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Individual Tax Flashcards

1
Q

What are the tax dates for corporations, individuals and non profits

A

3/15 - S corp, PARTNERSHIPS 6 month extension
4/15 - individual, C-CORP - 5 month extension or 6 months if fiscal
5/15 - exempt orgs - 990

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2
Q

What is Schedule A

A

Itemized deductions:

COMMITT
Charitable Contributions
Other Misc.
Misc - 2%
Interest
Taxes
Theft and Casualty
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3
Q

What is Schedule B

A

Interest and dividend income

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4
Q

What is Schedule C

A

1099 I - profit and loss from a business

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5
Q

What is Schedule D

A

Capital Gains and losses

S/T and L/T investments

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6
Q

What is Schedule E

A

Supplementary Income or Loss

RRFCOP

Rent, Royalties, Flow through (1041)

Royalities -

Copyrights,
Oil/gas leases
Patents

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7
Q

What is Schedule F

A

Profit and Loss from farming

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8
Q

What is a constructive receipt

A

This means that if you get the check before year en d- it has been constructively received and therefore should be included in income in the year it was received

( shouldn’t wait to deposit it until January)

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9
Q

What is the tax benefit rule

A

If you deduct an item last year ($100) and then are reimbursed that money this year. (Get the $100). Then you must include the $100 in income this year.

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10
Q

When is a state refund deductible and when is it not

A

If you take the standard deduction - then the refund is NOT deductible

If itemize - then it is taxable

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11
Q

Can you deduct prepaid interest

A

No - you must amortize it over period in which it applies

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12
Q

Can you deduct you state taxes on your federal taxes return

A

Yes

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13
Q

What system, cash or accrual do you use if inventory are necessary to determine income

A

you must use the accrual method

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14
Q

What is you are an accrual payer and get rest or moralities in advance -

A

You must pay tax on them in the period they are received

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15
Q

Is unemployment included in gross income

A

yes - its a wage substitute

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16
Q

Is workers comp considered

A

no - this compensate you for damage or injury - not taxable income

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17
Q

How do you include in gross income payments in non monetary form

A

Yes - at FMV when received - this is the taxable amount

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18
Q

How and when are fringe benefits taxed

A
  • as long as NOT over 50K then no tax.
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19
Q

Life Insurance payments

A

payments are not deductible if you are the beneficiary - because when you get the insurance money - that amount will not be deductible

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20
Q

What about gambling winnings and losses

A

Winnings are included in taxable Income - Other Miscellaneous

Losses are on Schedule A - itemized deductions

  • Only deduct up to net loss of zero - no carry forward
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21
Q

What about prizes and awards - taxable?

A

Its taxable at FMV unless:

give it to charity without ever touching it -

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22
Q

Where do you include illegal drug money

A

Other income

And can deduct COGS

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23
Q

Scholarships - when taxable

A

If you earn it - its taxable

It is NOT taxable if:

