Describe the Main Features of the Individual Income Tax

The following are the essential characteristics of tax. Safety income and capital gains are the big three objectives of investing.

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Characteristics of Tax system.

. Federal Individual Income Tax Formula Gross Income Deductions for Adjusted Gross Income AGI Itemized deductions or standard exemption personal and dependents Taxable Income tax rate Gross Tax Liability credits - prepayments Tax Due or Refund Deductions for can actually help you reduce your overall AGI which could help you qualify for more. It falls more heavily on the rich and less on the poor. An individual income tax or personal income tax is levied on the wages salaries investments or other forms of income an individual or household earns.

Certainty - it should be clear to the taxpayer when the tax is due how much money is due and how the tax should be paid. A tax is levied as a part of a common burden. In a good tax system the allocation of taxes among tax payers is made according to the ability to pay.

Discuss in 120150 words. It should ensure maximum social advantage. Describe the key features of organisational policy and procedures relating to the preparation of tax documentation for individual taxpayers.

Taxation should be used to finance public services. Describe the basic individual income tax formula. Imposes the same percentage rate of taxation on everyone regardless of income progressive tax.

It is charged on the total income of a person. In modern terms Adam Smiths desirable the characteristics for a tax system that have been changed and re-stated as equity certainty convenience and efficiency. Our team of experienced writers is on standby to deliver to you an original paper as per your specified instructions with zero plagiarism guaranteed.

Income tax is a medium through which the Government ensures that activities for the community are taken care of and public duties are catered to effectively and in a timely manner. For people who are self-employed they are also subject to tax liability specifically through their business income. What is the difference between deductions for adjusted gross income AGI and.

Consent is not an element. The philosophy behind progressive taxes is that higher income people can afford and should be expected to provide a bigger share of public services than those who are less able to pay. These are the most common types of taxable income and include wages and salaries as well as fringe benefits.

Equity - the tax system. This is why some hold the extreme view that taxation is robbery or theft because it is taking of property without or against the will of the. Whereas a fee is assessed as a payment for a special privilege.

The basis of a fee is the special benefit accruing to the individual. Efficiency - government administrators should be able to collect taxes without spending too much time or money. It should cause minimum aggregate sacrifice.

It uses it for everything from health care to infrastructure projects such as roads and bridges to paying for the military to covering the pay cheques of politicians or civilian servants. A progressive tax requires higher-income individuals to pay a higher share of their income in taxes. 1 It is an enforced contribution for its imposition is in no way dependent upon the will or assent of the person taxed.

Identify who bears the burden of a tax 4. This is the perfect way you can prepare your own unique academic paper and score the grades you deserve. Use the order calculator below and get started.

Contact our live support team for any. In the case of a tax the benefit is not susceptible of direct measurement. 2016 tax brackets for taxes due April 17 2017 Tax rate Single filers Married filing jointly or qualifying widowwidower Married filing separately Head of household Tax rate.

The basis of taxation is the ability or Faculty of the taxpayer. Up to 9275 Married filing jointly or qualifying wido. Income tax in India is a tax paid by individuals or entities depending on the level of earnings or gains during a financial year.

Provide an example of a tax deduction to support your response. Describe types of tax bases and tax structures. Benefit principle - people should pay taxes in proportion to the amount of services or benefits they receive Ability to pay principle - people should be taxed according to their ability to pay regardless of how many services or benefits they receive Briefly describe the process of paying individual income taxes.

List the characteristics of a good tax 3. Simplicity - tax laws should be simple and easily understood. In addition provinces and territories also collect income tax return.

From the analysis of the definition and nature of income tax the following characteristics can be identified It is a direct tax. Explain the basic characteristics of corporate income taxes 6. But there are others that should be kept in.

View the full answer. There are four characteristics of a properly imposed tax. Which type of deduction provides the greatest benefit to the taxpayer.

Describe the process of paying individual income taxes 5. Tax that imposes a higher percentage rate of taxation on low incomes than on high incomes. Understand the purpose of Social Security Medicare and unemployment taxes 7.

Explain why this distinction is critical to individual income taxation. The federal government uses income tax to fund a range of services and projects. Equity is characteristic which is an important elector for any tax system as the government needs people to pay taxes on a fair basis.

Many individual income taxes are progressive meaning tax rates increase as a taxpayers income increases resulting in higher-earners paying a larger share of income taxes than lower-earners. Investment and business income. The earnings may be both actual and notional.

The Government of. It is charged on the income of the income year at the rate applicable in assessment year. Describe the key features of organisational policy and procedures relating to the preparation of tax documentation for individual taxpayers.

For example net rental income and partnership income qualify as taxable income. Characteristics of income tax. We review their content and use your feedback to keep the quality high.

Tax that imposes a higher percentage rate of taxation on persons with higher incomes regressive tax. Discuss in 120150 words.

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