200 WordsAPA formatted references due May 6 3:00 a.m.You have just been notified by your firm’s...

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200 WordsAPA formatted references due May 6 3:00 a.m.You have just been notified by your firm’s Managing Principal that another 
financial planner has decided to leave the firm. Some of her clients will be 
notified that you will be their new point of contact for their planning. 
The former planner had a fairly diverse group of clients and you plan to meet 
with each of them to help better understand their financial situations and see 
if any of them could benefit from your specific approach to financial planning 
that comes from a taxation perspective.
The first client, Mr. and Ms. Hewitt, need assistance in understanding more 
about what is taxable and how their tax bracket keeps changing.

Compose a professional note that explains the following:

The various types of income that is subject to taxation
A marginal tax bracket, how it is determined, and what it means

Robert · Accepted Answer

INDIVIDUAL INCOME TAX  1 

Individual Income Tax 
Student Name: 
Course/Number: 
May 06, 2013 
Instructor Name:  
INDIVIDUAL INCOME TAX  2 
 
Various Type Of Income Subject To Taxation 
Income is defined by IRS to be any money that is received during the year. Gross income 
would refer to all the income that is received in the form of money, goods, property and income 
from sale of property and services that is not exempt. Taxable income would mean gross income 
less any allowable tax deductions. In other words, the income that is subject to income tax.  
Four primary categories of income are: 
Salaries and Wages – Taxable at the normal tax rates and are subject to normal social 
security and medicare taxes. Salary and wages for each year would be reported in Form W-2 at 
the beginning of the following year. The amount withheld for federal income tax, state income 
tax and social security and medicare taxes is reported therein. 
Earnings from Self-Employment - Earnings from self-employment are subject to the same 
income tax rates as wages or salaries.

200 WordsAPA formatted references due May 6 3:00 a.m. You have just been notified by your firm’s Managing Principal that another financial planner has decided to leave the firm. Some of her clients...

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