FINAL R1&R2 Flashcards
What is included in “taxable interest”?
interest on;
- General investment accounts (money market account)
- federal obligations
- Interest on US treasury Bonds
- construction loan
- Federal and state income tax refund
What interest is NOT taxable?
- State and muni bond interest
- auto loan interest
What are the conditions for series EE bonds?
- Purchaser of the bonds must be the sole owner of the bonds (or joint owner with his or her spouse)
- for post 1989-> taxpayer is 24+ yrs old and used to pay higher edu expenses
How are withdrawals from traditional IRAs taxed as?
As ordinary income
What are the limits for 2020 QBI?
Single= 163,300 -213,300 MFJ = 310,200 - 426,600
How do you calculate dependent income?
Taking unearned income less $1,100 (std deduction) - $1,100(taxed at child’s marginal rate)
What is the threshold for individual CC?
up to 60% in cash
up to 30% for other (propert/stocks)
How will $10,000 taken out of your IRA be recognized as?
$0 penalty and $10,000 as income
What amount of qualified defined contribution plan is taxable?
Nothing is taxable until distributed
How to calculate penalty tax on withdrawal on IRA?
- calc regular income tax on amount withdrawn from the IRA (withdraw * marginal rate)
- Penalty tax = 10% * withdraw amount
Add 1+2= total tax liability
Tax deductible? If so, For or From AGI:
Roth IRA contribution?
Not deductible (even earnings and distributions as well)
Tax deductible? If so, For or From AGI:
Repair and maintenance costs?
Not Deductible unless casualty loss
Tax deductible? If so, For or From AGI:
Medical insurance premium
Dedeuctible from AGI
Tax deductible? If so, For or From AGI:
Homeowners expenses?
Not deductible
Tax deductible? If so, For or From AGI:
Investment interest expense
Deduction from AGI