Free Printable Worksheets for learning Tax Law at the College level

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Tax Law Info Sheet

Introduction

Tax law is a branch of law that deals with the rules and regulations governing the collection and taxation of income, goods, and services. Understanding tax law is essential for individuals, businesses, and governments to comply with tax regulations and to make informed financial decisions.

Key Concepts and Definitions

Types of Taxes

Income tax: a tax on a person's income
Sales tax: a tax on goods and services sold
Property tax: a tax on the value of property
Excise tax: a tax on specific goods or activities, such as alcohol, tobacco, and gambling

Taxable Income

Taxable income includes all types of income, including wages, salaries, tips, interest, dividends, and capital gains.
Deductions can lower taxable income, such as business expenses, charitable donations, and mortgage interest.

Tax Forms

Form 1040: the standard tax form used by individuals to file federal income tax returns
Form W-4: used by employees to determine the amount of taxes withheld from their paychecks
Form 1099: used to report income received from self-employment or contract work
Form 941: used by employers to report employment taxes

Tax Penalties

Late filing or payment can result in penalties and interest charges.
Tax fraud or evasion can result in fines, imprisonment, and other legal consequences.

Important Information

Tax laws are constantly changing, and it's important to stay up-to-date on any new legislation or regulations that may affect your tax situation.
Certain expenses and activities may be tax-deductible, so it's important to keep accurate records throughout the year.
Seeking professional guidance from a tax attorney or accountant can help ensure compliance and minimize tax liability.

Summary

Understanding tax law is crucial for individuals and businesses alike, and involves understanding types of taxes, taxable income, tax forms, and potential penalties. It's important to stay informed on any changes in tax laws, keep accurate records, and consider seeking professional guidance.

Here's some sample Tax Law vocabulary lists Sign in to generate your own vocabulary list worksheet.

Word	Definition
Taxable income	The amount of income used to calculate how much income tax an individual or a company owes. For individuals, it includes wages, salaries, tips, interest, dividends, and other taxable income. For companies, it includes profits, capital gains, and other taxable income.
IRS	Stands for Internal Revenue Service, a government agency responsible for collecting taxes and enforcing tax laws in the United States.
Deduction	An expense that can be subtracted from an individual's or a company's taxable income to reduce the amount of taxes owed. Examples of deductions include charitable donations, mortgage interest, and medical expenses.
Tax credit	A dollar-for-dollar reduction in the amount of taxes owed. Tax credits are typically offered as an incentive for individuals or companies to take certain actions, such as purchasing energy-efficient appliances or installing solar panels.
Tax bracket	A range of taxable income to which a specific tax rate is applied. The US has seven tax brackets, which range from 10% to 37%, depending on income level.
Depreciation	The gradual decrease in value of an asset over time. For tax purposes, depreciation allows businesses to write off the cost of an asset over its useful life, rather than all at once.
Capital gain	The profit made from the sale of an asset, such as stocks or real estate. Capital gains are subject to taxes, and the rate depends on the individual's total taxable income and the length of time the asset was held.
Estate tax	A tax on the transfer of property upon a person's death. The current federal estate tax exemption is $11.58 million for individuals and $23.16 million for married couples.
Gift tax	A tax on the transfer of property from one person to another without receiving adequate compensation in return. The annual gift tax exclusion is $15,000 per recipient in 2021.
Tax shelter	An investment that reduces an individual's or a company's taxable income. Examples of tax shelters include retirement accounts, such as 401(k)s and IRAs, and municipal bonds.
Tax evasion	The illegal or unethical practice of not paying taxes owed. Examples of tax evasion include failing to report all taxable income, falsifying deductions or credits, and failing to pay taxes on time.
Tax audit	An examination of an individual's or a company's financial records to ensure compliance with tax laws. Audits can be triggered by anomalies in tax returns or randomly selected.
Taxable event	An occurrence that triggers a tax liability. Examples of taxable events include selling an asset for a profit, receiving income, and winning a prize.
Carryforward	The application of tax losses or credits from one year to a future year. This can help reduce future tax bills by offsetting future income.
Withholding tax	A tax on income that is withheld by an employer and sent directly to the government on behalf of an employee. Withholding taxes are designed to help individuals avoid underpaying taxes and owing large bills at tax time.
Tax treaty	An agreement between two countries that governs the taxation of individuals or companies doing business across borders. Tax treaties are designed to reduce double taxation and ensure that tax laws are applied fairly to both individuals and companies.
EITC	Stands for Earned Income Tax Credit, a tax credit for low- and moderate-income individuals and families. The credit is calculated based on income level and number of dependents, and is refundable, meaning that if the credit exceeds the amount of taxes owed, the taxpayer receives the excess as a refund.
Tax lien	A legal claim against an individual or a company's property to enforce payment of taxes owed. This claim is often used by the government to collect unpaid taxes.
Filing status	The taxpayer's marital status as of the last day of the tax year. The available filing statuses are Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er). The filing status affects the taxpayer's tax bracket and the amount of taxes owed.
Tax return	A document filed with the government that reports an individual's or a company's income, deductions, and tax liability for a given tax year. Tax returns must be filed annually by taxpayers who owe taxes to the government.
Tax liability	The total amount of taxes owed by an individual or a company in a given tax year. The tax liability is calculated by taking the tax rate that applies to the taxpayer's taxable income and subtracting any deductions or tax credits that apply.

