Question

In: Accounting

a) List of income items that are taxed for an individual are as following: - Salaries and wages...

a) List of income items that are taxed for an individual are as following:

- Salaries and wages

- Any bonus incentive pay

- Dividend income from securities owned

- Gains from sale of securities

- Interest income from money loaned to banks, financial institutions

- Consulting fee or retainer compensation

- An individual’s income from operating a business after deducting the cost of goods sold from gross income.

b) List of items excluded from the calculation of realized income:

- Gifts and inheritance

- Life insurance proceeds

- Social welfare payments

- Payment received for illness, injury or other health related issue

- Interest received from certain municipal, state and federal government bonds.

c) List of deductions and exemptions from the gross income to arrive at the taxable income:

- Home mortgage interest payments

- Educational loan interest payments

- Contributions to charity

- Taxes connected with real estate

- State and local government taxes

- Municipal bond income

d) The following would be the credits:

- Tax refunds

- Tax prepayments including employer withholding taxes from salaries and wages, contractual employment fees

- Credits toward child care, elder care, etc.

- Credit for foreign taxes paid for export of goods/services

Classify the above given data into the following categories

1. IRA Deductions

2. IRA Distributions

3. Tuitions

4. Foreign Tax Credit

Expert Solution

Here are the classifications according to categories:-

1. IRA Deductions:-

Home mortgage interest payments

- Educational loan interest payments

- Contributions to charity

- Taxes connected with real estate

- State and local government taxes

- Municipal bond income

2. IRA Distributions:-

- Salaries and wages

- Any bonus incentive pay

- Dividend income from securities owned

- Gains from sale of securities

- Interest income from money loaned to banks, financial institutions

- Consulting fee or retainer compensation

- An individual’s income from operating a business after deducting the cost of goods sold from gross income.

3. Tuitions:-

Gifts and inheritance

- Life insurance proceeds

- Social welfare payments

- Payment received for illness, injury or other health related issue

- Interest received from certain municipal, state and federal government bonds.

4. Foreign Tax Credits:-

- Tax refunds

- Tax prepayments including employer withholding taxes from salaries and wages, contractual employment fees

- Credits toward child care, elder care, etc.

- Credit for foreign taxes paid for export of goods/services

ekkarill92 answered 1 year ago

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