MGMT 132A Lecture Notes - Lecture 12: Alternative Minimum Tax, Child Tax Credit, Qualified Dividend
7 Jun 2016
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Half year convention: only get year depreciation at its first year. Calculate tax by tax table or tax computation worksheet = marginal tax rate (tax amount / other income). That determines what you tax the first bucket at, 0 15 or 20%. Formula: self-employment taxable income = self-employment income x 92. 35% Tax self-employment taxable income at 15. 3% (up to 117,000) then tax remaining balance at. Check to see if taxpayer has wage income as this will reduce self-employment tax: tax credits. Purpose: comes after tax owed and are dollar for dollar reductions in tax which help people with their taxes. Non-refundable credits: if it is more than the tax owed, you don"t get the difference back. < 42,000 to be able to apply this. Maximum deduction for agi is ,500 per year. If at least 50 years old, the limit is ,500 per year. Distribution: must wait until you"re 59. 5, there is 10% penalty (tax)
