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20 Cards in this Set

  • Front
  • Back
What is the act that followed after the 16th admendment, it allows tax collection and surtax directly?
Revenue Act of 1913
What kind of tax rate structure is used in the US?
Used to acheive economical, political, and social goals
Tax Laws
Who does federal income tax apply directly to?
Individual taxpayers, regular corporations, estates, and trusts
Federal income tax applies indirectly to these groups.
Flow-through entities which are partnerships and S corporations
This determines tax liability after computing taxablable income
Tax rate
The five filing groups.
Single, HOH, married joint, married separate, surviving spouse
Reduces tax liability in chunks.
Tax credit
Reduces tax liability in fractional amounts, because it depends on the tax bracket.
What is gross income?
All wealth that flows to a taxpayer from whatever source derived.
Subtracted from gross income to arrive at AGI.
above the line or for deduction
Subtracted from AGI to get taxable income.
below the line or from deduction
These groups do not compute AGI.
Corporations, partnerships, estates, and trusts, so ones who do are individuals
What are ways to reduce AGI?
Itemized deductions, standard deductions, personal exemptions, and dependency exemptions
Types of standard deductions.
Basic and Additional
This deduction is replaced by the other when the other exceeds its total.
This deduction is used to avoid keeping detailed records.
A situation where the deduction used needs to be consistent.
Married filing separate
These fall under itemized deductions.
Personal Expenses
This amount is for dependents who is using basic standard deduction.
Greater of 800 or earned income plus 250