals to reduce social wealth inequality The priority of those functions varies from country to country and changes in different phases of social and economic development. For most developing countries, the widening gap between the rich and the poor is not only a major economic issue arousing public concern but also a major social issue. The developed west, yet is in need of effective taxation system to tackle with problems such as everlasting heavy deficit and dim market outlook. Table 1 World Gini Indexes for Major Global Economies in 1990, 2000 and 2010 Year | U.S. | Canada | U.K. | Switzerland | Germany | France | Russia | China | Brazil | India | Japan | 1990 | 42.8 | 35.2 | 36.5 | 34.1 | 34.2 | 29.2 | 25.9 | 32.7 | 60.4 | 31.2 | 26.4 | 2000 | 44.2 | 33.3 | 37.5 | 33.4 | 30.3 | 31.1 | 42 | 40.7 | 58.5 | 32 | 27.6 | 2010 | 47 | 33.6 | 35.9 | 32.4 | 30.5 | 33.2 | 35.9 | 48.1 | 49.5 | 35.6 | 32.1 | Among the taxes of all kinds, personal income tax is one of the most effective monetized tools targeting at individual...
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...TAXATION PERSONAL INCOME TAX IN THE UNITED STATE Group’s member:Nguyễn Như Nam (C)Phan Thu AnNguyễn Thùy DungHoàng Bá SơnNgô Thị Ánh TuyếtDate: 15/12/2014 | Table of Contents PART 1. The review on the tax system in the United States 2 1. The tax administration system in United States 2 2. The tax policy system in United States 3 PART 2. The review of the main content of the tax laws 5 I. The scope of application 5 1. Taxable incomes 5 2. Non-taxable 7 3. Payers. 7 II. The taxation bases 9 III. The tax calculation method 10 1. Gross Income 10 2. Adjusted gross income 17 3. Tax Credits 17 4. Tax Rates 20 5. Deductions and exemptions 22 IV. Tax declaration, submission and refund 32 1. Declaration 32 2. Submission 33 3. Refund 34 REFERENCES 36 PART 1. The review on the tax system in the United States Taxation is an important for each country. Taxation provides a material to distribute economic resources towards those with low incomes or special needs. Taxes provide the revenue needed for critical public services such as social security, health care, national defense, and education. 1. The tax administration system in United States The U.S. system of tax administration is based on the principle of self-assessment. In a self-assessment system, taxpayers calculate and pay their own taxes without the intervention of a tax official. If this is not done appropriately and within the prescribed timeframes, the tax administration...
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...sufficient to defray its budgetary requirements. 7. True 8. True 9. False. Basically, taxes imposed are based on the ability of the taxpayer to pay. 10. False. It is the primary obligation of the state to protect all the constituents regardless of whether they pay or not their tax liabilities. True or False 1-2 1. True 2. True 3. True 4. True 5. True 6. False. The President cannot delegate the power of taxation, since taxation is not vested in the President. Taxation is vested in the legislative body. 7. False. Taxation cannot be separated from the state. The moment a state exists, taxation also exists. 8. False. The making of tax law is undertaken ahead of the collection of taxes. 9. False. Levying refers to the making of tax laws. 10. False. Only the legislative body, the Congress, can grant tax exemptions. True or False 1-3 1. False. It is the legislative branch of the government that is vested with the power of taxation. 2. False. The power of taxation is restricted by inherent and constitutional limitations. 3. False. Tax assessment is the valuation and determination of the amount of tax. The passage of taxation is called levying or imposition of tax. 4. False. The three inherent powers can be and have been delegated by the Legislative to the Executive Branch. 5. True 6. True 7. False....
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...Taxation 1 – Assignment 1 Q1) 1-7 Net Income for Tax Purposes Case A: Income Under ITA 3(a) Employment Income $46,200 Business Income $13,500 Property Loss (see ITA 3(d) below) NIL $59,700 Income Under ITA 3(b) Taxable Capital Gains $14,320 Allowable Capital Losses ($23,460) NIL Balance from ITA 3(a) And (b) $59,700 Subdivision e deductions ($4,800) Balance under ITA 3(c) $54,900 Deduction Under ITA 3(d): Property Loss ($2,350) Net Income for Tax Purposes (Division B Income) $52,550 As the Gambling winnings and losses related to an occasional gambling habit, the income is non-taxable and the losses non-deductible. There will be an allowable Capital Loss carry over of $9,320 (14,320 – 23,460 = ) Case B: Income Under ITA 3(a) Employment Income $64,000 Business Income (see ITA 3(d) below) $NIL Interest Income $ 2,600 Property Income $ 4,560 $ 71,160 Income Under ITA 3(b) Taxable Capital Gains $32,420 Allowable Capital Losses ($29,375) $ 3,045 Balance from ITA 3(a) And (b) $ 74,205 Subdivision e deductions ($12,480) Balance under ITA 3(c) $ 61,725 Deduction Under ITA 3(d): Business (50% of partnership) ($72,470) Net Income for Tax Purposes (Division B Income) $NIL There is no Capital Loss to carry over as the Capital Gains exceeded the Capital losses in the year, using up the entire deduction....
