Ch 6 - Questions (Itemized Deductions) Flashcards
What are common itemized deductions?
Medical and dental expenses, taxes, interest expenses, charitable contributions, and prior-year tax prep fees.
What does a taxpayer use when itemizing deductions?
Schedule A and form 1040
What is debt incurred to acquire, construct, or improve a taxpayer’s principal or secondary residence?
Acquisition Debt
Are charitable contributions deductible?
Generally yes, if qualified charitable org, and taxpayer uses Schedule A and qualifies to itemize.
What does Medicare Part A cover?
Hospital expenses, care in skilled nursing facility, hospice care, and some health care.
Do people have to pay Medicare Part A premiums?
Not usually, if they or their spouse paid medicare taxes while working.
What does Medicare Part B cover?
Doctors’ services, outpatient care, medical supplies, and preventive services.
Do people have to pay a premium for Medicare Part B?
Yes, most participants have to pay a monthly premium, which is usually withheld from Social Security benefits.
What does Medicare Part D cover?
Prescriptions.
Do people have to pay a premium for Medicare Part D?
Yes, and it is withheld from social security benefits.
How much is the standard deduction for 2017
$6350 Single, and MFS
$9350 for HoH
$12700 for MFJ, QW
What things increase a taxpayer’s standard deduction?
Being age 65 or older, blindness
Which will a taxpayer choose, itemized deductions, or the standard deduction?
Whichever is larger. Also, requires 1040.
If a couple is MFS, and one spouse wishes to itemize, that happens?
The other spouse should itemize as well, otherwise their standard deduction is reduced to $0.
Why might a taxpayer itemize deductions on their federal return, even if their deduction total less than the standard deduction?
Itemizing on their Federal return allows itemizing on state returns, which can save tax dollars.
If a person chooses to itemize when the standard deduction is higher (e.g. so they can itemize on their state return) what should they do?
Mark the box on Schedule A, line 30.
What sections are on the Schedule A?
Medical and Dental expenses Taxes you paid Interest you paid Gifts to charity Casualty and Theft Losses Job expenses and certain misc deductions Other misc deductions
What is included in deductible medical expenses?
Payments made for the diagnosis, cure, treatment, or prevention of disease, and the costs of treatments affecting any part or function of the body. May also include equipment, supplies, transportation related to medical care, and certain health insurance coverage for the taxpayer, spouse, and dependents.
Are medical expenses paid with pre-tax dollars deductible on Schedule A?
No. Only after-tax dollars.
What may be used to determine what medical or dental expenses are deductible on Schedule A?
IRS Publication 502; Medical and Dental Expenses
Are medical expenses paid by a taxpayer for his spouse deductible?
If they were married at the time the expenses were incurred or at the time the expenses were paid.
Can a taxpayer deduct medical expenses paid for a dependent claimed under a multiple-support agreement?
Yes. The persons who waive the exemption may not deduct medical expenses paid for the dependent.
If divorced or separated parents who lived apart during the last 6 months of the year supported a child together, who is able to deduct the medical expenses.
Each parent, whether custodial or non-custodial, is allowed to deduct the medical expenses actually paid for the child during the year. The deduction may be taken even if the other parent is allowed to claim the exemption for the child.
Are prescriptions deductible?
Yes, if the expense has not been reimbursed by insurance, and is not purchased or imported from another country (unless it is legal in the US and the FDA allows importing the drug by individuals)