Class Notes (922,693)
US (356,106)
ND (2,672)
ACCT (143)
ACCT40610 (14)
O' Brien (14)
Lecture 14

ACCT 40610 Lecture 14: Chapter 14
Premium

3 Pages
54 Views

Department
Accountancy
Course Code
ACCT40610
Professor
O' Brien

This preview shows page 1. Sign up to view the full 3 pages of the document.
Chapter 14
Filing status:
o Reflects marital and family situation.
o Affects calculation of taxable income.
o Determines rates at which income is taxed.
MFJ or MFS if married on the last day of the year.
MFJ (married filing jointly) rates:
o If spouse incomes are similar, single rates generate lower overall tax
marriage penalty.
o If spouse incomes are dissimilar, married rates generate lower overall
tax marriage bonus.
o MFJ rates also apply to Surviving Spouse status
o A widow/widower with a dependent child for two years after death of
spouse.
MFS (married filing separately) rates
o Less favorable than single rates.
Head of Household filing status.
o Used if the taxpayer maintains a home for either a child (need not be
dependent) or dependent relative.
Single filing status.
o Default filing status for unmarried individuals.
Taxable Income Computation
o Step 1: Calculate total income.
Total income includes:
Salary, wages, fringe benefits.
Net business income.
o Income from sole proprietorship.
o Income from partnership or S corporation.
Investment income.
o Interest.
o Dividends.
o Capital gains.
o Rental income.
o Step 2: Calculate adjusted gross income (AGI).
Adjusted gross income (AGI) equals total income less specific
above-the-line deductions.
AGI is an important number because many deductions and
credits are limited by reference
to AGI.
o Step 3: Subtract itemized deductions or standard deduction.
Subtract the greater of:
Allowable itemized deductions.
Standard deduction.
Itemized Deductions
find more resources at oneclass.com
find more resources at oneclass.com

Loved by over 2.2 million students

Over 90% improved by at least one letter grade.

Leah — University of Toronto

OneClass has been such a huge help in my studies at UofT especially since I am a transfer student. OneClass is the study buddy I never had before and definitely gives me the extra push to get from a B to an A!

Leah — University of Toronto
Saarim — University of Michigan

Balancing social life With academics can be difficult, that is why I'm so glad that OneClass is out there where I can find the top notes for all of my classes. Now I can be the all-star student I want to be.

Saarim — University of Michigan
Jenna — University of Wisconsin

As a college student living on a college budget, I love how easy it is to earn gift cards just by submitting my notes.

Jenna — University of Wisconsin
Anne — University of California

OneClass has allowed me to catch up with my most difficult course! #lifesaver

Anne — University of California
Description
Chapter 14 Filing status: o Reflects marital and family situation. o Affects calculation of taxable income. o Determines rates at which income is taxed. MFJ or MFS if married on the last day of the year. MFJ (married filing jointly) rates: o If spouse incomes are similar, single rates generate lower overall tax (marriage penalty). o If spouse incomes are dissimilar, married rates generate lower overall tax (marriage bonus). o MFJ rates also apply to Surviving Spouse status o A widow/widower with a dependent child for two years after death of spouse. MFS (married filing separately) rates o Less favorable than single rates. Head of Household filing status. o Used if the taxpayer maintains a home for either a child (need not be dependent) or dependent relative. Single filing status. o Default filing status for unmarried individuals. Taxable Income Computation o Step 1: Calculate total income. Total income includes: Salary, wages, fringe benefits. Net business income. o Income from sole proprietorship. o Income from partnership or S corporation. Investment income. o Interest. o Dividends. o Capital gains. o Rental income. o Step 2: Calculate adjusted gross income (AGI). Adjusted gross income (AGI) equals total income less specific above-the-line deductions. AGI is an important number because many deductions and credits are limited by reference to AGI. o Step 3: Subtract itemized deductions or standard deduction. Subtract the greater of: Allowable itemized deductions. Standard deduction. Itemized Deductions
More Less
Unlock Document


Only page 1 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit