[...]... explained later standard deduction for joint filers is doubled to twice that of the standard deduction for single persons through year 2008; the expansion of the 10% and 15% brackets for joint filers is effective through 2007 4The 5 6 Part I Introduction to Taxation and Its Environment industry for the harm done by cigarette smoking, it still has subsidy programs for tobacco farmers Washington is full... designed primarily for those who wish to provide an introduction to all entities before tackling the topics unique to individuals, the flexibility of this text makes it easy for those who wish to change the sequence of chapters For example, sufficient notes and references to basic concepts in the preceding chapters are included within Chapter 11: Income Taxation of Individuals making it easy for instructors... partner, John, our children and their spouses, and our grandchildren —KAREN A FORTIN part I INTRODUCTION TO TAXATION AND ITS ENVIRONMENT CHAPTER 1 AN INTRODUCTION TO TAXATION CHAPTER 2 THE TAX PRACTICE ENVIRONMENT chapter 1 AN INTRODUCTION TO TAXATION T CHAPTER OUTLINE Setting the Stage—An Introductory Case 3 An Introduction to Taxation 3 The Taxing Units and the Basic Income Tax Models 6 Choice of... are made for taxpayers who are blind andրor over age 65 qualify for head of household status, the taxpayer must be a single individual and maintain a home for a child or qualified dependent A single parent with a dependent child could qualify for head of household status 16To 13 14 Part I Introduction to Taxation and Its Environment return for 2007 Corporations, on the other hand, do not have any such... but a prepayment of the tax) is for the taxes withheld and for estimated tax payments Taxpayers are required to make some form of prepayment of the anticipated tax liability For corporations, this takes the form of estimated tax payments For most individuals, prepayments take the form of withholding on salary or wages If, however, the taxpayer has self-employment income or transactions resulting in... Introduction to Taxation EXAMPLE 23 Z Corporation in the previous example paid $67,500 in estimated tax payments It now only owes $500 in tax because its estimated tax payments offset the tax liability determined for the year The taxpayer may be entitled to other credits for having participated in certain activities, such as the research credit for specified research activities, or for having made... advanced topics for instructors who wish to challenge their students These advanced discussions relate to the other material within the chapters, but which our adopters and reviewers have indicated could be omitted to allow more time for the more critical material Summary Each chapter closes with a Summary of the most important topics introduced in the chapter, reinforcing important concepts for students... Chapter 1 An Introduction to Taxation SETTING THE STAGE—AN INTRODUCTORY CASE Wing Hue, an engineer from China with U.S residency status, recently obtained permanent employment with a U.S consulting firm Before coming to the United States, Hue developed a totally new system of gears for bicycles He has obtained a patent on his gear design and plans to solicit some venture capitalists for funds to begin manufacturing... web site associated with the text at www.thomsonedu.com /taxation/ dennis-escoffier to provide any additional updates Organization This text is ideal for schools with only one required tax course as it includes all the topics specified for the first course in the AICPA’s Model Tax Curriculum Its 12 chapters can be covered in one semester, with time for assessments, eliminating the need to omit chapters... taxpaying entities The primary focus of the text is on tax planning for individuals, C corporations, and flowthrough entities because of the latter’s effects on the taxation of individuals and C corporations The fiduciary has a vastly different role than a business A trust is established for a specific purpose, such as managing the assets for beneficiaries who are unable or unwilling to manage the assets . Image: © Glowimages Printer: West Eagan, Minnesota Taxation for Decision Makers, 2008 Edition Shirley Dennis-Escoffier and Karen A. Fortin COPYRIGHT © 2008, 2007 Thomson South-Western, a part of The Thomson.