Important 2 Flashcards by Khalid Amin

Kiddy tax threshold

2500

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Nanny tax threshold

2600
Withhold FICA from employee and submit 15.3%

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AMT add back

State and local tax
Personal exemption and standard deduction
Medical expenses
Incentive stock option exercise
Depreciation and depletion
NOL
Tax exempt private activity interest
Passive activity losses
Foreign tax credit
230,700 26% then 28%

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Which form is file with 1040 for Nanny Tax

Schedule H

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What are 2 QBI components

QBI component
REIT/PTP component

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What are QBI limits

182,100 - 232,100 ALL other
364,200 - 464, 200 MFJ

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What are QBI limits

182,100 - 232,100 ALL other
364,200 - 464, 200 MFJ

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Could you claim QBI on rental activities?

Only if it rises to trade or business or
250 hour by owners, contractors, employees or agents
Keep full logs and record and a statement with tax return is submitted about relying on safe harbor rule.

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If business is not specified service business (SSTB), what happens if AGI is above threshold

50% of W-2 or if greater
25% of W-2 + 2.5% of UBIA
Unadjusted Basis Immediately after Acquisition

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If business is not specified service business (SSTB), what happens if AGI is above threshold

50% of W-2 or if greater
25% of W-2 + 2.5% of UBIA
Unadjusted Basis Immediately after Acquisition

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Can MFS get you an advantage for QBI

Yes sometimes when you file MFS, you may stay under the AGI threshold and get QBI deduction

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Can MFS get you an advantage for QBI

Yes sometimes when you file MFS, you may stay under the AGI threshold and get QBI deduction

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What is SSTB De Minimus Rule 1st rule

If your gross receipts are less than 25 million and less than 10% are from SSTB, you can qualify for QBI deduction

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What is SSTB De Minimus Rule 2nd rule

If gross receipts are more than 25 million and less than 5% are from SSTB. The business is not SSTB and QBI deduction is allowed.

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If rental activity is reported on Scedule E instead of Scedule C, could it qualify for QBI deduction?

Yes if it is bona fide trade or business or qualify for 250 hours of safe harbor rule.

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On which form QBI deduction is claimed?

8995 for Simplified or
8995-A

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What happens with QBI losses

They carry forward and reduce future QBI deduction

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Which form is used for kiddy tax

Form 8814 for Parent return or
Form 8615 fir Kid’s return

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Which form is used for kiddy tax

Form 8814 for Parent return or
Form 8615 fir Kid’s return

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Who is exempt from Nanny Tax?

Taxpayer’s spouse, parents or child under 21

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Describe Nanny worker

A worker who control what work is done and how it is done qualify for Nanny worker. Nanny, housekeeper, private driver, private nurse, yard worker

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What if kids’ unearned income is 2500?

1250 tax free
1250 at kids marginal tax rate

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What is estate tax

It is death tax. It is imposed on the transfer of property after death.

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What is estate tax

It is death tax. It is imposed on the transfer of property after death.

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What is gift tax

It is imposed on transfer of property before the death if tranferor

What is gift tax

It is imposed on transfer of property before the death if tranferor

When dependent's estate is created

It is created after the death of dependent

When trust is created

Trust is created when taxpayer is alive

Which form is filed for fiduciary responsibilities

Form 56

What does executor do about tax liabilities

He determines the tax liabilities os estate before he distributes the assets to beneficiaries

Could the executor be responsible for estate liabilities

May be if he distributes the assets to beneficiaries before the taxes are paid. Only to the extent of tax debt up to the value of assets.

What form is filed for income upto the death of taxpayer

1040

What form is filed during the administration of the estate

1041

What form is used to report tax on taxable estate, when fair value of assets exceed applicable threshold

706. It is not a estate income tax return. It form to calculate estate taxes only.

What is the due date of 1041

15th day of Fourth month (usually April 15). Extension 7004 is filed upto September 30.

What is income threshold to file 1041 for an Estate

Gross income of 600 or any amount if beneficiaries are non-resident alien.

What is estate exclusion amount

12.92 million

What is estate exclusion amount

12.92 million

When form 706 is due

9 months after the death of taxpayer

How do you get the extension for filling 706

Form 4768

What is maximum tax rate of an estate

40%

How to claim portability of Deceased Spouse Unused Exclusion (DSUE)?

By filing 706 on timely manner regardless of value of the estate.

What is Gross Estate

It based on FMV of decadent's property.

Which form you use to calculate AMT

6251

Which form do you use to get AMT credit

8801

Do dividends from Alaska permanent fund cause kiddi tax

Yes

Does income from tax-exept bond cause kiddi tax

Does the taxpayer has to materially participate to claim the QBI

No, material participation is not required for QBI deduction

When must you attach form 1116 to claim foreign tax credit

Only if foreign tax paid is 300 or less, you don't file firm 1116. For MFJ, the amount is 600.

