TAXATION

Income tax benefits are deductions and credits that reduce the amount of income tax owed on taxable income. These benefits are designed to encourage certain behaviors or provide relief for certain circumstances. Types of Income Tax Benefits: 1. Deductions:– Business expenses (e.g., rent, depreciation, interest)- Mortgage interest- Charitable contributions- Medical expenses- Personal expenses (e.g., mortgage […]

A levy is a compulsory contribution of money or other assets levied on a group of people for a specific purpose. It is a tax imposed on a particular group or community. Examples of levies: Characteristics of a levy: Types of levies: Legality: Levies are generally considered legal, but there can be challenges to their […]

Exempt income is income that is not subject to income tax. Examples of exempt income include: The amount of exempt income that you can earn without having to pay taxes depends on your filing status and other factors. If you are single, you can earn up to $20,500 of exempt income without having to pay […]

Definition: Domicile refers to a person’s legal residence, where they have a permanent home and primary place of abode. It is a legal concept that determines a person’s legal standing in various legal matters, such as voting, taxation, and inheritance. Key Elements of Domicile: Examples: Legal Significance: Changing Domicile: Domicile can change when a person […]

The effective tax rate (ETR) is a measure of the overall tax burden paid by a company or individual, calculated by dividing the total taxes paid by the taxable income. It is an important metric used to compare tax burdens across different entities and jurisdictions. Formula: Effective Tax Rate (ETR) = Total Taxes Paid / […]

Deferred tax liability is a tax liability that is not paid when the income is earned but is paid in the future when the income is realized. It is typically incurred on assets that are not yet taxable, such as depreciation of equipment. Causes of Deferred Tax Liability: Examples of Deferred Tax Liability: Accounting Treatment: […]

Horizontal equity is a principle in taxation that aims to ensure that individuals and corporations pay the same tax rate on comparable income or assets. Key principles of horizontal equity: 1. Ability to pay: Individuals and corporations should be able to pay taxes based on their ability to pay, as measured by their income, assets, […]

A tax refund is a refund of taxes paid in excess of the amount owed. It’s typically issued by governments when there is a discrepancy between the tax owed and the tax paid. Here are the key points about tax refunds: Who is eligible: Amount of refund: Ways to receive a refund: Timeline: Additional information: […]

A progressive tax is a type of taxation in which the rate of taxation increases with the taxpayer’s income, wealth, or other measure of ability to pay. Under a progressive tax system, individuals with higher incomes or greater wealth pay a higher proportion of their income or wealth in taxes than those with lower incomes […]