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...x Chapter 1 Summary of End-of-Chapter Problem Revisions |2012 Edition |2011 Edition | | |Problem Number |Problem Number |2012 Edition Modifications | |1 |1 | | |2 |2 | | |3 |3 | | |4 |4 | | |5 |5 | | |6 |6 | | |7 |7 | | |8 |8 | | |9 |9 | ...
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...a reduction of taxable income. | |[pic] |C. The bond's basis is reduced by the amortization. | | |An individual taxpayer who has elected to amortize the premium on a bond that yields taxable interest may reduce the | | |bond's basis by the amortization of the premium. In addition, the amount of bond premium attributable to the tax year | | |may be used to offset interest received on the bond in computing the taxpayer's taxable income. | | |This response correctly states that the bond's basis is reduced by the amortization. | |[pic] |D. The bond's basis is increased by the amortization. | |Question #2 (AICPA.921101REG-P2-AR) | |[pic] | Alex and Myra Burg, married and filing joint income tax returns, derive their entire income from the operation of their retail candy shop. Their 2010 adjusted gross income was $50,000. The Burgs itemized their deductions on Schedule A for 2010. The following unreimbursed cash expenditures were among those made by the Burgs during 2010: |Repair and maintenance of motorized wheelchair for physically handicapped dependent |$ 300 | |child ...
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...Subject to constitutional and inherent restrictions, the power of taxation is regarded as comprehensive, unlimited, plenary and supreme. Scope of Legislative Taxing Power 1. Amount or rate of tax 2. Apportionment of the tax 3. Kind of tax 4. Method of collection 5. Purpose/s of its levy, provided it is for public purpose 6. Subject to be taxed, provided it is within its jurisdiction 7. Situs of taxation TAXES – enforced proportional contributions from the persons and property levied by the law-making body of the State by virtue of its sovereignty in support of government and for public needs. Characteristics of Taxes 1. forced charge; 2. pecuniary burden payable in money; 3. levied by the legislature; 4. assessed with some reasonable rule of apportionment; (see theoretical justice) 5. imposed by the State within its jurisdiction; 6. levied for a public purpose. Requisites of A Valid Tax 1. should be for a public purpose 2. the rule of taxation shall be uniform 3. that either the person or property taxed be within the jurisdiction of the taxing authority 4. that the assessment and collection of certain kinds of taxes guarantees against injustice to individuals, especially by way of notice and opportunity for hearing be provided 5. the tax must not impinge on the inherent and Constitutional limitations on the power of taxation Theories and Bases of Taxation 1....
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...Contents Introduction2 Detail 3 Task 1 3 Task 213 Task 319 Task 420 Conclusion27 Reference27 INTRODUCTION We are in business as tax practitioner and have recently gained three new clients. They are Simon - a manager working for Able plc, Oliver Green - a self-employed running a health food shop and a corporation operating in UK. We are assigned to help them calculate their relevant income, expense and allowance, income tax payable for the tax year 2006/07, capital gain tax payable, the profit chargeable to corporation tax, corporation tax liability and give them some advices to reduce the personal tax liability. TASK 1 Simon was born in May 14, 1954 and is a manager working for Able plc, a large UK resident company. Accordingly, in the period 2006 – 2007, he was 53 years old. As a result, his personal allowance (PA) for 2006/07 is £5,035. In the period 2006 – 2007, Simon received a gross salary of £45,000 and in February 16, 2007 he received a bonus of £5,000 based on Able plc’s results for the year ended December 31, 2006. His earning is higher than £8,500. Therefore, in this case, special rules for P11d employees will be applied. The main benefits for the special rules exist are: (a) Assets loaned to the employee for private use (b) Ancillary services connected with living accommodation (c) Cars provided for private use (d) Fuel provided for private use (e) Vans provided for private use (f) Beneficial loans Furthermore, Simon received the following benefits...
