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Accounting Question Outline
I.
II.

What is Ordinary Income?
What is a Head of Household?

III.

What is the long-term capital gain tax, and how does it compare to ordinary income tax?

IV.

What are qualified dividends?

V.

What is the Medicare investment tax?

VI.

What is the Alternative minimum tax?

VII.
VIII.
IX.
X.

Identify 5 exclusions from gross income.
What is adjusted gross income?
What is the basic standard deduction?
What is a Letter Ruling?


Running head: ACCOUNTING QUESTIONS

Accounting Questions
Student’s Name
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2

ACCOUNTING QUESTIONS

Accounting Questions
What is Ordinary Income?
Ordinary Income is an income that an individual or an organization earn, but it is taxable
at the normal rates like wages and interests from bonds that a company has and from
commissions given to individuals. It exists in two forms, business income, and personal income.
From a business income perspective, it is that income earned from daily operations of business
apart from income derived from the sale of long term assets like land (Slemrod & Bakija, 2017).
As such, the sale of property or equipment that gives much money to a company cannot be
considered as ordinary income. From a personal income perspective, it is the sort of cash that an
individual gets that is subject to the income tax. It is taken directly from an individual income
after which the rest of the money is given to an individual as wages or salaries. It can be
measured either yearly or monthly depending on the regularity of the income of an individual or
an organization.
What is a Head of Household?
Head of a home is a term that is used in filling a tax return where a person who is paying
more than half of the cost used in supporting qualified person gets higher standards in deduction
and lower rates than other taxpayers. In most of the situations, the government always want the
payment of the tax to be equitable to all (Saez, 2017)....