Reflection on a Chapter

Reflection on a Chapter

REFLECTION ON A CHAPTER 4

Reflectionon a Chapter

Reflectionon a Chapter

Taxationis, with no doubt, one of the most fundamental components of thecontemporary society. While the rules governing taxation are a bitcomplex, all income that the taxpayer earns, whether taxable ornontaxable would be included in the calculation of the same with theexclusion of receipt of borrowed funds or return on capital. Variedother forms of income would be excluded from the gross income, withsome being limited to a particular amount. The calculation oftaxation necessitates that one determines the AGI (Adjusted GrossIncome), which is the basis for determining the percentagelimitations pertaining to particular itemized deductions includingsome casualty losses, medical expenses and contributions andcharitable contributions.

Ofcourse, standard deductions are pretty crucial in the determinationof the tax payable. However, it should be noted that there arevariations regarding how the standard deductions would be calculated.Perhaps one of the major questions would be how the standarddeduction would be calculated in instances where both parties haveare blind or where they are in varying age brackets.

Perhapsone of the major implications regarding the calculation of taxationis the fact that it is considerably dynamic. Indeed, there arenumerous modifications that take place over time with regard to thedeductions, expenses or the items that would be considered as taxableand non-taxable income. This necessitates that one is always updatedon the changes or modifications that are in place regarding theseitems. Of course, this determines the amount of tax returns that anindividual has to file, in which case having perfect knowledge ofthis is imperative. The most important thing is going by the generalrule, which underlines the fact that tax returns have to be filed ininstances where the gross income is equal to or higher than theexception amount and standard deductions.

References

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