Four Structure Variables

Corporate Taxes - Lecture 2

This week we will introduce the four structure variables that affect the tax consequences of transactions. The ability to control these variables will impact how the tax payer can structure their transactions for tax planning purposes. You will also learn about the difference between tax avoidance and tax evasion and explicit tax and implicit tax. As an introduction to planning, the concept of income shifting or tax deductions can substantially improve or affect cash flows. It is important to realize that deferring paying taxes may not always be the best strategy. For example, if client needed cash now from a retirement account, a careful analysis of the potential cash flows from the investment vs. any associated penalties for early withdrawals is critical. In the following video, the presenters talk about tax exemptions, tax deductions and tax credits. For example, tax exemptions are given to all Americans, basically they are a deduction against our income to determine how much taxes we pay. To make the YouTube video larger, click on the [ ] in the lower right corner.

Introduction into Income Taxes (Income Tax Planning Series for 2013)