Tax Accounting

Is the planning of business strategies based on tax consequences and

avoidance.

CURRENTLY IRC GOVERNED THE FOLLOWING TAXES

•Income taxes•Estate and gift taxes• Employment taxes•Miscellaneous excise taxes• Alcohol, tobacco, and certain other excise taxes• Procedure and administration• The joint committee on taxation• Financing of presidential election campaigns•Trust fund code• Coal industry health benefits• Group health plan requirements

Tax Accounting is governed by the Internal Revenue Code

BASIC TERMS USED IN TAX

•Tax return•Tax form•Internal revenue services•Tax planning

A Tax Return is a tax form that can be filed with a government body to declare liability for taxation in various countries.

The IRS is responsible for collecting taxes and the interpretation and enforcement of the internal Revenue Code

Federal Board of Revenue: The Federal

Board of Revenue (more commonly known by its

initials as FBR) is the semi-autonomous,

supreme federal agency of Pakistan

FEDERAL BOARD OF REVENUE

•Auditing• enforcing • collecting revenue

Tax Form: IRS tax forms are used for taxpayers and tax-exempt

organizations to report financial information to the (IRS) of the united

states

TAX FORM:

•5500•990•1040•Form 8889•Form W-2

Is a broad term that is used to describe the processes utilized by individuals

and businesses to pay the taxes due to local, state, and federal tax agencies.

One of the main focuses of tax planning is to apply current tax laws to the revenue that is received during a given tax period

MINIMIZING THE TAX BURDEN:

•To reduce the adjusted gross income for the tax period •To increase the amount of tax deductions•Effective tax planning has to do with the use of tax credits

Of Taxation System

Revenue

Redistribution

Repricing

BASIC TYPES OF TAXES:

Proportional tax

Progressive tax

Regressive tax

Direct tax

Indirect tax

A Proportional Tax is a tax whose burden is the same proportion of

income for all households.

A Progressive Tax is a tax whose burden, expressed as a percentage of

income, increases as income increases.

A regressive tax is a tax whose burden, expressed as a percentage of income, falls

as income increases.

The Direct Taxes whose burden falls directly on the Tax payers

The Indirect Taxes which the burden is passed on to a third party

DOUBLE TAXATION:

A taxation principle referring to income taxes that are paid twice on the same source of earned income

AGREEMENT FOR AVOIDANCE OF DOUBLE TAXATION

Austria Belgium Bangladesh Canada China Denmark EgyptFrance Finland Germany Greece India Indonesia IranIreland Japan South Korea Lebanon Libya Italy Malta Mauritius Saudi Arabia Singapore Poland Romania Switzerland U.K. Thailand Sri Lanka Sweden Turkmenistan Turkey Tunisia U.S.A Kazakhstan U.A.E.

Is an electronic facility provided by the FBR to the taxpayers to file income tax returns/statements.

Is simply a way to serve your documents using internet and taxes online system.

MAJOR FUNCTION PERFORMED BY FBR BY HELP OF E-FILING

•Collection of Taxes•Keeping record of taxpayers •Issuing active taxpayers list more easily and effectively.•Issuance of NTN and sales tax numbers.

BENEFITS OF E-FILING:

Convenience

Security

Accuracy

Proof of Filing

Direct Deposit

If you are doing business PAY PROFESSIONAL TAX

If you are selling the goods in business PAY SALES TAX

If you are getting goods from other State/Abroad PAY CENTRAL SALES TAX, CUSTOM DUTY & OCTROI

If you are getting profits in selling goods PAY INCOME TAX

By way of dividend you are going to distribute profit Pay dividend distribution Tax

If the factory is manufacturing the goods PAY EXCISE DUTY

If you having Office / Warehouse/ Factory PAY MUNICIPAL & FIRE TAX

Having staff in business PAY STAFF PROFESSIONAL TAX

If you are doing business in Millions PAY TURNOVER TAX else Pay Minimum Alternate Tax

If you are taking out over 25,000 Cash from Bank PAY CASH HANDLING TAX

If you are taking your client for lunch & dinner PAY FOOD & ENTERTAINMENT TAX

If you are going Out of station for business PAY FRINGE BENEFIT TAX

If you are taking or giving any Service/s PAY SERVICE TAX

If you have any Wealth PAY WEALTH TAX

If you are going Cinema or Resort for entertainment PAY ENTERTAINMENT TAX

If you purchased a House PAY STAMP DUTY & REGISTRATION FEE

while Traveling PAY SURCHARGE

some Additional Tax PAY EDUCATIONAL, ADDITIONAL EDUCATIONAL & SURCHARGE ON ALL THE CENTRAL GOVT.'s TAX

If you do not pay any tax at time PAY INTEREST & PENALTY