Tax allowable deductions Essay Example | Topics and Well Written Essays - 500 words

Tax allowable deductions - Essay Example These qualify at lower rates than ordinary dividends. For the two categories, the rates of dividend are given according to tax brackets. 10. Taxable refunds, credits, or offsets of state and local income taxes IRS sec. 6050(e) it says any person who makes refunds of $10 or more in the year on behalf of the state shall be liable to fill the form for refunds. 13 Salaries and wages (less employment credit) - Treasury Regulation section 1.47(1-4) – any wages and/ or salaries paid to any employee is allowable for tax purposes. The employment credit should be deducted therefrom. 17 Taxes and licenses- Treasury Regulation section 26(1) taxes from the corporate are paid to the treasury as well as any licenses. Very high amounts of taxes are remitted directly to the treasury officials 20 Depreciation from Form 4562 not claimed on Schedule A or elsewhere on return (attach Form 4562) - Treasury Regulation section 1.167(a) and (b) states that there is no time that depreciation shall be charged above a figure so reasonable than its salvage value. 23 Pension, profit-sharing, etc., plans  ­- Treasury Regulation section 1.401-1 states that these plans should withhold 10% of the contribution in early remittances and such contributions by employees are tax allowable. 28 Taxable incomes, before net operating loss deduction and special deductions. Subtract line 27 from line 11- Treasury Regulation section 1.861.8 says that the taxable income so determined is from operations in the United States. 29a Less: a Net operating loss deduction (see instructions) - Treasury Regulation section 1.904.3 losses are carried forward from previous years and profits are taxed with the existing rate. (James et al,