Individual Tax- R1

Question 1

Summary of Individual Tax Formula

Answer 1

Gross income
- Adjustments
= AGI
- Standard Deduction OR Itemized deductions
= Taxable income b4 QBI deduction
- QBI Deduction
= Taxable Income

Federal Income Tax (regular or AMT)
- Tax credits
Other Taxes (SE Social security)
- Payments (witholding, etd taxes, exess ss)
= Tax Due OR Refund

Question 2

Is a state or local refund taxable if it was itemized in prior year?

Answer 2

yes

Question 3

Is a state or local refund taxable if the standard deduction was used in the prior year?

Answer 3

no

Question 4

Rental od Residence- rented fewer than 15 days

Answer 4

• treated as person residence
• rental income excluded from income
• mortgage interest n real estate taxes r allowed as itemized deductions

Question 5

Rental of residence- rented 15 or more days

Answer 5

• expenses must b prorated between personal n rental

- rental use expenses r only deductible to the extent of rental income, no loss allowed