Introduction: The Internal Revenue Service (IRS) has a wide range of functions and responsibilities such as look after of administration of federal taxes, and to perform duties like estimating, determining, and collecting taxes in the form of revenue to the government, it also performs tax return audits and imposes penal provisions. It is the office within the revenue department. The task of the department is to provide the taxpayers with quality service by assisting them in proving knowledge content so the taxpayers understand their tax responsibility and pay taxes timely. It is important in maintaining and establishing tax laws.
To choose: Among the following, who is not required in participating annual filing program.
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Income Tax Fundamentals 2020
- How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.arrow_forwardRequired: Use the following information to complete Rhonda Hill's federal income tax return. If any information is missing, use reasonable assumption to fill in the gaps. Prepare this return for the year ending December 31, 2021 You may use any tax software program to complete the return, or you can do them manually by downloading fillable forms from the IRS website (www.irs.gov). The forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms. Facts: 1. Rhonda Hill (unmarried) is employed as an office manager at the main office of Carter & Associates CPA firm. Rhonda lives in a home she purchased 20 years ago. Rhonda's older cousin Mabel Wright lives with Rhonda in her home. Mabel is retired and receives $2,400 of Social Security payments each year. Mabel is able to save this money because Rhonda provides all of Mabel's support. Rhonda also provided the following information. Rhonda does not want to…arrow_forwardTrue or False - You prepare tax returns as a side business. During the last year you have record number of tax filings (8 tax returns). You are required to register with CRA?arrow_forward
- 1. The Request for Taxpayer Identification Number and Certification is also known as Form _____. Answer: A. W-9 B. W-4 C. W-2 D. I-9 2. When the 4th quarter FUTA tax is NOT at least _____, the payment may be mailed at year-end with Form 940. Answer: A. $100 B. $500 C. $1,000 D. $5,000 3. The full self-employment tax rate applied to the first $142,800 of earnings is _____. Answer: A. 2.9% B. 6.2% C. 12.4% D. 15.3%arrow_forward1. A tax payer receives an assessment notice from the BIR informing him that his total deficiency tax is 25,000 that is due last April 15. Upon receiving the notice the tax payers immediately filed and pay his tax on August 15. How much would be the total amount due? 2. Income tax return for the calendar year 2019 was due for filing on April 15, 2021 but the tax payer voluntarily filed his return without assessment notice from the BIR on June 30, 2021. The tax due per return amounts to 280,000. How much would be the total amount due? 3. The taxpayer's 2020 income tax return is to be filed through authorized agent bank under the jurisdiction of RDO East Manila. Without prior authorization from the BIR, the taxpayer filed his tax return and paid the tax through the authorized agent bank under the jurisdiction of RDO Laoag City? The tax due per return is 100,000. How much would be the total amount due? 4. In connection with problem number 3, the taxpayer also filed his return 3 months…arrow_forwardA new client comes to you in June 2021 and indicates that she instructed her previous accountant in a letter dated January 2020 to file and S election for 2020. It now appears that the prior accountant failed to follow through and make the election. Is there any provision within the Revenue Procedures to have the election apply to the 2020 tax year like the client initially intended? Prepare a memo to the partner of your tax firm explaining the qualifications of an S-election and the procedure for making a late election. [Hint – Rev. Proc. 2013-30]arrow_forward
- Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms? a. Employer’s Quarterly Federal Tax Return (Form 941) b. 401k plans c. Wage and Tax Statement (Form W-2) d. Employee’s Withholding Allowance Certificate (W-4)arrow_forwardTax Drill - Interest Applicable to Federal Tax Underpayments Complete the following statements regarding the interest applicable to Federal tax underpayments and overpayments. IRS interest is compounded . IRS Deficiency Assessments Interest usually accrues from the until days after the taxpayer agrees to the deficiency by signing Form 870. If an overpayment is refunded to the taxpayer within days after the date the return is filed or is due, no interest is allowed. When the taxpayer files an amended return or makes a claim for refund of a prior year's tax, interest is authorized from the due date of the return through the date when thearrow_forwardThe process for employee withholding involves: a. using only a 2020 Form W-4 for all employees to calculate income tax withholding. b. using a 2020 Form W-4 for new employees (all existing employees must use a pre-2020 Form W-4) to calculate income tax withholding. c. the employee provides filing status and the employer completes the Form W-4 and submits to the IRS for proper withholding. d. Existing employees may use either their previous Form W-4 or may complete a new 2020 Form W-4 and new employees must complete a 2020 Form W-4 and the employer uses those forms to calculate income tax withholding.arrow_forward
- Pfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning