Individual: Gross Income Flashcards
What are the income limitations on Social Security?
Generally not taxable.
Base: 32,000 MFJ, 25,000 others; 0 if MFS & does not live apart.
Tier 1: Lesser of: 50% of SS benefits or 50% of excess of mAGI over base
Adjusted base (2): 44,000 MFJ, 34,000 for others; 0 MFS & does not live apart
Tier 2: Lesser of 85% of benefits or 85% of excess of magi over adjusted base
Group term life insurance - What is required to be nondiscriminatory?
Not discriminatory if plan benefits 70% of all employees
Can exclude less than 3 years & part-time employees
Is interest income from federal government taxable?
State and Local?
Federal: Yes
State/Local: No
What is the treatment for State Tax Refund & Itemized Deduction? What is the Tax Benefit Rule?
Not taxable if not itemized.
If itemized, the excess of itemized over standard deduction is included in gross income
Are S-corp paid premiums taxable?
Yes, if more than 2% owned in an S-corp
Where are prizes & awards listed?
Other Income
Do bonuses for service use basis or FMV?
FMV
Are Non-Statutory Stock options included in income?
Yes, if traded on active market.
Shares purchased x (FMV - Price paid)
Does Net self-employment income include federal income taxes?
No
Is Home equity interest used for business deductible?
Yes, Fully Deductible for business expense - Schedule C
What Is non-residential MACRS treatment?
Straight Line - 39 years
Rental Property - what is the rental use test?
What is required to not include in income?
Use test: 14 days or 10% total rented days. Allocate utilities & maintenance
Not included when under 15 days
Limitations on Flexible Spending Account carryover
$500 carryover or grace period to March 15
Are contributions from an employer on behalf to unemployment insurance fund included in income?
No
What are the MISC 2% Itemized deductions?
SUITTES
S – Safe Deposit Box U – Union Dues I – Investment (Custodial Fees) T – Job Travel T – Tax Preparation Fees E – Job Education S –Subscriptions to professional journals
What are Deductions For AGI?
I Embraced Health Education Farm
"I”nterest on student loans ($2500) “E”mployment tax (50% self employment tax, 100% medical premiums) “M”oving expenses “B”usiness expenses “R”ent, royalty and flow-through entities “A”limony “C”ontributions to retirement “E”arly withdrawal penalty Jury”D”uty pay “E”ducation ($4000) “H”ealth savings account “F”arm income
What are the From AGI adjustments?
COMMITT
“C”haritable contributions “O”ther miscellaneous “M”iscellaneous expenses (2% AGI) “M”edical expenses “I”nterest “T”axes “T”heft or casualty
What is included in gross income? What is the mnemonic?
Wishing I Didn’t Steal A Baby Cat.
I Previously Raised Kittens Until Someone Owned
W) Wages I) Interest Income D) Dividends S) State and Local Refunds A) Alimony received B) Business income C) Capital gains/losses
I) IRA income P) Pension and annuity R) Rental income/loss K) K-1 income/loss U) Unemployment compensation S) Social Security benefits O) Other income