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...History of U.S. Taxation A. An income tax on individuals was used to provide financing for the Civil War. ألغى then the war ended, the tax was repealed . In 1894, a new individual income tax was enacted سنت but the Supreme Court held the tax to be unconstitutional. After a constitutional challenge to the taxation of income, the Sixteenth Amendment, this sanctioned both the federal individual and corporate income taxes, عقوبات was ratified in 1913. The present income tax on individuals was enacted in 1913. The corporate income tax, which was originally adopted in 1909, withstood صمدت constitutional challenge because it was viewed as an excise tax, not a direct tax. ضريبة المكوس B. Numerous revenue acts, which rewrote completely the federal tax provisions, were enacted between 1913 and 1939. These provisions were reorganized and included, in a more permanent form, in the Internal Revenue Code of 1939. Thereafter, tax laws were changed when Congress adopted amendments to the 1939 Code; a complete rewriting of the laws was unnecessary. A revised Internal Revenue Code was adopted in 1954. The 1954 Code was the controlling body of tax law until 1986. In 1986, Congress enacted the most comprehensive overhaul of the Internal Revenue Code in over thirty years. As a result of the massive changes contained in the new law, the federal tax code was renamed the Internal Revenue Code of 1986. Nevertheless, many of the provisions of the 1954 Code were carried over to the...
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...Manuel Marroquin Tax Regulation Summary Acct: 835 – Tax Research Payment of Internal Revenue Taxes by credit card and debit card: A taxpayer is allowed to pay their internal revenue taxes with their credit card and debit card. Payment of internal revenue taxes using a credit card or debit card must be approved by the Commissioner. In addition, tax payments must adhere to the manner and be in accordance with the forms, instructions and procedures prescribed by the Commissioner. Also, the Commissioner will specify the types of tax liabilities that may be paid by credit card or debit card. Furthermore, all references to tax also include interest, penalties, and additional amounts, and additions to tax. Credit Card and Debit Card Definitions: The term credit card includes any credit card as defined in section 103(k) of the Truth in Lending Act, which includes any credit card, charge card, or any other credit device issued for the purpose of acquiring money, labor, property, or services on credit. In addition, the term debit card includes any accepted card or any other means of accessing funds electronically as defined in section 903 of the Electronic Fund Transfer Act. This includes any debit card or similar device which has direct access to an account with the capability to initiate electronic fund transfers to obtain money, labor, services, or property. When the payment is deemed made: If the taxpayer decides to pay their taxes using a credit card or debit...
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...Research Problem 1 1. Discuss the different types of interests and the IRS rule related to the deductibility of each type for tax purposes. Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. There are different types of interests, including investment interest, qualified residence interest, student loan interest, and personal interest, which are either deductible or nondeductible. Personal interests are interests on car loans, credit cards, loans for appliances and furniture and interest on loans made by one person to another. Personal interest is nondeductible. If interest is paid on a qualified student loan, taxpayers may be able to deduct the interest as deduction for AGI. Generally, the allowable amount for student loan is lesser of $2,500 or the amount of interest taxpayer actually paid. Investment interest is interest paid on money borrowed to purchase or hold investment property. It is tax deductible on income tax return up to the amount of the net investment income. However, if the interest is incurred to produce tax exempt income, it cannot be deducted. Investment interest is not any qualified home mortgage interest or any interest taken into account in computing income or loss from a passive activity. The qualified residence interest is interest taxpayer pays on a loan secured by one’s main home or a second home. The loan may be a mortgage to buy primary home, a second mortgage, a home equity loan, or line...
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...demonstrate how Blanca’s strategy will enhance the value of the firm and ultimately increase Aurora Borealis’ initial investment. Case Study Questions Based on the theory and research papers read during the semester, the following is an analysis of the effects of issuing $3 billion of new debt and using the proceeds either to pay a dividend or to repurchase shares on: 1. Wrigley’s outstanding shares? a. A firm can leverage debt to maximize profitability which will allow the firm to compete in a competitive market (DeAngelo & Masulis, 1979). b. The debt will increase the value of a company using shielding cash flows from taxes. c. Masulis believed the price of the stock goes up after a stock repurchase due to a personal tax savings effect, “a reduction in corporate taxes due to increased leverage, and transfers of wealth across and within security classes” (Masulis, 1980b). 2. Wrigley’s book value of equity...
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