In: Finance
Explain a summary of each of these and what it has to do with income tax.
Cooperate Tax
Individual Tax
Gross Income – Moving expenses
Form 1040
Joint Tax Return
Depreciation, depletion and amortization
Corporate tax is the income tax charged on bodies corporate- companies, corporations etc which are ‘legal persons’ taxable in that country.
Individual tax is the income tax levied on individuals (natural persons) who are assessed in individual capacity for the tax purpose.
Gross Income is the immediate sum of income of a income tax payer (assessee) before deduction of allowable deductions. In the case of a salaried person, gross salary and other emoluments received is the gross income.
Form 1040 is the format of income tax return to be filed by individuals who are residents in United States of America.
Joint Tax Returns: In United States, married couples are permitted to choose whether to file their income tax returns separately or for both together. In case they opt to file together as a single return, the same is a Joint Tax Return
Depreciation is the reduction in value of an asset (tangible asset) used for business, accounted and reported for tax purpose periodically. This represents the possible wear and tear caused during this period. For income tax purpose, depreciation is to be calculated the rates and in the manner specified by the Government. Such amounts are allowed as deduction from the income for charging income tax.
Depletion is the reduction in value of natural resources which form assets of the person or firm. This reduction could be either in volume or quality. For Income Tax purpose, depletion calculated in the specified manner (usually, percentage method) is allowed as expenditure.
Amortization is a non-cash expenditure accounted periodically in order to reduce the carrying cost of intangible assets (like goodwill, copy rights, patents, cost of software etc.) proportionately during the useful life of such assets. Amount of amortization is allowed as reduction for income tax purpose.