BUS 3302 Study Guide - Midterm Guide: Tax Bracket, Itemized Deduction, Income Statement
Document Summary
Income statement prepared over a period of time, lists all sources of income and expenses, difference between income and expenses is the contribution to savings or investment. Budget looks like an income statement, but it plans for the future and for future spending, must have at least 6 months of records of previous income statements. List fixed expenses (car, house), variable expenses (entertainment, food, gas) Source for federal tax is personal and corporate income taxes. Source for state tax is income tax and sales tax. Ways to reduce taxable income : shifting tax brackets, bunching up deductions. Assets liabilities = net worth (can be +, 0 or -) Income & expenses can be -, 0 or +, referred to as the contribution to savings and investment. Liquidity : liquid assets compared to the take-home pay, liquid assets / take-home pay should be a minimum of 25% (3 months) to a maximum of 50% (6 months)
