Question

1. Can you give an examples of corporate income

2. Explain withholding taxes, and tax credits applicable.

Answer 1

(1).

Followings are the examples of corporate income;

·        Income from sale of goods

·        Income from sale of sevices

·        Dividend income

·        Interest income

·        Rent revenue

·        Royalties income

·        Gains on sale of used assets

·        Income from selling copyrights & patent rights etc.

(2).

Withholding taxes;

Withholding taxes refer to the amount deducted by the employers from the income of the employees. In other words we can say that employers or payers of the income are liable to deduct taxes at sources, so that taxes can be paid to the government directly, such deducted amount by the employers or payers are known as withholding taxes.

Such withholding taxes are deducted from paid salaries, paid interest or paid dividends etc.

Tax credits applicable;

Followings are the some tax credits applicable;

·        The Earned Income Tax Credit

·        The Child and Dependent Care Credit

·        The Child Tax Credit

·        The Retirement Savings Contributions Credit

·        The American Opportunity Tax Credit

·        The Premium Tax Credit

·        Adoption credit

·        Credit for the Elderly or Disabled

·        Foreign Tax Credit

·        Excess Social Security and RRTA Tax Withheld

·        Credit for Tax on Undistributed Capital Gain

·        Nonrefundable Credit for Prior Year Minimum Tax

·        Credit to Holders of Tax Credit Bonds

·        Residential Energy Efficient Property Credit

·        Non-business energy property credit

Low-income housing credit (for Owners)