You have not earned it - and $ spent on books and supplies

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24
Q

Taxes on Interest

A

Yes taxable on Schedule B

muni’s - Not taxable

ALL Federal - are taxable

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25
Savings Bond - Series EE
When redeemed it is taxable UNLESS you spend it on higher education - tuition an fees - not room and board
26
Dividends - taxes
Yes taxable unless: No - stock dividends and stock Splits, no dividends on S-Corp, Life insurance dividend, Liquidating dividends
27
Taxes on Stock Options - Qualified and Unqualified
Nonqualified - taxable when exercised Qualified - ISO - qualified for the benefit. Taxed when you SELL the stock
28
Taxes on Injury awards
Physical - if blood its tax free Nonphysical - age, race, etc. if this then TAX
29
Social Security benefits - when is it taxable
If you are poor - not taxable If you make over 60K then up to 85% taxable
30
Pensions - when taxable
If you put money in and I take the tax deduction TODAY - I will pay taxes later If i put in taxes today and DONT take a deduction today - - when I take the money out - NOT taxable
31
What is you get a lump sum distribution of pension
Must roll-over within 60 days or they become taxable
32
Foreign Earned Income Exclusion
This is if you are military etc and work uninterrupted period ( 1 year)can exclude up to $102K of income - not taxed
33
Tax Refunds Fed
Federal - if get refund - NOT taxable | If Interest - taxable
34
State Tax Refunds
If interest - YES If Refund AND you itemized - you can deduct the taxes you paid to the state on the 1040. Then your refund is TAXABLE - 1099G If you did not itemize last year - then refund this year is NOT taxable
35
Inheritance - taxes
the estate will pay the tax before they give the inheritance to the individual - so the individual does NOT pay tax on the inheritance they receive
36
Gifts - taxes
If I give you over the threshold allowed per year - then I give I file a gift tax return and it goes against my lifetime allowed The giver not the receiver pays the tax
37
Life Insurance - taxable
generally not table unless you receive it as an annuity - some is taxable
38
Net Capital Loss rules
Can only take up to 3K per year but can carry forward indefinitely - until you die - then it goes away
39
How much can I deduct of student loans each year - For AGI
$2500
40
When can you deduct moving expenses - face
- at least 50 miles farther from old home ``` - direct costs - hotels, gas, haul Not deductible: - no meals are deductible - no House hunting costs - no temporary housing ``` need to stay there 9 months
41
What makes a personal business subject to hobby loss
No profit in 3 of 5 years - can't deduct
42
How much is the passive Activity loss per year
Up to 25,000 on Schedule phases out at 100K AGI. $.50 Phases out at 150K
43
Coverdale Education Plan
I can put in up to $2,000 per year for someone else. This money is NOT deductible. They can then take out the money and use it tax free to pay for school - high school on up
44
QTIP - 529 Plan
Qualified Tuition Programs - I don't take a deduction and it grows tax free as long as it is used for education purposes. Can front load for 5 years and not considered a gift ( but can't give for the next 5 years) but can start growing
45
How many years do you get for a charitable contribution
Individuals: You are limited to 50% of AGI - the rest can be carried forward for 5 years Corporations - 10% of ATI and 5 years carry forward
46
What business Expenses are deductible
Business mileage ( work to client) CPE - to keep or maintain your current profession Not CPA review Laptop Uniforms - but not if can use in a different way tuxedo
47
Can you deduct: - medical services - medical devices - health insurance premiums - long term health care insurance premiums - medical and dental mileage - prescriptions - nonpresciption - costs for general health improvements - plastic surgery - lief insurance premiums - medicare portion of social security and self-employment taxes
``` YES - medical services YES-medical devices YES- health insurance premiums YES- long term health care insurance premiums YES- medical and dental mileage YES- prescriptions ``` ``` NO -non presciption NO-costs for general health improvements NO- plastic surgery NO- life insurance premiums NO- medicare portion of social security and self-employment taxes ```
48
deduct pool and elevator
maybe but between the amount that and how your house appreciates
49
Can you deduct medical expenses for someone not you or your kids
Yes if qualify and meet the income or joint return tests are satisfied
50
What about credit card payments
it is when the amount is charged to the card - not when you pay the card balance - this is when you can take the deduction
51
What is you spouse dies
You can take them in the year paid - regardless of when they died before or after
52
How much interest expense can you deduct on Schedule A
You can deduct up to the amount on Interest income on Schedule B - If there is more then it is carried forward.
53
Mortgage loan interest
Acquisition - Interest on the first million dollars is deductible. You can deduct the interest on your schedule A Home Equity - borrowed money and used it to buy a car. The interest is deductible up to 100K
54
Can you deduct these Taxes: - Personal property Tax - State and local taxes - Foreign tax - Fees - Fines - Federal - FICA - Taxes paid to state, local and foreign government on income or property tax
``` YES - Personal property Tax YES - State and local taxes YES - Foreign tax NO - Fees NO - Fines NO - Federal NO - FICA - YES Taxes paid to state, local and foreign government on income or property tax if itemize ```
55
phase - out
If you make too much money your itemized deduction phase out. ``` NOT GIMIC - these never phase out: Gambling Investment interest Medical Casualty Loss ```
56
What level of income can you make and still be a qualified dependent
- Cant make more that your personal exemption
57
When can you be a qualified dependent and not be a relative
must be related or live with you for the entire year
58
Qualifying child age requirements
- under 19 - or full time student under the age of 24 - if disabled - no age limit full time student = 5 months a year
59
When can you be a qualified CHILD and residency rules and related rules
Related to you or live with you 1/2 of the year
60
What kind of credit do you get with EIC
It is a refundable credit. get more with children

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