Download Midterm 1 Study Guide for Tax Policy and Financial Planning | ACE 346 and more Exams Agricultural engineering in PDF only on Docsity! Jarrett Golman 2/11/12 ACE 346 Midterm 1 Study Guide Textbook=Fundamentals of Income Taxation Chapter 1 Two types of tax services available in area of federal income tax=(Annotated & Topical) CCH=publishes federal Tax Articles (Standard Federal Tax Reporter) RIA=Research Institute of America Host of periodicals that publish tax articles BNA=Bureau of National Affairs Chapter 2 Source of federal income tax law=the people Congress exercises Internal Revenue Code Constitution written in 1787 ratified in 1789 16th Amendment=Congress shall have the power, to lay and collect taxes on income, from whatever source derived…. 1939 federal tax law codified and entitled Internal Revenue Code of 1939 Code is now called Internal Revenue Code of 1986 but numerous changes have been made since then. Legislative(Enacts Law) Executive=(Enforces Law) Judicial=(Interprets Law) Code=contains seven subtitles. Subtitle A=income tax Subtitle B= estate &gift taxes rest=other areas of taxation. Individual taxpayers =file returns by April 15th Corporations=file returns by March 15th U.S. Court of Appeals=second highest level in the court system Chapter 3 Gross income=income which must be included on a taxpayer’s income tax return. Income=subject to income taxation . Income to be taxable=income must be “realized”/obtained by the taxpayer. Income does not have to be received in cash in order to be taxable. Cash basis method of accounting=individual reports income year it’s received Doctrine of Constructive Receipt=a doctrine by which income becomes taxable to a cash basis taxpayer in the year that it is constructively received although it may not be in the taxpayer’s possession. Economic Benefit Theory=Doctrine that holds that any economic or financial benefit conferred on an employee is taxable as compensation regardless of the form or mode by which it is conferred. Assignment of Income=A principle that requires the taxpayer whose personal efforts generate income or who is the owner of property that generates income to include the income on his or her own tax return. Chapter 4 Taxpayer’s gross income= all items of income received by the taxpayer during the year minus all available exclusions from gross income. Adjusted Gross Income(AGI)=Gross income minus all allowable above the line deductions. Above the Line Deductions=Deductions taken from gross income in determining adjusted gross income. Below the Line Deductions=Deductions taken from adjusted gross income in determining taxable income Standard deduction amounts Married filing jointly=$11,600 Unmarried head of household=$8,500 Single=$5,800 Married filing separately=$5,800
