tax exam

progressive tax rate

Tax rates increase as income/tax base increases

Regressive tax rate

Tax rates decrease as income/taxbase increases

Proportional/Flat

Tax rates remain the same as income/tax base increases

marginal tax rate

% of tax paid on next $ of income

average tax rate

tax liablity/taxable incomeE

effective tax rate

tax liability/total income

Criteria for good tax structure

ECCES(equity, certainty, convenience, economy, simplicity)

objectives of Fed tax law

EPTS(economic, promoting certain activates, social, tax reform)

Treausry department, admin of fed tax

IRS

INdivdual income tax returns due dates

April 15 and october 15

componetns of tax practice

Compliance, research, tax planning, financial planning

common law 

earned income not split, income not split unless jointly owned, then split 50/50

community prop

earned income owned equally, income from property owned separately belongs to spouse who owns property, otherwise owned equally

who is taxed

fruti and tree doctrine

accrual method, income tax

taxed when earned, exceptions are prepaid income recognized when received

cash method, income tax

Income is taxed when actually or constructively received (cash, check, property, or services).

hybrid method

accrual for purchases and sales, cash

method in computing all other income and

expense items