Tax liability for Clients Growing Business
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Your client has a growing business (structured as an partnership). She realizes that given her low AGI at this point in time, she will pay more federal taxes. However, once she can generate a higher AGI, she feels confident that all of the "tax breaks for the rich" will kick in and lower her tax liability to a very low level.
What might you say to your client on this matter as she is expecting you to deliver what she expects in terms of a lower tax rate.
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Solution Summary
This solution of 232 words defines the concept of AGI and how relates to tax liability for a client's growing business. It discusses the implications of a low or high AGI on the scenario. References used are included.
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Look up AGI - any general definition will do, this one is from Wikipedia;
"For United States individual income tax, taxable income is adjusted gross income (AGI) less allowances for personal exemptions and itemized deductions. Adjusted gross income is total gross income minus specific items laid out in the tax code.[1] For most individual tax ...
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