Complete the text with the words and phrases from the box below

Exercise 11.

Read the text and answer the following questions that can be further included into the dialogue.

Exercise 10. How Sole Proprietors Are Taxed

B)

A)

Exercise 9. After-reading tasks

Decide whether the following statements are True or False, correct the false statements:

1. Corporation is a legal entity subject to double taxation: it’s taxed on income, and its owners are taxed on their income, dividends.
2. The income tax rate depends on the income: the larger the income, the higher the tax rate.
3. The range of tax rate is no higher than 35%.
4. A company is taxed on all profits it gains.
5. It is legitimate to deduct all business expenses in order to reduce the taxable income.
6. Employees’ salaries are deducted from profits, and the taxes are paid on net profit.
7. Such expenditures as bonuses don’t help reduce the amount of tax payable

You’re preparing a tax return for your corporation. Which of these expenses will you deduct from the income:

1. repair of the factory equipment – 3 machines;
2. TV commercial
3. delivery of the products by 4 leased vans from the warehouse to the retailer;
4. purchase of raw materials;
5. repair of the Marketing Director’s BMW car;
6. business trips of sales personnel;
7. the Managing Director’s jubilee grand party;
8. telephone and electric energy bills;
9. rent payments;
10. expenditure to buy a yacht for corporate holiday trips;
11. construction of a new warehouse.
12. salaries for the employees.

Do sole proprietors have to pay taxes on their personal or business income?

What profits of the business are taxed?

Are the savings on the bank account also taxed?

How is it possible to reduce the taxable income?

Which business expenses are deductible?

What are the accounting rules for a sole proprietor?

What do the self employment taxes mean?

rate; tax returns; taxable income; taxpayer; business entities; individual owners; tax deduction; income taxes; flat tax rate; business profits; deduct; expenses  

Corporations are taxed in a different manner than other 1) …. …..In fact, corporations are the only types of business that pay 2) ….. …..on their profits. Partnerships, sole proprietorships, and limited liability companies (LLCs) are not taxed on 3) ….. …... Actually, the business profits "pass through" to the business' owners, who in turn report the business income (or losses) on their personal income 4) ….. …….

Corporations are taxed separately from their 5) …… …... Incorporating a business may prove to be a good way to save on taxes, especially if the 6) …… intends to reinvest the profits in the business. For example, if a taxpayer's business is incorporated, the first $75,000 of the business's profits will be taxed at a lower 7) ….. than if the taxpayer claimed them on his or her personal income tax return. However, there are exceptions: personal service corporations like legal, accounting, consulting, and medical groups must pay a 8) …. ….. of 35 percent on their

9)…. …….

Besides business 10) …….. corporations can 11) ………employee benefits, such as health insurance and up to $50,000 in life insurance. This deduction applies to owners who are also employees of the company. The IRS permits incorporated businesses to treat their owners as employees for benefits purposes, allowing these owners to take the 12) ….. ….. on their own as well as their employees' benefits.

Дата добавления: 2015-03-31