5 - Deductions from AGI, Credits, AMT and Limitations

Question 1

Can taxes be deducted if paid for by another person?

Answer 1

No, only taxes levied and paid are deductible by the taxpayer.

Question 2

What expenses of itemized deductions subject to 2%-of-AGI Exclusion?

Answer 2

Hobby expenses, Unreimbursed employee expenses, Tax preparation fees, and Investment fees (Harry Uses Tax Information)

Question 3

What expenses of Employee Expenditures are subject to 2%-of-AGI Exclusion?

Answer 3

Home office expense, Union dues, Professional dues and memberships, Uniforms, Job-seeking expenses, Entertainment expenses, Transportation expenses, Subscription to business journals, Travel expenses, Outside salesperson expenses, Education expenses (Harry Usually Prefers Using Journal Entries To Show Total Operating Expenses)

Question 4

Education expenses are deductible if…

Answer 4

the education maintains or improves skills required of the individual in his/her employment.

Question 5

What stipulation can home equity indebtedness be deducted?

Answer 5

Only to the extent the debt does not exceed fair market value of the residence, reduce by any acquisition indebtedness.

Question 6

Medical expenses calculation for improvements that increase the value of the home…

Answer 6

Cost of the improvement - the increased fair market value of the improvement.

Question 7

Lifetime Learning Credit is limited to what?

Answer 7

20% of the first $10,000 paid