Deductible vs. Nondeductible Flashcards
Deductible or Nondeductible?
Alimony payments made pursant to a divorce before December 2018
Deductible
Deductible or Nondeductible?
Alimony payments made pursant to a divorce after December 2018
Nondeductible
Deductible or Nondeductible?
Business expenses
COGS, wages, legal, supplies, automible expenses, 50% of meals, depreciation of business assets, employee benefits, state/local taxes, interest expense on business loans
Deductible
Deductible or Nondeductible?
Salaries paid to the sole proprietor
Nondeductible
Deductible or Nondeductible?
Federal income tax
Nondeductible
Deductible or Nondeductible?
Personal portion of auto/meal expense, interest, taxes, and insurance
Nondeductible
Deductible or Nondeductible?
Bad debt of a cash basis taxpayer
Nondeductible
Deductible or Nondeductible?
Charitable contributions and entertainment expenses
Nondeductible
Deductible or Nondeductible?
Medical expenses like:
* Prescribed medications and drugs (including medicare part D premiums)
* Doctors
* Medical and Accident Insurance Premiums
* Medically neccessary surgery
Deductible
Deductible or Nondeductible?
Medical expenses like:
* Elective surgery
* Illegal Drugs
* OTC Medicine
* Vitamins
* Life Insurance
* Funeral-related expenses
Nondeductible
Deductible or Nondeductible?
Federal Taxes
(including social security)
Nondeductible
Deductible or Nondeductible?
Inheritance Taxes for States
Nondeductible
Deductible or Nondeductible?
Rental Property Taxes (on Schedule E)
Nondeductible
Deductible or Nondeductible?
Business (on Schedule C)
Nondeductible
Deductible or Nondeductible?
Home Mortgage Interest up to $750,000
Deductible
Deductible or Nondeductible?
Home Mortgage Interest in excess of $750,000
Nondeductible
Because it is treated as personal interest
Deductible or Nondeductible?
Points to purchase a home
Deductible
Deductible or Nondeductible?
Personal Interest
Nondeductible
Deductible or Nondeductible?
Educational Loan Interest
Nondeductible
Because it is an adjustment for AGI
Home equity indebtedness incurred during a year is only deductible when…
used to buy, build, or substantially improve the taxpayer’s home that secures the loan
True or False
A charitable contribution deduction is not allowed for the value of services rendered to a charity
True
Deductible or Nondeductible?
Penalty for underpaying federal estimated taxes
Nondeductible
Deductible or Nondeductible?
Group-term life insurance premiums paid by corporation on employees’ lives, with the employees’ dependents as owners and beneficiaries of the policies
Deductible
They are deductible by the employer, unless the employer is a direct or indirect beneficiary
