Tax Assignment

Tax Assignment

Facts

Jill is a PhD accounting professor at Syracuse University. One of the benefits of teaching at SU is that employees can receive free tuition for up to-4 classes per year. Jill is considering obtaining another doctorate degree in finance to supplement her accounting degree or possibly an unrelated degree. Your assignment is to analyze the tax consequences for Jill.

Issues

Will the value of the 4 classes be included in Jill's taxable income? If so, how much?

Will the answer to #1 change if:

There were seats available in the classes Jill selected?

Jill was getting a law degree instead of another business degree?

Jill had a bachelor's degree, not a PhD, and was going for a Masters degree?

Jill had a Masters degree and was going for a PhD?

Jill was not a matriculated student?

Jill was going to school part time vs. full time?

Other issues or requirements related to education, fringe benefits, training. etc.

Analysis

Income tax is the largest source of revenues for the government, followed by the National Insurance Contributions. The smallest contribution in terms of revenues for the government comes from corporation tax. From April 6 of one year to April 5 of the next year is the period of the tax year. The previous tax year was April 6 2010 to April 5 2011. The dates of the tax year are quite odd, but they have been like this since the mid- 18th century. The United Kingdom adopted the Gregorian calendar in September of 1752, replacing the Julian calendar. There was a difference of 11 days between the two calendars, but the tax authorities did not want to lose out on the 11 days of tax revenues. Hence they set the odd dates for the tax year.

Another name for the tax year is Fiscal Year, but it is different from the Financial Year. The Financial Year is used for the purposes of corporation tax. The period of the Financial Year is from April 1 to March 31.

A company can benefit from the strategic advantage gained from the use of technology in its daily operations. It is not necessary for the technological change to be a major one, because even a small change can have a significant impact. This is contrary for firms not engaging in technological advances. There are technologies like process technology and information technology that add value to the operations management of the organization.

There are two different levels of government that are involved in taxation. One is the central government (HM Revenue and Customs) and the other is the local government. The revenues of the central government comprise mainly of income tax, value added tax, National Insurance contributions, corporation tax and fuel duty. The revenues of the local government are collected from the grants by the central government funds, Council Tax, business rates in England and Wales and fees and charges like the on- street parking charges. There is a prescribed order according to which the assessment for the taxpayer's income is ...