Essay on Tax Return

Document Type:Thesis

Subject Area:Accounting

Document 1

In the United States of America (USA), the Internal Revenue Service (IRS) is the only organization which is mandated by the federal government to collect taxes and ensure strict adherence to the internal revenue code. The IRS does so by providing taxpayers with tax forms which they fill-in crucial financial information for the purposes of ensuring that they remit the appropriate levels of taxes. Tax forms take different formats owing to the fact that American tax payers have distinctive characteristics. This ensures that there is a clear distinction between tax groups as dictated by differences in citizens’ marital status, nationality and income levels among others. The forms take different types and covering distinct household and personal activities that in one way or another cause financial drain.

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The use of this form has also been motivated by the fact that the total taxable income for Kenneth and Naomi stood at $193,778 which is above the benchmark of $100,000 as required in Form 1040 (Bell, 2017). The couple’s income and adjusted gross income stands at $107,968 with the only exemption being their 15-year-old son. From the same form, respective taxes and credits as well as other taxes to be paid by the couple are highlighted. As such, exemptions, taxable income, itemized deductions, dependent care expenses and child tax credits stood at $12,150, $72,283, $23,535, $600 and $1,000 respectively. Ultimately, the fact the dependent in question, Derek Jones is only fifteen means that he has to be exempted from the tax as per the federal government’s guidelines. Derek Jones is their dependent since he is less than 17 years old.

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Derek’s qualified expenses stands at $ 11,200 with earned incomes of $56,940 and a credit of $600. The choice for this form was dependent on the fact that the couple’s only son is less than 17 years and thus falls under this category. The federal income tax return forms work by showing the specific conditions that respective citizens of the United states of America must meet and the financial characteristics that they posses as benchmarks for specified tax return processes and estimations. In other words, the forms are specific on what the person in question does for a living and the entities he or she is subject to. Upon the completion of these forms, then respective tax return worksheets are generated showing the values of tax payer’s debit and credits as well as the underlying wage schedules.

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The federal tax return forms work differently with regard to the underlying financial or tax issue between the tax payer and the federal government. Once the forms have been filled-in, they are then sent to the Internal Revenue Service (IRS) for scrutiny as per the internal revenue code which in turn paves way for specified functions and initiatives (Johnson & Sieg, 2007). For instance, once Schedule 1, that is Form 8849 on Nontaxable Use of Fuels has been filled-in by the tax payer, the IRS scrutinizes the evidence presented so as to initiative a refund to cover for the costs of nontaxable fuels that the tax payer could have incurred within a specified period of time (Kess, Kess, & Weltman, 2008). The refund is initiated if and only if the claimant meets all the specified conditions with attached evidence in support of his claims and dues.

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