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Assignment 2: Tax Research on Itemized Deductions - Essay Example

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Assignment 2: Tax Research on Itemized Deductions

Apparently, all the united states presidents before and after him have initiated tax reform codes. Nonetheless, his tax reform has stood to a historic tax cut. In the 1990’s, Bill Clinton lowered the middle class taxes that was followed by the year 2001’s George W. Bush massive tax cut across all incomes (Fishman, Home business.., 2012). The aim ideals behind tax reforms often aim at tax reductions; however, they do not usually simplify the tax code drastically thereby making the issue a political concern especially among politicians. Working on income tax may be a complicated issue; however, it provides people with tax deductions and tax breaks with some being unusual. The main aim of tax reduction is to reduce the taxable income in order to increase tax refund. Taxation may be carried out on either standard deduction or itemized deduction (Fishman, Home business.., 2012). The main purpose of standard reduction is the presetting income to allow a deduction on the annual taxable income. The amount deductible often varies according to an individual’s filling tax status and the annual inflation. ...
The Itemized Deduction This is the deduction from taxpayers’ taxable income that is adjusted to the gross income made up from deductions for money on other goods and services annually. Deductions on specific items are allowed and they often defined by the Internal Revenue Services. The itemized deductions are often conducted on income obtained from state and loan taxes, mortgage interests, medical care expenses, and gifts among other items. However, it should be noted that itemized deductions are often limited to particular percentage gross adjustable incomes (Fishman, Home business..., 2012). However, the taxpayers need to track their possible tax reduction expenses keenly in order for effective itemized reductions. Persons spending on medical care, loan and state taxes, and donations among other deductible items or expenses are better itemized (Fishman, 2012). At some points, tax law may offset a threshold in the spending that must be exceeded before deductions. For instance, in the category of medical income, may be only expenses exceeds7.5 Percent then in such a case, the gross income may be deducted. Otherwise, if an individual’s spending is much less that 7.5 percent of their spending, then their medical expenses are never deductible. Numerous difficulties are often known to undermine the nature and form of itemized deductions that often aims at reducing income tax returns (Steuerle, 2008). Notably, the itemized deductions usually fall under different categories including the student interest loans and self-employment expenses that are below the line deductions. Other deductions are from the adjusted gross income. Nonetheless, all the itemized deductions are deduced according to schedule A of the Internal Revenue services (Fishman, Home ...Show more

Summary

Tax Research on Itemized Deductions Name Institution Tax Research on Itemized Deductions The current form of the United States’ taxation code is a complicated task code reform, that is usually common, that is usually common among politicians. President Ronald Regan and the Congress reformed that taxation code twice during his two-term nature in the office…
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Assignment 2: Tax Research on Itemized Deductions essay example
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