Here's some sample Tax Law study guides Sign in to generate your own study guide worksheet.

Study Guide: Tax Law

Tax Law is a fundamental part of legal education that covers federal, state, and local taxes, and other related legal aspects. This study guide is designed to help you better understand the basic concepts and principles of Tax Law.

Overview of Tax Law

Definition and purpose of Tax Law
Types of taxes, including income taxes, sales taxes, and property taxes
Tax law at the federal, state, and local levels
Sources of Tax Law, including statutes, regulations, and case law
Tax Law and public policy

Taxation of Personal Income

Definition of personal income for tax purposes
Gross income vs. taxable income
Deductible expenses, including individual retirement account (IRA) contributions, mortgage interest, and charitable contributions
Tax rates and brackets
Standard deduction vs. itemized deduction
Tax credits, including the earned income credit, child tax credit, and education credits

Taxation of Business Income

Types of business entities, including sole proprietorships, partnerships, and corporations
Tax treatment of each type of business entity
Deductions for business expenses, including home office expenses, travel and entertainment expenses, and depreciation
Taxation of capital gains and losses
Net operating losses
Alternative minimum tax

Taxation of Estates and Gifts

Definition of estate and gift taxes
Estate and gift tax exemptions
Calculation of estate and gift taxes
Marital deduction and charitable deduction

Taxation of Trusts

Types of trusts, including revocable trusts, irrevocable trusts, and charitable trusts
Taxation of grants and distributions from trusts
Generation-skipping transfer tax

Legal Procedures for Tax Disputes

Administrative process for challenging tax assessments and related penalties
Legal process for appealing tax disputes through the courts
Statute of limitations for challenging tax assessments
Innocent spouse defense

Conclusion

Tax Law is a complex area of law that continues to evolve. This guide has introduced you to the basic concepts and principles of Tax Law. To gain a deeper understanding, it is essential to keep up-to-date with changes in tax law and case law. You can consult online tax services, tax journals, and case reporters to stay updated.

Here's some sample Tax Law practice sheets Sign in to generate your own practice sheet worksheet.

Tax Law Practice Sheet

Problem 1:

Facts:

Sue sells her car for $15,000. She purchased the car for $10,000 and made $2,500 in improvements.

Questions:

What is Sue's gain on the sale of the car?

What is Sue's basis in the car?

Problem 2:

Facts:

Bob owns a small business that operates as a sole proprietorship. In 2020, Bob's business had $100,000 in revenue and $75,000 in expenses.

Questions:

What is Bob's taxable income from the business?

What is the self-employment tax rate?

How much self-employment tax does Bob owe on his business income?

Problem 3:

Facts:

John purchases a house for $200,000 and takes out a mortgage for $150,000. He later sells the house for $250,000 and pays off the mortgage in full.

Questions:

What is John's gain on the sale of the house?

What is John's basis in the house?

Does John owe any capital gains tax on the sale of the house?

Problem 4:

Facts:

Samantha receives $5,000 in dividends from her investments in 2020. She also has $55,000 in taxable income from her job.

Questions:

What tax bracket is Samantha in?

What is the tax rate on qualified dividends?

How much tax does Samantha owe on her dividend income?

Problem 5:

Facts:

Tom and Mary are married and file a joint tax return. In 2020, they had $120,000 in taxable income and paid $15,000 in mortgage interest.

Questions:

What is Tom and Mary's marginal tax rate?

How much of their mortgage interest can they deduct on their tax return?

What is their adjusted gross income?

Sample Practice Problem

Q: What is the definition of a taxable event under the Internal Revenue Code?

A: A taxable event is any event that triggers a tax liability under the Internal Revenue Code. This includes income from wages, investments, and other sources, as well as certain transactions such as sales of property. Generally, any time money is exchanged, it is considered a taxable event.

Practice Problems

Q: What is the difference between a deduction and a credit?

A: A deduction is an amount that is subtracted from a person's total taxable income. This reduces the amount of taxable income, and thus reduces the amount of taxes owed. A credit is an amount that is subtracted directly from the amount of taxes owed. Credits are generally more beneficial than deductions, as they reduce the amount of taxes owed directly, as opposed to reducing the amount of taxable income first.

