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Published on: August 28, 2013
Income Tax Questions
Every year across the United States individuals file their
. Some of those individuals who file their income taxes may receive a refund, while others may find instead of a refund there are taxes owed. Tax laws change yearly and often individuals find themselves with income tax questions.
What is income tax?
An income tax is taxes that placed upon a businesses or an individual’s income. There are several different income tax systems that are in place around the world. An income tax system may have an income tax that may be regressive, progressive, or proportional. The income tax of individuals is taxes upon all of the income earned by the individual, while income tax of businesses may be only on the
. Each tax system may have a different definition when it comes to income. Most income tax system also deductions that lower the amount of income earned. Below are a few income tax questions that have been answered by the Experts.
When does the statute of limitations begin expiring on income taxes owed?
The statute of limitations for income taxes that are owed begins to expire from the date of assessment. The date of assessment is the day that the tax return was filed. So if an individual had not filed a tax return for a certain year, the statute of limitations on the taxes due would not begin until the income tax return was filed. However if an individual were to have to file an amended return, then the date of assessment would change from the date the income tax return was originally filed, to the date the amended income tax return was filed.
If an individual has not filed income tax for several years can the individual file those income tax returns now?
In many cases, if an individual has not filed an income tax for several years, the individual should file an income tax for those years that they have not filed for. Even if the individual did not feel that the individual made enough to report, because if it should have been reported and any income taxes were owed, then those income taxes have accrued penalties. Refunds may be limited to years that are still within the statute of limitations for refunds.
What is the statute of limitations for investigating income tax returns?
For examination the statute of limitations begins on the date of assessment, which is the day that the income tax return was filed, that or April 15th of the year after the income tax return is filed. The statute of limitations for examination is three years, unless the individual had made an agreement for the term to extended; this agreement must be in writing. However it should be noted that if the IRS believes that a misstatement done criminally of either the deductions or income can be opened for 7 years.
Income tax is taxes that are enforced by a tax agency on the income of businesses or individuals. There are several different types of income tax systems across the world, some of which allow tax deductions. If an individual has not filed an income tax for several years, it will be beneficial for them to file an income tax return for each year as there may be taxes that are owed that will have accrued penalties. Any income tax questions can be asked of the Experts.
Recent Income Tax Questions
Permtemp Corporation formed in 2009 and, for that year, reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities:
Cost of goods sold
Tax-exempt interest income
Meals and entertainment
Net loss before federal income taxes
Allowance for doubtful accounts
Investment in corporate stock
Investment in tax-exempt bonds
Total liabilities and equity
Additional information for 2009:
• The investment in corporate stock is comprised of less-than-20%-owned corporations.
• Depreciation for tax purposes is $1.4 million under MACRS.
• Bad debt expense for tax purposes is $150,000 under the direct writeoff method.
• Limitations to charitable contribution deductions and meals and entertainment expenses must be tested and applied if necessary.
• Qualified production activities income is zero.
Required for 2009:
a. Prepare page 1 of the 2009 Form 1120, computing the corporation’s NOL.
b. Determine the corporation’s deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP accounting under ASC 740. Use the balance sheet information to prepare Schedule L of the 2009 Form 1120.
c. Prepare the 2009 Schedule M-3 for Form 1120.
d. Prepare a schedule that reconciles the corporation’s effective tax rate to the statutory 34% tax rate.
I read somewear that a Military Retire is able to get a 20
I read somewear that a Military Retire is able to get a 20 thousand credit on income tax one time? If this is true how is it worked on tax return? Thank You for your time. BILL
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