ACC204Unit4Chapter 6 Discussion

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Chapter 6 Discussion Chapter 6 Discussion The goal of this course discussion is to apply what you have learned after reading chapter material and reviewing PowerPoint presentations. Keep in mind that this discussion question will help prepare you for homework and future assessments, so it is important that you understand the information and actively participate in discussions. To supplement your learning and enhance your understanding, you may also have to conduct research outside of course provided material. Discussion Question Requirements: 1. Pick 1 of the following questions and in a minimum of two paragraphs, answer the question no later than Wednesday by 11:59 p.m. 2. Find 2 peers that answered the opposite question and review. Then, in no less than 1 paragraph, comment with supplemental information and/or why you found it helpful, informative, etc. You must present new ideas and/or thoughts, merely stating that you agree/disagree or the peer did a good job is not enough to earn full points. 3. Please note, a paragraph is considered a minimum of 4-6 complete sentences. 4. Students will not be able to see peers' postings before posting their initial post. Once you make your initial post, you are not permitted to edit it more than 10%. If it is discovered that you have done so, you will receive zero points. 5. Cite all sources - you must provide the exact link to the reference. Please keep in mind that citing sources does not mean you can directly copy and paste information from the source and use it as your own. You also cannot only change a few words from a source; all work must be in your own words. If copying/pasting is found or the submission is not in your own words, you will receive a zero - no exceptions. This also includes replying to peers' postings. Please see EGCC's college catalog for information about academic dishonesty. Please answer one of the following questions: Caesar is a retired jockey who takes monthly trips to Las Vegas to gamble on horse races. Caesar also trains racehorses part time at his Texas ranch. So far this year, Caesar has won almost $47,500 during his trips to Las Vegas while spending $27,250 on travel expenses and incurring $62,400 of gambling losses. Explain how Caesar's gambling winnings and related costs will be treated for tax purposes. Explain why Congress allows self-employed taxpayers to deduct the cost of health insurance as a for AGI deduction when employees can only itemize this cost as a medical expense. Would a self-employed taxpayer ever prefer to claim health insurance premiums as an itemized deduction rather than a deduction for AGI? Explain. This reduction equalizes the playing field for workers and self-employed people. Healthcare costs are essentially a personal expense. Employees, on the other hand, are typically exempt from paying insurance premiums because their employers cover them as part of their compensation. Employers can deduct premiums paid on their behalf as a compensation expenditure, and employees can deduct the value of premiums paid on their behalf from their taxable income. Because they do not have an employer to insure them, self-employed taxpayers are responsible for their own health insurance costs. Self-employed taxpayers can deduct personal health
insurance premiums as a percentage of their adjusted gross income rather than as itemized deductions, ensuring that workers and self-employed taxpayers are treated similarly. As a result, self-employed taxpayers can produce business revenue and use it to pay for health insurance premiums, which they can deduct as part of their AGI deduction (completely offsetting the business income they used to pay the premium). Because AGI deductions receive preferred treatment over itemized deductions, a self-employed taxpayer should never claim health insurance premiums as an itemized deduction rather than an AGI deduction. Reference: Ayers, B., Barrick, J., Lewis, T., Robinson, J., Weaver, C., & Worsham, R. (2021). Chapter 6: Individual Deductions. In B. Spilker (Ed.), McGraw Hill's Taxation of Individuals and Business Entities (13th ed., pp. 213). McGraw-Hill Education. Discussion Responses: Hi Sheri, I think you did a great job on this response. Because Caesar happened to be in Vegas for his horse races, it makes sense that he wouldn't be able to deduct the traveling expenses. Naturally, when you make over $600 in gambling winnings, you are required to include the amount on your tax return. With winnings at $47,500, there is no way that Caesar will avoid paying taxes on the amount. Secondly, Caesar did incur some losses, so he will be able to get an itemized deduction. This deduction cannot be more than the winnings that were received. Thank you for this post. It was very clear and informational. Hi AnnMarie, I think you did a fantastic job with this discussion response especially because it was straight to the point. It's understandable that Caesar wouldn't be allowed to deduct his travel expenditures because he was in Vegas for his horse races. Naturally, if your gaming winnings total more than $600, you must report them on your tax return. Caesar will not be able to dodge paying taxes on his winnings, which total $47,500. Second, Caesar incurred some losses, allowing him to claim an itemized deduction. This deduction cannot exceed the amount of prizes received. This means that 14,900 of the losses he received would not count. Thank you for writing this response. It was really straightforward and informative.
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