Question -
1) The profession of tax practice involves four principal areas of activity. Discuss these four areas.
2) Tax Rates. Latesha, a single taxpayer, had the following income and deductions for the tax year 2013:
INCOME: Salary $60,000
Business Income 25,000
Interest income from bonds 10,000
Tax-exempt bod interest 5,000
TOTAL INCOME 100,000
Deductions: Business expenses $9,500
Itemized deductions 20,000
Personal exemption 3,900
Total Deductions 33,400
a. Compute Latesha's taxable income and federal tax liability for 2013.
b. Compute Latesha's marginal, average, and effective tax rates.
c. For tax planning purposes, which of the three rates in Part b is the most important?