Individual Case for Taxation Study Example | Topics and Well Written Essays - 500 words

Individual for Taxation - Case Study Example In joint tax return, there are deductions for itemized and standard deductions from adjusted gross income. Standard deductions are income amounts that non-itemizers subtract from their contributed income basing on the filing status. The examples of such deductions are medical expenses, charitable contributions, home mortgage interest and property taxes. Itemized deductions are deductions from the taxpayer’s gross income for money spent on goods and services throughout the year. The deductions convert taxable income into non-taxable income that one spends on various taxes privileged items. The examples of such itemized deductions are interest paid on investments, casualty and theft losses, hobby expenses and cash contributions to charity and churches. A thorough examination of the items in the joint tax return reveals that the following items will be claimed: firstly, the real estate tax for example registration fees for motor will be claimed to convert the taxable amount to non taxable income. Moreover, interest margin paid on investments of the couple either jointly or separately is claimed (Genders 2013). Additionally, medical expenses for the betterment of couples’ life shall be accounted for in joint tax return to relieve them. Nevertheless, expenses and charitable contributions that are contributed by the couple will be claimed for deduction in the process of taxation. From the above calculation, 2013 has a better taxable income to the revenue authority because of the less personal exemptions deductions that are deducted from the adjusted gross income. For instance in the scenario in, we have taxable income of $102800 as compared to year 2014 where we have a taxable income of $ 102750. The effect is brought in by a decrease in the personal exemptions by $50. Other issues to be identified are: the age of the couple whether they are above 65 years or less. This helps in determination of the standard