Many tax preparation firms offer their clients a refund anticipation loan (RAL). For a fee, the firm will give a client his refund when the return is filed. The loan is repaid when the Internal Revenue Service sends the refund directly to the firm. Thus, the RAL fee is equivalent to the interest charge for a loan. The schedule in the table on the right is from a major RAL lender. Use this schedule to find the annual rate of interest for a $4,321 RAL, which is paid back in 30 days. RAL Amount $0-$500 $501-$1,000 $1,000-$1,500 $1,501-$2,000 $2,001 - $5,000 (Assume a 360-day year.) RAL Fe $29.00 $39.00 $49.00 $69.00 $89.00

Many tax preparation firms offer their clients a refund anticipation loan (RAL). For a fee, the firm will give a client his refund when the return is filed. The loan is repaid when the Internal Revenue Service sends the refund directly to the firm. Thus, the RAL fee is equivalent to the interest charge for a loan. The schedule in the table on the right is from a major RAL lender. Use this schedule to find the annual rate of interest for a $4,321 RAL, which is paid back in 30 days. RAL Amount $0-$500 $501-$1,000 $1,000-$1,500 $1,501-$2,000 $2,001 - $5,000 (Assume a 360-day year.) RAL Fe $29.00 $39.00 $49.00 $69.00 $89.00

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter12: Alternative Minimum Tax

Section: Chapter Questions

Problem 5RP

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Many tax preparation firms offer their clients a refund anticipation loan (RAL). For a fee, the firm will give a client his refund when the return is filed. The loan is repaid when the Internal Revenue Service sends the refund directly to the firm. Thus, the RAL fee is equivalent to the interest charge for a loan. The schedule in the table on the right is from a major RAL lender. Use this schedule to find the annual rate of interest for a $579 RAL, which is paid back in 26 days. RAL Amount RAL Fee $0 - $500 $29.00 $501 - $1,000 $39.00 $1,000 - $1,500 $49.00 $1,501 - $2,000 $69.00 $2,001 - $5,000 $89.00 (Assume a 360-day year.) What is the annual rate of interest for this loan? (Round to three decimal places.)
Which of the following is true? a. Business taxpayers with annual sales or receipts higher than the VAT threshold who opted to register as VAT taxpayers cannot register back as non-VAT because of the three-year lock-in period. b. A VAT taxpayer may also be subject to other percentage taxes and excise taxes provided a range of goods and services offered. c. The basis on imposing a consumption tax on the sale of services is the quarterly sales. d. Exportation made by business taxpayers normally subject to the general percentage tax is taxable for consumption taxes. e. All of the other choices is incorrect.
Which of the following would be a good question to ask before advising a client to move from a Schedule C to S corporation tax treatment? Review Later How does moving to S corp tax treatment impact the ability to pump tons of money into a tax-deferred retirement plan? What really are the net savings, after accounting for all the extra fees attached to operating an S corporation? Is this client likely to actually do the compliance stuff associated with operating an S corporation, or is the "extra red tape" possibly (read: probably) going to become a nightmare for the client?.
As a tax consultant you receive on continuous basis inquiries and tax forms from your clients. Following are independent inquires that you have to check and reply back to your clients. For each enquiry below, Comment on whether the given calculations are correct or not by providing the necessary calculations. a-Government A decided to increase the income tax rate from 12% to 16% in year 2021. The total tax base for the year 2020 is $4,200,000. The government is expecting to collect $169,000 additional revenue in year 2021. Quarter of the individual taxpayers decided to quit. The government collected $ 169,000 additional tax revenue.
Perkin Corporation has determined that it qualifies for a tax credit in the amount of $120,000. For the current year, it has tax liability before credits of $75,000. It expects at least that amount of tax liability next year. Required: If the excess credit is not refundable but may be carried forward, calculate the value of the credit. Assume Perkins uses a 4 percent discount rate to calculate present value. If the excess credit is refundable, what is the value of the credit?
Under a self-assessment system, taxpayers are required to: i. file estimated income tax returns. ii. make quarterly estimated payments. iii. file final annual income tax return; and pay the difference between the estimated income tax return and the final tax return, if any. iv. Wait until the Commissioner sends an assessment to pay their taxes.