Chapter 2 Flashcards
Whats the educator deduction?
Can deduct up to $250 (500 MFJ) if a kindergarden to 12th grade teacher
Who cannot receive the IRA deduction?
Rich and in retirement plan
Whats the amount of deduction for IRA contributions?
Lesser of 5,500 (MFJ 11,000) or individuals compensation (over 50 can deduct another 1K)
Whats the tax free amount for Education savings account?
2,000 per beneficiary as long as its used for qualified exp
What is the loan interest deduction?
Limited to 2,500
Self employed taxpayer max annual deductible amount?
Lesser of 53,000 or 25% of net earnings
What are the Charitable Contributions Limit?
Overall limit 50% of AGI
-Cash = may be all 50%
-general property = lesser of basis or FMV
Overall limit 30% of AGI
-LT appreciated property is limited to the lesser of 30% OF remaining amount to reach 50% after contributions
Whats the carryover excess of charitable contributions
5 years
What is the excess limitation of casualty/theft loss, medical, job and certain misc deductions?
10% = casualty/theft loss, medical 2% = Misc, job and certain misc deduct
Child and dependent care credit max?
1 dependent is 3,000 2 or more is 6,000
Elderly and/or perm disabled Credit?
15% of eligible inc for indiv who are 65 or older or disabled
American Opportunity credit?
max credit is 2,500. 100% of first 2,000 and 25% of next 2,000
Lifetime learning Credits?
Max credit is 2,000. (20% of exp up to 10,000)
Adoption credit?
13,400
Foreign Tax Credit?
allowable credit lesser of foreign taxes paid or (taxable inc from foreign x US tax/ taxable inc + exemptions)
Child tax Credit?
$1,000 for each child
Small employer pension plan start up cost credit?
up to 50% of the first 1,000 of qualified start up costs for establishing a new qualified pension up costs for the 3 years
small bus health care tax credit?
up to 50% of plan premiums
residential energy credits
max credit of 15% of qualifying non business energy or improv max credit of $500
What are the adjustments to AMT? Are they increase or decreases to AMT?
PANIC TIMME Passive activity losses Accelerated depreciation Net operating loss Installment income of a dealer Contracts % of completion only
Tax "deductions" Interest deduction on home equity loans Medical deductions Misc deductions not allowed Exemptions
PANIC=increase or decrease
TIMME=only increase
What are the tax preference items? Do we add or subtract back to AMT?
PPP
Private activity bond interest income
Percentage depletion excess over adj basis prop
Pre-1987 accelerated depreciation
Always add back
how do you treat prior year AMT tax?
credit to reduce reg tax for current year
Which AMT credits can reduce AMT?
FACCE Foreign tax credit Adoption Child tax Contributions to retirement plan credits Earned income credit
What is the estimated tax required minimum?
-$1,000 or more tax liability
-inadequate tax est
90% of current years tax or
100% of last years tax
Gross income in excess of 150,000 (75K MFJ) in prior year 110% of prior years liability
