What is implied when a CPA signs the preparers declaration on a federal income tax return?

A. The CPA has verified all the information furnished by the taxppayer.

B. The Tax Return and supporting schedules were prepared in accordance with the generally accepted accounting principles.

C. The tax return is not misleading, based up all the information of which the cpa has knowledge.

D. The tax return was prepared by a CPA who maintained an impartial attitude in preparing the return.

I havent been able to find this answer. Does any one on here have any ideas as to the solution?

5. The preparer’s declaration on a tax return often states that the
information contained therein is true, correct, and complete to the
best of the preparer’s knowledge and belief based on all information
known by the preparer . This type of reference should be understood
to include information furnished by the taxpayer or by third parties to
a member in connection with the preparation of the return .
6. The preparer’s declaration does not require a member to
examine or verify supporting data; a member may rely on information furnished by the taxpayer unless it appears to be incorrect,
incomplete, or inconsistent . However, there is a need to determine
by inquiry that a specifically required condition, such as maintaining
books and records or substantiating documentation, has been satisfied
and to obtain information when the material furnished appears to be
incorrect, incomplete, or inconsistent . Although a member has certain
responsibilities in exercising due diligence in preparing a return, the
taxpayer has the ultimate responsibility for the contents of the return .
Thus, if the taxpayer presents unsupported data in the form of lists of
tax information, such as dividends and interest received, charitable
contributions, and medical expenses, such information may be used
in the preparation of a tax return without verification unless it appears
to be incorrect, incomplete, or inconsistent

Is this a good tax reform plan?

Eliminate the Income Tax
Lower the Corporate Tax to 15%
Have a tax on all imports at 15%
Have a national property tax at 15%
Have a 15% consumption tax
Is this a good Tax Reform plan?


1. Many corporations pay less than 15% now, so you wouldn’t really be lowering their tax; you’d be raising it.

2. It would not bring in enough money. The national debt would increase and millions of government employees would lose their jobs.

3. The poor would not be able to afford to pay a 15% consumption tax and pay for food, housing, etc., so they would have to go on food stamps, welfare, etc., which would cost the government more than they were paying in taxes.

4. Most critically, the 15% import tax would violate international agreements, and force every other country in the world to prohibit imports of anything made in the U.S. This would mean, first, that U.S. exports would drop to zero, and, second, that only things that are used only in the U.S. could be made in the U.S.; anything used in more than one country could no longer be made in the U.S. (because what was used in the other country could not be made in the U.S., and it’s not cost-effective to make the thing in two different countries).

In conclusion, it wouldn’t really matter that you eliminated the income tax, because almost nobody would have an income. Nearly all jobs depend, directly or indirectly, on either (a) the existence of an income tax, so that the government can spend in ways that create jobs, or (b) the export of U.S. products to countries that won’t all imports from a country with a 15% import tax.

Do corporations get a tax deduction on paying income tax and if so where is it reported?

When filing a corporate Tax Return I think I can deduct the state income tax on the federal return, but then my state tax changes. Can I deduct both the federal and state income tax to be paid on both the federal and state return or just the state on the federal return?

You can’t deduct federal Income Tax.

The Economics of Tax Reform: Lessons from the Donut Shop

What can a donut shop teach us about Tax Reform? Maybe quite a bit. Would the federal government have all of the money it needed if Congress just kept raising taxes? Possibly, but after a while, higher tax rates would actually bring in less money for the government. The same is true of a business. If you were making a little bit of money selling donuts at $1 a piece, would you make 300 times as much money by changing your price to $300 per donut? Probably not.

When it comes to evaluating tax changes, the most common way is to assume that no matter how different the tax code is in the future, the economy will continue to behave as if nothing had happened — Americans will keep working and investing in the exact same way. Using this “static,” or unchanging, view of the economy, however, gives us a distorted idea of what the future is going to look like.

The Tax Foundation uses a sophisticated economic model to measure the dynamic effects of tax policy changes. We believe that this approach gives lawmakers a more realistic picture of the effects of tax changes on the economy and federal finances.

Video script:

Imagine that you own a sweet donut shop.

And say you sell 100 donuts every day at $1 each. You’d make $100 a day, right?

Now say you raised the price of your donuts to $5 each. Would you make $500 a day?


But maybe people wouldn’t buy as many donuts at five dollars each.

So what if you lowered the price of the donuts to fifty cents each?

Yes, you’d make less money per donut, but you’d probably have a lot more customers.

Seems like a simple part of economics, right?

Well, simple or not, it’s not how the government views taxes.

Whenever Congress is trying to calculate how much money they’ll get from taxes, they use what some people call, ‘Static Scoring.’

That means that according to Congress’ estimates, every tax cut means lost revenue.

And every tax hike means more money for the government.

Which isn’t always true. Just like every increase in the price of donuts doesn’t mean more money for the donut shop.

After all, who’s going to buy a $300 donut?

All of this matters because, in a weird way Congress’ over-simplified model is holding us back.

Because if you don’t estimate the economic effect of taxes, you can’t make good policies.
Well, there IS a better model. But Congress isn’t using it.

A Dynamic scoring model focuses more on economic growth.

A Dynamic model calculates the broader effects of tax policy on the things that produce economic growth — such as how tax policy affects the cost of labor and the cost of capital investment.

Higher taxes on labor means fewer jobs at lower wages. Lower taxes on labor mean more of those jobs at higher wages.

Higher taxes on capital such as buildings and ovens mean less investment in those things

And lower taxes mean more.

So what?

Well, more capital and more labor mean more growth and better living standards for American families.

And after all, isn’t the point of tax reform to grow our economy so Americans can have more opportunities?

Critics of dynamic scoring resist it because economists don’t always agree on the details.

But isn’t trying dynamic scoring better than using a model we know is wrong?
After all, this isn’t a donut shop, we’re talking about.

It’s our country.

Duration : 0:2:17

Continue reading

How to Calculate Income Tax in India 2013 – Part 1

This Sunday, My Mistri’s two children came to me for taking my help in the calculation of Income Tax. From 5 years, I did not teach offline, but his father is my good friend. So, I taught him this calculation. Same time, my camera was on. So, This video will also be helpful for this free online virtual school’s students. I hope, you will like this.

Duration : 0:5:46

Continue reading