Which foreign taxes you can't deduct?

Foreign sales taxes Foreign property taxes Foreign real estate taxes

How many days you have to live outside of USA, if you don't have Foreign tax home, to get Foreign income exclusion

330 days

What do you use tax home for?

To determine travel expenses to sole proprietor and residency and if taxpayer qualify for foreign income exclusion.

Could taxpayer filing as MFS claim Foreign Income Exclusion?

Yes

Can you use interest for foreign income exclusion

No. Unearned income, including interest, dividends, capital gains, alimony, pension, annuities, and rental income, is not included in foreign income exclusion.

If taxpayer claims foreign income exclusion, would he pay income tax and employment tax on the income?

He'll pay only self-employment tax.

What is common between Roth IRA and traditional IRA

Non-rollover contributions are limited to an annual compensation limit or 100% of the compensation limit, whichever is less.

What filing threshold for partnership

No minimum threshold. No filing if no activity at all.

What filing threshold for sole proprietor

400

What filing threshold for estate

600

What filing threshold for trust

600

What filing threshold for c corp

No threshold

Who report IRD

IRD is not reported on final return. It is reported by who receive it.

What is IRD

Income earned by taxpayer but received after the death.it could be estate, surviving spouse or beneficiaries.

Is IRD is subject to tax withholding?

Generally not

Is IRD subject to federal tax withholding?

Generally not

Are IRD subject to FICA taxes withholding?

Yes

What is the early withdrawal penalty?

Withdrawal before age of 59 1/2, there is 10% penalty.

If you are a dependant, and student could you contribute to traditional IRA and claim Saver's Credit.

You can contribute to IRA but cannot claim saver's credit because you are a student.

Taxpayer received qualified disaster distribution from traditional IRA in 2022 and paid tax. In 2023 he paid back. What happens?

He can't deduct it in 2023 but would take it to 2022.

Taxpayer received qualified disaster distribution from traditional IRA in 2022 and paid tax. In 2023 he paid back. What happens?

He can't deduct it in 2023 but would take it to 2022. Form 8915-F

Are schools and colleges qualified charities?

Yes

Are scientific and literary institutions qualified charity?

Yes

Are organizations to prevent cruelty yo animals and human qualified charity?

Yes

Are special Olympics and little league baseball qualified charity?

Yes, development of youth and amateur sports are.

Who can make qualified charitable donation from RMD

70 1/2 can make upto 100,000 from RMD.

What type of income is notary fees

Find out

What type of tax you pay on Combat pay

Payroll tax

What type of Alaska permanent fund dividends

Other income

What type of income is jury duty pay

Other income

What is the minimum working hours threshold for educator expenses

900 hours

What is the minimum working hours threshold for educator expenses

900 hours

If a taxpayer is covered by a high deductible plan, but also has a supplemental insurance policy for a specific disease, then he is not eligible to contribute to an HSA. B. Individuals who are enrolled in Medicare can contribute to HSAs.

Not true

Which income doesn't count toward 4700

Scholarship, Tax-exmpt interest, SSI, non-raxable portion of social security, life insurance proceeds on death.

Tell me about Simplified home expenses rate and max square feets

$5/square feet. Max 300 square feet. $1,500.

Where and how you deduct DMV fee?

DMV fee is deducted on Scedule A as personal property tax itemized deduction. It is based on value of personal property.

What are form 1095-B and 1095-C

Find

For NIIT, what type of income is rent and Royalties

Investment income

What is a limit of IRA extra 1,000 contributions?

If tax payer is over 50.

What is the penalty of over contribution in IRA

When does distribution from IRA accounts be taxable

Distribution made before age of 59 1/2. The penalty will be 10%.

Would distribution made due to IRS levy from an IRA account cause any penalty?

Would distribution made from IRA account due to permanent disability would cause any penalty?

Would distribution made from IRA account due medical expenses in excess of 7.5% limit cause any penalty

Would exclusion of foreign income be included in calculation of social security benefits taxability.

You withdrew 10,000 from IRA account to pay for tuition. What are tax consequences?

You'll pay taxes but no 10% penalty.

Could buy S corporation share in self directed IRA

Which form do you report a non deductible traditional IRA amount?

8606

At what age you are required to make distribution from traditional IRA

73 years

Can a 21 years old student and dependant claimed by parents contribute to IRA

Yes

What form do you use for AMT

8801

What do you not include in AMT calculation

Self employment tax

Is filing threshold for bankruptcy estate is 600 or 400

It's 13850. Just like standard deduction

If decedent estate received the account receivable for services decedent rendered when he is alive, where do you report this income

1041 in this case since estate received it. It IRD is reported on the return who receives it. It can be a person or estate.