Objective [1]
Describe the importance of taxes for personal financial
planning.
Tax planning can influence spending, saving, borrowing, and investing
decisions. A knowledge of tax laws and maintenance of
accurate tax records allow you to take advantage of appropriate
tax benefits. An awareness of income taxes, sales taxes, excise
taxes, property taxes, estate taxes, inheritance taxes, gift taxes,
and Social Security taxes is vital for successful financial
planning.Objective [2]
Calculate taxable income and the amount owed for federal
income tax.
Taxable income is determined by subtracting adjustments to income,
deductions, and allowances for exemptions from gross
income. Your total tax liability is based on the published tax tables
or tax schedules, less any tax credits.Objective [3]
Prepare a federal income tax return.
The major sections of Form 1040 require you to calculate (1)
your filing status, (2) exemptions, (3) income from all sources,
(4) adjustments to your income, (5) standard deduction or itemized
deductions, (6) tax credits for which you qualify, (7) other
taxes you owe, (8) amounts you have withheld or paid in advance,
and (9) your refund or the additional amount you owe.Objective [4]
Identify tax assistance sources.
The main sources of tax assistance are IRS services and publications,
other publications, the Internet, computer software, and
professional tax preparers such as commercial tax services, enrolled
agents, accountants, and attorneys.Objective [5]
Select appropriate tax strategies for different financial and
personal situations.
You may reduce your tax burden through careful planning and
making financial decisions related to consumer purchasing, and
the use of debt, investments, and retirement planning.
