LSU ACCT 3221 Test 1: Tax Exam Study
Guide.
Tax - answertransfer of resources from public to private sector
non-penal
based on a set of predetermined criteria (certain and predictable)
has specific economic and social objectives
Tax Exclusion - answerdon't even think about this when doing tax...
Tax - answer✔transfer of resources from public to private sector
non-penal
based on a set of predetermined criteria (certain and predictable)
has specific economic and social objectives
Tax Exclusion - answer✔don't even think about this when doing taxes.
ex: scholarships, employer reimbursements for tuition .
Tax Deduction - answer✔something you paid for that will reduce your taxable income
ex: qualified tuition, student loan interest, education related to business
Tax Credit - answer✔Dollar to dollar reduction of your tax liability.
"probably more valuable than a deduction, depends on the situation."
American opportunity credit
lifetime learning credit
Instrument of Social Policy - answer✔Education, Savings and Retirement, Housing, Charitabl Giving,
Employment, Research and Experimentation, Child and Dependent Care, Adoption, Indian Reservation
Benefits
Criteria for Good Tax - answer✔equitable and fair (horizontally and vertically)
rate is going to stay the saem for whatever value of the bases :
sales tax, property tax
Progressive Tax - answer✔rate varies directly with base :
income, estate, and gift taxes
Regressive Tax - answer✔rate varies inversely with base :
FICA tax
Tax Accounting Income Definition - answer✔Income - Deduction = Taxable Income
Basic Income Tax Formula - answer✔Income (Broadly Conceived)
- Exclusions
= Gross Income
- Deductions
= Taxable Income
x Rate
= Gross Tax
-Credits
-Prepayments
= Tax Due (or tax refund)
Marginal Tax Rate - answer✔tax rate on last unit of base (last dollar of income)
Average Tax Rate - answer✔Taxes paid / taxable income
Effective Tax Rate - answer✔Taxes paid / Economic income or income
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