1. Chapter 7 Federal Income Tax
MYPF Chapter 07
11-Sept-2001
Chapter 7 Federal Income Tax
Our Tax System
Filing Tax Returns
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2. Describe components of the U.S. tax system.
Lesson 7.1 Our Tax System
Discuss the purpose of taxes and different types of taxes in the United States.
Describe components of the U.S. tax system.
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3. Types of Taxes Progressive taxes Regressive taxes Proportional taxes
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4. Components of the Tax System
The IRS
The power to tax
Paying your fair share
Tax brackets
Tax evasion
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5. IRS Audit Correspondence audit Field audit
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6. Lesson 7.2 Filing Tax Returns
Define tax vocabulary.
Prepare tax Forms 1040EZ and 1040A.
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7. Filing Status Single person Married person filing a joint return
Married person filing a separate return
“Head of household”
Qualifying widow(er) with a dependent child
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8. Exemptions Personal exemption Dependent exemption
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9. Gross Income Wages, salaries, and tips Interest income Dividend income
Unemployment compensation
Social security benefits
Child support
Alimony
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10. Adjusted Gross Income Gross income – Adjustments Adjusted gross income
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11. Taxable Income Gross income – Adjustments Adjusted gross income
– Deductions
– Exemptions
Taxable income
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12. Deductions Itemize Standard deduction
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13. Tax Credits For college tuition
For childcare to enable parents to work
For lower-income wage earners
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14. Preparing to File Who must file? When to file? Which form to use?
Where to begin?
Filing electronically
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15. Preparing Your Income Tax Return
Tax preparation software
Form 1040EZ
Form 1040A
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16. Form 1040EZ Step 1: Name, address, and social security number
Step 2: Report income
Step 3: Compute tax
Step 4: Refund or amount owed
Step 5: Sign the return
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17. Form 1040A Step 1: Name and address Step 2: Filing status
Step 3: Exemptions
Step 4: Total income
Step 5: Adjusted gross income
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18. Form 1040A (continued) Step 6: Taxable income
Step 7: Tax, credits, and payments
Step 8: Refund or amount owed
Step 9: Signature
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