this homework for Adrian Monroe so please don't send me MSG
| CHAPTER OVERVIEW |
The basics of taxes and their relationship to financial planning are presented in this chapter. The material starts with a brief discussion of types of taxes. Next, the fundamental aspects of federal income taxes are presented including taxable income, deductions, exemptions, tax rates, and tax credits. The information on filing your federal income tax return covers filing status, types of tax forms, basic steps for completing Form 1040, tax assistance sources, and audit procedures. Finally, the chapter concludes with a discussion of tax planning strategies related to purchasing decisions, investment alternatives, and retirement plans.
| LEARNING OBJECTIVES | CHAPTER SUMMARY |
After studying this chapter, students will be able to:
| Obj. 1 | Describe the importance of taxes for personal financial planning. | Tax planning can influence spending, saving, borrowing, and investing decisions. A knowledge of tax laws and maintenance of accurate tax records are necessary to take advantage of appropriate tax benefits. An awareness of income taxes, sales tax, excise tax, property tax, estate tax, inheritance tax, gift tax, and Social Security is vital for successful financial planning. |
| Obj. 2 | Calculate taxable income and the amount owed for federal income tax. | Taxable income is determined by subtracting adjustments to income, deductions, and allowances for exemptions from gross income. Your total tax liability is based on the published tax tables or tax schedules less any tax credits. |
| Obj. 3 | Prepare a federal income tax return. | The major sections of Form 1040 require the determination or calculation of (1) your filing status, (2) your exemptions, (3) your income from all sources, (4) adjustments to your income, (5) your standard deduction or itemized deductions, (6) tax credits for which you qualify, (7) other taxes you owe, (8) amounts you have withheld or paid in advance, and (9) your refund or the additional amount you owe. |
| Obj. 4 | Identify tax assistance sources. | The main sources of tax assistance are IRS services and publications, the Internet, other publications, computer software, and professional tax preparers such as commercial tax services, enrolled agents, accountants, and attorneys. |
| Obj. 5 | Select appropriate tax strategies for different financial and personal situations. | You may reduce your tax burden through careful planning and financial decisions related to consumer purchasing, the use of debt, investment decisions, and retirement planning. |
