ACC 350 Study Guide - Tax Competition, Income Tax, Internal Revenue Service

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silvermallard364

30 Oct 2014

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Describe the three primary sources of federal tax law. Taxpayer = any person or organization that pays a tax (includes individuals and corporations) Incidence refers to ultimate economic burden of a tax. May not be the person who nominally pays a tax. Jurisdiction is the right of a government to tax. Sales & use taxes: broad-based but, typically often excludes necessities (e. g. , food, prescription drugs, personal responsibility for use tax, effects of catalogs and internet purchases. Excise tax special rates, often imposed on the sale of specific goods and services: e. g. , cigarettes, gasoline, telephone, etc, hotel and motel accommodations. Excise taxes (luxury, so-called sin taxes, transportation, communication) First incometax enacted to pay for civil war in. First permanent income tax passed in 1894, but struck down by supreme court. Sixteenth amendment ratified in 1913 created the current income tax. Internal revenue code was created in 1939 and underwent recodification in 1954 and 1986.

Related Questions

To maintain exempt status, an organization must do which of thefollowing:

A. Satisfy only an organizational test.

B. Satisfy only an operational test.

C. Satisfy both an organizational test and an operationaltest.

D. Satisfy a financial test.

E. Once exempt status is granted, it will continue regardless ofwhether the organizational test and the operational test aresatisfied.

In determining state taxable income, all of the following areadjustments to Federal income except:

	A.	A Federal net operating loss.
	B.	Federal income tax expense.
	C.	Dividends received from other U.S. corporations.
	D.	Wages paid to officers and executives.

Under P.L. 86-272, which of the following transactions by itselfwould create nexus with a state?

	A.	Inspection by a sales employee of the customerâs inventory forspecific product lines.
	B.	Using an independent contractor who acts as a manufacturerâsrepresentative for the taxpayer through a sales office in thestate.
	C.	Executing a sales campaign, using an advertising agency actingas an independent contractor for the taxpayer.
	D.	Maintenance of inventory in the state by an independentcontractor under a consignment plan.

In conducting multistate tax planning, the taxpayer should:

	A.	Review tax opportunities in light of their effect on the overallbusiness.
	B.	Exploit inconsistencies among the taxing statutes and formulasof the states.
	C.	Consider the tax effects of the plan after accounting for anynew compliance and administrative costs that it generates.
	D.	All of the above are true.

For most taxpayers, which of the traditional apportionmentfactors yields the greatest opportunities for tax reduction?

	A.	Payroll.
	B.	Property.
	C.	Unitary.
	D.	Sales (gross receipts).

beigewallaby116

List the conditionsthat must be met in order to claim a dependency exemption forqualifying children and qualifying relatives. Briefly explain eachone.

Choose one income typeand describe in detail what types of income are included in thatgroup. Have you had experience being taxed for this type ofinocome?

Two broad categoriesof taxing authorites and sources of tax law. Explain in detail oneexample from the Primary category. Be sure to explain the processby which tax law is created in your source.

Choose two forms oftax and provide a detailed of explanation of both. Include adiscission of how these taxes impact you.

What are some examplesof state and local taxes that impact individuals andbusinesses?

champagnebat418

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.

	Gross Pay through August	Gross Pay for September
a.	$ 6,400	$ 800
b.	$ 18,200	$ 2,100
c.	$ 112,200	$ 8,000

Compute BMXâs amounts for each of these four taxes as applied to the employeeâs gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.)

a.)

Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security
FICA-Medicare
FUTA
SUTA

b.)

Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security
FICA-Medicare
FUTA
SUTA

c.)

Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security
FICA-Medicare
FUTA
SUTA

d.) Assuming situation a, prepare the employerâs September 30 journal entries to record salary expense and its related payroll liabilities for this employee. The employeeâs federal income taxes withheld by the employer are $80 for this pay period. (Round your answers to 2 decimal places.)

Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)

	September Earnings Subject to Tax	Tax Rate	Tax Amount
Federal income tax


-------------------------	----------------------------------------------	-----------	Total:

e. Prepare the employer's September 30 journal entry to record accrued salary expense and its related payroll liabilities for this employee.

DATE	GENERAL JOURNAL	DEBIT	CREDIT
Sep 30

f.) Assuming situation a, prepare the employerâs September 30 journal entries to record the employerâs payroll taxes expense and its related liabilities. (Round your answers to 2 decimal places.)

Employer Payroll Taxes	September earnings subject to tax	Tax Rate	Tax Amount




------------------------------	---------------------------------------------	-----------	Total:

g.)

DATE	GENERAL JOURNAL	DEBIT	CREDIT
Sep 30

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ACC 350 Study Guide - Tax Competition, Income Tax, Internal Revenue Service

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