2.2 - Itemized Deductions Flashcards
What is the standard deduction amount for each taxpayer’s filing stats?
Single = 12,500
HOH = 19,400
MFJ = 25,900
MFS = 12,950
Standard deduction are called what?
Below the line (AGI) deductions
The standard deduction for a single taxpayer who is either 65 or older OR blind increases by what amount?
The standard deduction for a single taxpayer who is 65 or older AND blind increases by what amount?
Just one = 1,750
Both = 3,500
The standard deduction for a married taxpayer who is either 65 or older OR blind increases by what amount?
The standard deduction for a married taxpayer who is 65 or older AND blind increases by what amount?
One = 1,400
Both = 2,800
The standard deduction amount for a taxpayer who is a dependent of another taxpayer is:
The greater of:
$1,150
OR
Earned income plus $400
Where do itemized deductions go (what schedule) for personal items, business, and rentals?
Personal = schedule A
Business = schedule C
Rental = schedule E
Itemized deductions are referred to as:
From AGI deductions
What items are included in itemized deductions?
Medical expenses
State, local, and foreign taxes
Interest expense
Charitable contribution
Causality losses
Gambling losses
Individuals are usually “cash basis” so in order to be ax deductible, the item must have been:
Incurred as an expense
Paid or charged to a credit card before year end
What is the formula used to calculate the amount of qualified medical expenses that can be deducted?
Qualified medical expenses
- insurance reimbursement
- 7.5% of AGI
= Deductible Medical Expenses
What types of medical expenses are deductible?
Medicine and prescription drugs
Doctors
Medical and accident insurance premiums
Necessary surgeries
Transportation to medical facility
Physically disabled costs
What portion of income taxes are deductible?
- estimated taxes paid during the year
- taxes withheld from paycheck
- assessments for a prior year’s tax that are paid in the current year
- refunds are included in gross income if the tax was deducted in a prior year
If the taxpayer chooses to deduct sales tax, the amount is determined by:
The total amount of actual general sales taxes paid
OR
The relevant IRS table
(A taxpayer may deduct either income taxes or sales taxes, not both)
What taxes are not deductible?
Federal tax (including social security)
Inheritance taxes for states
Business (schedule C) and rental property (schedule E) taxes
What qualifies as a second home?
A residence that is used for personal purposes for at least 14 days in a tax year
