This chapter discuss basic principles of income taxes and determine your filing status; describe the sources of gross income and adjustments to income, differentiate between standard and itemized deductions and exemptions, and calculate taxable income; prepare a basic tax return using the appropriate tax forms and rate schedules; explain who needs to pay estimated taxes, when to file or amend your return, and how to handle an audit. | PFIN 4 Preparing Your Taxes 3 Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. GITMAN/ JOEHNK/ BILLINGSLEY Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1 Discuss basic principles of income taxes and determine your filing status 2 Describe the sources of gross income and adjustments to income, differentiate between standard and itemized deductions and exemptions, and calculate taxable income 3 Prepare a basic tax return using the appropriate tax forms and rate schedules 4 Explain who needs to pay estimated taxes, when to file or amend your return, and how to handle an audit LEARNING OUTCOMES PFIN4 | CH3 Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in | PFIN 4 Preparing Your Taxes 3 Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. GITMAN/ JOEHNK/ BILLINGSLEY Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1 Discuss basic principles of income taxes and determine your filing status 2 Describe the sources of gross income and adjustments to income, differentiate between standard and itemized deductions and exemptions, and calculate taxable income 3 Prepare a basic tax return using the appropriate tax forms and rate schedules 4 Explain who needs to pay estimated taxes, when to file or amend your return, and how to handle an audit LEARNING OUTCOMES PFIN4 | CH3 Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 Know where to get help with your taxes and how software can make tax return preparation easier 6 Implement an effective tax planning strategy LEARNING OUTCOMES (continued) PFIN4 | CH3 Taxes Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Dues paid for membership in a society Cost of living in a country Objective of tax planning Maximize the amount of money that one can keep by legally minimizing the amount one pays PFIN4 | CH3 Income Taxes Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Type of tax levied on taxable income by the federal, state, and local governments Progressive tax structure: Larger the amount of taxable income higher the rate at which it is taxed Marginal tax rate: Paid on the next dollar of taxable income
