Income Taxes

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Income Taxes

• Individuals
• Modified Cash Basis (most)
• RevenuesReceipts
• ExpensesExpenditures
• Depreciation on MACRS
• If inventory for sale, then use accrual basis
•  

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• Gross Income--Income from all sources
• Business income is on Sch. C
• Share of Partnership incomes
• Adjustments--Certain items excluded
• Certain Losses, Pension Cont.
• Adjusted Gr. Income
• Deductions--Most take standard Deduction
• Mortgage interest, contributions, Property taxes
• Taxable income
•  

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Corporate Taxes      

• Corporations pay taxes separately from owners.
• Excludes most dividend revenue, all from mostly
  owned companies.
• Taxable incomeRevenues minus Ordinary Business
  expenses
• Depletion allowances ( rev)
• Entertainment limited in amounts
• Insurance limited in amounts
• Corporate Rates 15 to 38 --35
• Most states also have corporate income taxes

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General Rules

• Trade your gains and sell your losses on like
  kind exchanges.
• No wash sales.
• Substance may be looked at on review.
• Be honest as you can go to jail for cheating on
  your taxes. (Presumption of guilt.)
• However, You should be aggressive in gray areas.