Question

1. Describe how Publication 17 is useful.
2. Describe how a tax return works using the tax formula concept.

Answer 1

1) The Publication 17 refers to an informational document published by the IRS which specifies and outlines the rules and regulation for filing of federal individual income tax returns. It explains the law on taxation to ensure that the person pay only the tax he owe and no more. The form gives information especially about a tax form 1040, that is used to file individual federal income tax returns. It supplements the tax information included in the tax form instruction booklet

2) A tax return is documentation with the authority of taxation who reports income, expenses, and other important financial information. On tax returns, taxpayers using the tax formula computes their liability of tax, schedule payments of taxation, or make refund requests for the over-payment of taxes. The U.S. taxpayers use Form 1040 to file an annual income tax return. IRS Income Tax Brackets are different for different tax payers as per their filing status