Term
| Joint and Several Liability |
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Definition
| Responsible for al tax liability for both if filing a joint return |
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Term
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Definition
| For 2 yrs after spouse dies. Same rates as MFJ. In year of death must file MFJ. |
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Term
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Definition
Married brackets in half.
No J and S Liability. |
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Term
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Definition
| Income from Business (earned) |
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Term
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Definition
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Term
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Definition
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Term
| 4 Steps to Taxable Income Computation |
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Definition
Calculate Total Income
Calculate Adjusted Gross Income (AGI)
Subtract Standard Deduction or Itemized
Subtract Exemption Amount |
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Term
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Definition
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Term
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Definition
| Any deduction that cannot be allowed in the calculation of AGI |
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Term
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Definition
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Term
| Exemptions (personal or dependent) |
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Definition
Provide Subsidy
Low Income Allowance
Phase out at high income levels |
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Term
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Definition
Relationship or member of household
Provide >50% of support
Gross income cannot exceed exemption amount |
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Term
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Definition
| Combined earning power greater than two separate people living together. |
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Term
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Definition
| Child's unearned (investment) income taxed at the parents' marginal rate if in excess of $2,000 |
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Term
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Definition
| $1,000 per child <17 yrs old. |
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Term
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Definition
| Offsets the burden of payroll tax on low-income families. It is refundable if it exceeds pre-credit income tax. |
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Term
| Performance Based Compensation |
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Definition
| not subject to the $1M limit on annual compensation paid to the top 4 (CEO, CFO, etc.) |
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Term
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Definition
| IRS classifies as dividend but corporation views as salary, interest, or rent. |
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