Tax Law Practice Sheet

What is the definition of a taxable entity?
What are the three primary sources of tax law in the United States?
What are the differences between a tax deduction and a tax credit?
How do the Internal Revenue Service (IRS) and the Treasury Department interact in the tax law process?
What are the differences between a resident and a non-resident taxpayer?
What are the differences between an individual and a corporate taxpayer?
What are the differences between a tax return and a tax return amendment?
What is the purpose of the Taxpayer Bill of Rights?
How does the IRS enforce the tax law?
What are the different types of taxes that are imposed by the federal government?

Here's some sample Tax Law quizzes Sign in to generate your own quiz worksheet.

Tax Law Quiz

Test your knowledge and insight about Tax Law.

Problem	Answer
What is the difference between tax credit and tax deduction?
Name three items that are tax deductible for an individual.
Explain the difference between tax avoidance and tax evasion.
Who bears the burden of paying FICA taxes?
What are the penalties for not filing a tax return?
What is the difference between Federal tax and State tax?
What is a tax bracket?
What is the difference between progressive and regressive tax?
Explain the difference between gift tax and estate tax.
Can a taxpayer file an amended tax return electronically?

Tax Law Quiz

Problem	Answer
What is the purpose of tax law in the United States?	The purpose of tax law in the United States is to raise revenue for the federal government, and to provide incentives for certain behaviors or activities.
What is the difference between a deduction and a credit?	A deduction reduces the amount of income that is subject to taxation, while a credit reduces the amount of taxes that are owed.
What is the difference between a progressive tax and a regressive tax?	A progressive tax is a tax system where the tax rate increases as the taxable income increases, while a regressive tax is a tax system where the tax rate decreases as the taxable income increases.
What is the difference between a direct tax and an indirect tax?	A direct tax is a tax that is imposed directly on the taxpayer, while an indirect tax is a tax that is imposed on the sale of goods or services.
What is the difference between a corporate tax and an individual tax?	A corporate tax is a tax that is imposed on the profits of a corporation, while an individual tax is a tax that is imposed on the income of an individual.
What is the difference between a real property tax and a personal property tax?	A real property tax is a tax that is imposed on real estate, while a personal property tax is a tax that is imposed on personal property, such as cars, boats, and jewelry.
What is the difference between a sales tax and an excise tax?	A sales tax is a tax that is imposed on the sale of goods and services, while an excise tax is a tax that is imposed on specific goods and services.
What is the difference between a flat tax and a graduated tax?	A flat tax is a tax system where everyone pays the same rate, while a graduated tax is a tax system where the tax rate increases as the taxable income increases.
What is the difference between a tax treaty and a tax exemption?	A tax treaty is an agreement between two countries that sets the terms for taxation of income earned in one country by a resident of the other country, while a tax exemption is a provision that exempts certain types of income or activities from taxation.
What is the difference between a tax shelter and a tax avoidance?	A tax shelter is a legal arrangement that reduces or eliminates tax liability, while tax avoidance is the use of legal methods to reduce or eliminate tax liability.

Tax Law Quiz

Questions	Answers
1. What is the definition of taxable income?	Taxable income is the total income of an individual or business entity that is subject to taxation. This includes wages, salaries, tips, commissions, bonuses, and other forms of income.
2. What is the difference between a tax credit and a tax deduction?	A tax credit is a dollar-for-dollar reduction of the amount of tax an individual or business owes. A tax deduction is an amount of money that can be subtracted from taxable income, thereby reducing the amount of taxes owed.
3. What is the difference between an estate tax and an inheritance tax?	An estate tax is a tax that is imposed on the estate of a deceased person. An inheritance tax is a tax imposed on the beneficiaries of the estate of a deceased person.
4. What is the difference between a personal exemption and a dependent exemption?	A personal exemption is an amount of money that can be deducted from taxable income for each taxpayer and their spouse. A dependent exemption is an amount of money that can be deducted from taxable income for each dependent of a taxpayer.
5. What is the difference between a progressive tax and a flat tax?	A progressive tax is a tax that is imposed on individuals or businesses based on their income level. A flat tax is a tax that is imposed at a fixed rate on all individuals or businesses regardless of their income level.
6. What is the difference between a capital gains tax and an income tax?	A capital gains tax is a tax imposed on the profits from the sale of investments such as stocks and bonds. An income tax is a tax imposed on the income of individuals or businesses.
7. What is the difference between a corporate tax and a personal tax?	A corporate tax is a tax imposed on the profits of a corporation. A personal tax is a tax imposed on the income of an individual.
8. What is the difference between a sales tax and a value-added tax?	A sales tax is a tax imposed on the sale of goods and services. A value-added tax is a tax imposed on the value added to a product or service at each stage of production or distribution.
9. What is the difference between a payroll tax and an excise tax?	A payroll tax is a tax imposed on the wages and salaries of employees. An excise tax is a tax imposed on the sale of specific goods or services.
10. What is the difference between a property tax and an excise tax?	A property tax is a tax imposed on the value of real estate or personal property. An excise tax is a tax imposed on the sale of specific goods or services.