ACIS 3314 Lecture Notes - Lecture 3: Earned Income Tax Credit, Defined Contribution Plan, Sep-Ira

• School: Virginia Tech
• Department: Accounting and Information Systems
• Course: ACIS 3314
• Professor: Neil S.Johnson

Document Summary

Average tax rate = total tax / taxable income (don"t include muni bonds), ignore implicit tax. Effective tax rate = total tax / total income (include muni bonds), more accurate. Return dates: indivs= april 15, corps = 15th day of 3rd month after end fy, if sat, sun, or holiday, then due next biz day. Extension to file, not pay= indivs & corps automatic 6 month. If corp fy end aug 15, tax return due nov 15. Fv = pv x (1+r)^n pv = fv / (1+r)^n. Greg bought ,000 worth of stock & sells it after 5 years. It"s a capital asset so 50,000 x (1. 07)^5 = Invests ,000 in taxable corp bond that provides 5% before tax. What will after tax value of his investment be in 8 years. ,495 its a bond so after tax ror: before tax x (1-marginal) = . 0325%. 34k = lesser of 50% ss or 50% (agi + 50%