Chapter 6 - Intro to Deductions

Question 1

Medicare surtax on high income

Answer 1

.9%
$250,000 MFJ
$200,000 single

Question 2

Self employed individuals health insurance premiums

Answer 2

Self employed individual can deduct 100% of health insurance premiums paid for themselves and their dependents as an adjustment to income (above the line) - not permitted to deduct their own insurance in determining business income

Question 3

AGI phaseout of IRA deductability

Answer 3

Single $68,000 - $78,000
MFJ $109,000 - $129,000

Question 4

Educator expense deduction

Answer 4

$300 - above the line

Question 5

Student loan interest deduction

Answer 5

$2,500 above the line

Question 6

Above the line deductions

Answer 6

1. Educator expenses
2. HSA contributions
3. Moving expenses (military)
4. 1/2 self employment tax
5. Qualified plan contributions
6. Self employed health insurance
7. Penalty on early withdrawal of savings
8. Alimony paid (prior to 12/31/2018)
9. IRA deduction
10. Student loan interest
11. Tuition and fees

Question 7

Trade or business expenses must be

Answer 7

Ordinary
Necessary
Reasonable

Question 8

Startup expenses

Answer 8

Business must be purchased
For unrelated line of business
up to $5,000 of start up costs
amount over $5,000 amortized over 180 months
For related line of business
Expenses deducted currently

Question 9

IRA deductibility formula

Answer 9

(AGI - lower phaseout threshold)/phaseout threshold range=phaseout % x contribution amount = non deductible portion

Question 10

Roth phaseout

Answer 10

Single $129,000 - $144,000
MFJ $204,000 - $214,000

Question 11

Student loan MAGI phaseout

Answer 11

Single $70,000 - $85,000
MFJ $145,000 - $175,000

Question 12

QBI

Answer 12

Less of 20% of QBI or 20% of taxable income

Question 13

Casualty & losses

Answer 13

If not declared a national disaster then it can not be deducted

Question 14

Mortgage interest limitation

Answer 14

up to $750,000 loan
Prior to 2017 $1,000,000