Personal Finance (MindTap Course List)
13th Edition
ISBN: 9781337099752
Author: E. Thomas Garman, Raymond Forgue
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 3BYOPFM
Summary Introduction
To determine: The relevant steps in filing an income tax return to obtain a tax refund.
Introduction:Tax return is about completing the relevant documentation that will calculate an individual’s or entity’s income earned with the amount of tax payable to the government. This will be done in order to calculate the taxpayer’s tax liability, schedule tax payments or even to request for the tax refunds for the overpayment of taxes.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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.
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…
Mr. Sia is working as a freelance professional in SDN Corporation. He is earning professional fees amounting to Php60,000.00 per month and is a Non-VAT registered.
a. During the filing of his First Quarter Income Tax Return, which method of computing income tax is more advantageous? Justify your answer.
b. During the filing of his Annual Income Tax Return, which method of computing income tax is more advantageous? Justify your answer.
Chapter 4 Solutions
Personal Finance (MindTap Course List)
Ch. 4.1 - Prob. 1CCCh. 4.1 - Prob. 2CCCh. 4.1 - Explain why some taxpayers have an effective...Ch. 4.2 - Prob. 1CCCh. 4.2 - Prob. 2CCCh. 4.2 - Prob. 3CCCh. 4.2 - Prob. 4CCCh. 4.2 - Prob. 5CCCh. 4.2 - Prob. 6CCCh. 4.2 - Prob. 7CC
Ch. 4.3 - Distinguish between two major types of...Ch. 4.3 - Prob. 2CCCh. 4.3 - Prob. 3CCCh. 4.3 - Prob. 4CCCh. 4 - Calculate Tax Liability. What would be the tax...Ch. 4 - Prob. 2DTMCh. 4 - Determine Tax Liability. Find the tax Liabilities...Ch. 4 - Use Tax Rate Schedule. Jared Goff, of Los Angeles,...Ch. 4 - Use Tax Rate Schedule. Carson Wentz, of...Ch. 4 - Review Figure 4-1 on page 117 and comment on the...Ch. 4 - The Johnsons Calculate Their Income Taxes Several...Ch. 4 - Prob. 2FPCCh. 4 - Prob. 3FPCCh. 4 - Prob. 4FPCCh. 4 - Taxable Versus Tax-Exempt Bonds Paxton Lynch,...Ch. 4 - Prob. 6FPCCh. 4 - Prob. 3BYOPFM
Knowledge Booster
Similar questions
- 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_forwardRefer to the previous problem 8. If Stan's parents elected to report Stan's income on his parents' return, what would the tax on Stan's income be?arrow_forwardYou already understand that, given a choice between a $1,000 tax deduction and a $1,000 tax credit, you would opt for the credit every time. But how about as be-tween above-the-line (“for AGI”) and below-the-line (“from AGI”) deductions? As between a $1,000 “for AGI” deduction and a $1,000 itemized / “from AGI” deduction, which would you generally prefer to have, and why? Note: As CPAs we’re big on time-efficiency, so we’re also big on acronyms. It takes way too long to say (or type) “adjusted gross income.” We prefer “AGI” instead.arrow_forward
- Shafron, Inc. is a calendar year-end, cash method taxpayer. It provides consulting services for various clients in the local community. Shafron, Inc. had the following transactions in 2020. Determine the tax treatment for each transaction. For credit, you must round your answer to the NEAREST DOLLAR. Do NOT enter the dollar sign in your answer - only enter the numbers (e.g., X,XXX). For example, one thousand dollars should be entered as 1,000. Enter zero (i.e., “0”) where necessary. (a) On March 15, 2020, Shafron, Inc. received $30,000 from JBD, Inc. for business consulting services. Shafron, Inc. estimated the project will take 6 months and began working on the project on April 1, 2020. How much (if any) of the payment is included in Shafron, Inc.’s gross income? $ (b) Shafron, Inc. purchases an 18-month liability insurance policy. Per the contract with the insurance company, Shafron, Inc. paid the entire cost of the insurance coverage ($36,000) on November 1, 2020. The coverage…arrow_forwardYou understand that, given a choice between a $1,000 tax deduction and a $1,000 tax credit, you would opt for the credit every time. But how about as be-tween above-the-line (“for AGI”) and below-the-line (“from AGI”) deductions? As between a $1,000 “for AGI” deduction and a $1,000 itemized / “from AGI” deduction, which would you generally prefer to have, and why?arrow_forwardHepfer, Inc. is a calendar year-end, accrual method taxpayer. It provides financial services for various clients. Hepfer, Inc. had the following transactions in 2020. Determine the tax treatment for each transaction. For credit, you must round your answer to the NEAREST DOLLAR. Do NOT enter the dollar sign in your answer - only enter the numbers (e.g., X,XXX). For example, one thousand dollars should be entered as 1,000. Enter zero (i.e., “0”) where necessary. (a) Hepfer, Inc. rents a small single house in downtown Dallas and uses it as the business office. On June 15, 2020, Hepfer, Inc. paid $24,000 for the next 12 months of rent. The rental period associated with the payment starts on July 1, 2020. How much (if any) of the payment can Hepfer, Inc. deduct in 2020? $arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
PFIN (with PFIN Online, 1 term (6 months) Printed...FinanceISBN:9781337117005Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning
PFIN (with PFIN Online, 1 term (6 months) Printed...
Finance
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Cengage Learning