income and business taxation

• income tax - tax on income earned by individuals and corporations
• business tax - tax on businesses, paid by business owner
• cost and expenses - alloweable deduction from the gross income of the tax payer
• optional standard deduction - a standard deduction that is not required to be taken into account in working out taxable income
• optional standard deduction

  • a standard deduction that is not required to be taken into account in working out taxable income
  • amount not exceeding 40% gross sale or reciepts for individual and gross income for corporation
• itemize deduction

  • deductible expenses that are not included in the gross income of the taxpayer
  • cost and expenses, taxes, loses, bad debt, depreciation, delpition of oil, charitable contribution
• DIFFERENT TYPES OF INDIVIDUAL TAX-PAYER

  1. pure compensation or compensation icome eaners - when a person divide solely from his\her compensation
• DIFFERENT TYPES OF INDIVIDUAL TAX PAYERS

  1. business income earners - tax payers who derived incomes from two sources
• business income earners - taxpayers whose income comes from both pure compensation and business income
• self-employed - those who are not employed by employer but are self-employed
• mixed income earners - people who earned both wages and benefits, and who are not in full time employment