Reflection on Chapter 3 Taxation

Reflection on Chapter 3 Taxation

REFLECTION ON CHAPTER 3: TAXATION 3

Reflectionon Chapter 3: Taxation

Reflectionon Chapter 3: Taxation

Thecalculation of tax is a very critical skill and expertise in taxationas a practice and the accounting in general. After studying thischapter, I was fascinated by the way the calculation of tax payabletakes a different view from the conventional accounting. It wasinteresting to note that the calculation of taxable income isdifferent from the calculation of the normal income under theaccounting standards. This knowledge opened me to the world oftaxation, by understanding the difference. I finally got to learn andpractice the steps that determine the tax liability of everyindividual in the country.

Oneinteresting observation I made in the chapter in on the items thatare excluded from the calculation of taxable income of individuals.The item that caught my attention is the payments paid for childsupport. Prior to the study, I had not considered child supportpayments as tax deductible expenses. This is because I thought it isa personal expense that does not qualify for deduction. However, Iunderstood that it only qualifies under a condition. According toMurphyand Higgins(2014), these payments must be backed by a written court order oragreement that initiates the child support.

Inmy experience at home, I identified with the interest from the stateand local bonds. My uncle used to tell me that it is beneficial to bythe state bonds that are offered by authorities seeking to raisefinancing. To him, he thought it was a safe way of keeping money toearn interest. Now I know that one of the advantages he enjoyed wasearning of income that was not included as taxable income by thetaxman.

Reference

Murphy,K., &amp Higgins,M.(2014). Conceptsin Federal Taxation 2015.New York: Cengage Learning