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REG > Individual Tax > Flashcards

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
Q

Savings Bond - Series EE

A

When redeemed it is taxable UNLESS you spend it on higher education - tuition an fees - not room and board

26
Q

Dividends - taxes

A

Yes taxable unless:

No - stock dividends and stock Splits, no dividends on S-Corp, Life insurance dividend, Liquidating dividends

27
Q

Taxes on Stock Options - Qualified and Unqualified

A

Nonqualified - taxable when exercised

Qualified - ISO - qualified for the benefit. Taxed when you SELL the stock

28
Q

Taxes on Injury awards

A

Physical - if blood its tax free

Nonphysical - age, race, etc. if this then TAX

29
Q

Social Security benefits - when is it taxable

A

If you are poor - not taxable

If you make over 60K then up to 85% taxable

30
Q

Pensions - when taxable

A

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
Q

What is you get a lump sum distribution of pension

A

Must roll-over within 60 days or they become taxable

32
Q

Foreign Earned Income Exclusion

A

This is if you are military etc and work uninterrupted period ( 1 year)can exclude up to $102K of income - not taxed

33
Q

Tax Refunds Fed

A

Federal - if get refund - NOT taxable

If Interest - taxable

34
Q

State Tax Refunds

A

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
Q

Inheritance - taxes

A

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
Q

Gifts - taxes

A

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
Q

Life Insurance - taxable

A

generally not table unless you receive it as an annuity - some is taxable

38
Q

Net Capital Loss rules

A

Can only take up to 3K per year but can carry forward indefinitely - until you die - then it goes away

39
Q

How much can I deduct of student loans each year - For AGI

A

$2500

40
Q

When can you deduct moving expenses - face

A
  • 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
Q

What makes a personal business subject to hobby loss

A

No profit in 3 of 5 years - can’t deduct

42
Q

How much is the passive Activity loss per year

A

Up to 25,000 on Schedule

phases out at 100K AGI. $.50 Phases out at 150K

43
Q

Coverdale Education Plan

A

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
Q

QTIP - 529 Plan

A

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
Q

How many years do you get for a charitable contribution

A

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
Q

What business Expenses are deductible

A

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
Q

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
A 
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
Q

deduct pool and elevator

A

maybe but between the amount that and how your house appreciates

49
Q

Can you deduct medical expenses for someone not you or your kids

A

Yes if qualify and meet the income or joint return tests are satisfied

50
Q

What about credit card payments

A

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
Q

What is you spouse dies

A

You can take them in the year paid - regardless of when they died before or after

52
Q

How much interest expense can you deduct on Schedule A

A

You can deduct up to the amount on Interest income on Schedule B - If there is more then it is carried forward.

53
Q

Mortgage loan interest

A

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
Q

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
A 
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
Q

phase - out

A

If you make too much money your itemized deduction phase out.

NOT GIMIC - these never phase out:
Gambling
Investment interest
Medical
Casualty Loss
56
Q

What level of income can you make and still be a qualified dependent

A
  • Cant make more that your personal exemption
57
Q

When can you be a qualified dependent and not be a relative

A

must be related or live with you for the entire year

58
Q

Qualifying child age requirements

A
  • under 19
  • or full time student under the age of 24
  • if disabled - no age limit

full time student = 5 months a year

59
Q

When can you be a qualified CHILD and residency rules and related rules

A

Related to you or live with you 1/2 of the year

60
Q

What kind of credit do you get with EIC

A

It is a refundable credit. get more with children

REG (31 decks)

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