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Tax Deduction
Tax deduction is a reduction of income that is able to be taxed and is commonly a result of expenses, particularly those incurred to produce additional income. Tax deductions are a form of tax incentives, along with exemptions and tax credits. The difference between deductions, exemptions, and credits is that deductions and exemptions both reduce taxable income, while credits reduce tax. Above and below the line Above and below the line refers to items above or below adjusted gross income, which is item 37 on the tax year 2017 1040 tax form. Tax deductions above the line lessen adjusted gross income, while deductions below the line can only lessen taxable income if the aggregate of those deductions exceeds the standard deduction, which in tax year 2018 in the U.S., for example, was $12,000 for a single taxpayer and $24,000 for married couple. Limitations Often, deductions are subject to conditions, such as being allowed only for expenses incurred that produce current benefits. ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tax Incentives
A tax incentive is an aspect of a government's taxation policy designed to incentivize or encourage a particular economic activity by reducing tax payments. Tax incentives can have both positive and negative impacts on an economy. Among the positive benefits, if implemented and designed properly, tax incentives can attract investment to a country. Other benefits of tax incentives include increased employment, higher number of capital transfers, research and technology development, and also improvement to less developed areas. Though it is difficult to estimate the effects of tax incentives, they can, if done properly, raise the overall economic welfare through increasing economic growth and government tax revenue (after the expiration of the tax holiday/incentive period). However, tax incentive can cause negative effects on a government's financial condition, among other negative effects, if they are not properly designed and implemented. There are four typical costs to tax ince ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Personal Allowance
In the UK tax system, personal allowance is the threshold above which income tax is levied on an individual's income. A person who receives less than their own personal allowance in taxable income (such as earnings and some benefits) in a given tax year does not pay income tax; otherwise, tax must be paid according to how much is earned above this level. Certain residents are entitled to a larger personal allowance than others. Such groups include: the over-65s (followed by a further increased allowance for over-75s), blind people, and married couples where at least one person in the marriage (or civil partnership) was born before 6 April 1935. People earning over £100,000 a year have a smaller personal allowance. For every £2 earned above £100,000, £1 of the personal allowance is lost; meaning that incomes high enough will not have a personal allowance. Personal allowance tapering On 22 April 2009, the then Chancellor Alistair Darling announced in the 2009 Budget stat ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |