Becker REG 2

Question 1

What are ADJUSTMENTS to GI typically called?

Answer 1

Deductions to arrive at AGI

Question 2

How much can be deducted for qualified educator expenses?

Answer 2

$250 - single

$500 - MFJ with both spouses as educators

Question 3

Who can qualify as an educator?

Answer 3

1. K-12 teachers
2. Instructors
3. Counselors
4. Principals
5. Aide with at least 900 hours/school year

Question 4

Will homeschooling costs and non athletic supplies for courses in health or physical ed qualify as educator expenses?

Answer 4

No

Question 5

What must qualified educator expenses be reduced by?

Answer 5

1. Excludable US series EE and 1 savings bond interest from Form 8815
2. Nontaxable qualified state tuition program earnings
3. Nontaxable earnings from coverdell ed savings acct
4. Any reimbursements received for these expenses

Question 6

What are the 5 IRA plans?

Answer 6

1. Deductible IRA
2. Nondeductible IRA
3. Roth IRA
4. Coverdell Ed Savings Acct
5. Keogh Plan

Question 7

What are some characteristics of deductible IRA?

Answer 7

1. Earnings accumulate tax-free
2. Withdrawals are taxable
3. Cannot deduct contributions if BOTH conditions bellower met
   a. Excess AGI
   b. active participant in another qualified plan

Question 8

GR for IRA deduction?

Answer 8

Deduct LESSER of $5,500 or individual’s compensation

MFJ - $11,000

Question 9

Define compensation for IRA deduction purposes

Answer 9

Salary
Wages
Alimony
Bonuses
Commissions

SWAB-C

Question 10

What are compensations NOT included for IRA calc of compensation?

Answer 10

PAID

Pensions
Annuities
Interest
Dividends

Question 11

What is the $ amount of add’l catchup contributions?

Answer 11

$1,000

Question 12

At what AGE can people contribute the add’l catchup contributions?

Answer 12

50 years of age or older

Question 13

What are some characteristics of ROTH IRA?

Answer 13

1. Contributions are NOT deductible when made.
2. Distributions, principal and interest, are tax free for qualified distributions.
3. Roth contributions are typically amount remaining after reg IRA

Question 14

Define qualified nontaxable distributions

Answer 14

Roth IRA earnings made at least 5 years after the first day of the year of the taxpayer’s first contribution to a ROTH IRA and:

1. after taxpayer reaches 59 1/2 or beneficiary after taxpayer’s death or because taxpayer is disabled or for first time home buyer.

Lifetime $10K limit for home buyers.

Question 15

What are some characteristics of Coverdell Ed savings Acct?

Answer 15

1. $2K/beneficiary max annually
2. Earnings are taxfree
3. Principal and interest distributions are tax free
4. Any amount when bene turns 30 must be distributed
   a. To beneficiary, taxable and assessed 10% penalty
   b. tax-free rollover to another fam and no penalty

Question 16

Limit for student loan interest expense?

Answer 16

$2,500

Question 17

HSA pretax contributions?

Answer 17

$3,350 - single

$6,650 - family

Question 18

How much can HSA contributions be increased by once taxpayer reaches 55?

Answer 18

$1k

Question 19

Define high deductible plan for HSA

Answer 19

$1,300 - SINGLE

$2,600 - family

Question 20

What are nondeductible moving expenses?

Answer 20

Meals
Pre-move house hunting
expenses of breaking a lease
temporary living expenses

Question 21

What are misc itemized deductions?

Answer 21

1. Unreimbursed business expenses
2. Educational expenses
3. Uniforms
4. Business Gifts
5. Business use of home
6. Employement agency fees
7. Expenses of investors
8. subscriptions to professional journals
9. tax prep fees
10. debt card convenience fees incurred to pay income tax
11. Activities not engaged in for profit

Question 22

Define Alternative Minimum Tax

Answer 22

Excess of the tentative AMT over the regular tax