Itemized Deductions Flashcards
What is the deduction for someone over age 65 or blind
extra 1650 if old, extra 3300 if old n blind
Deduction for medical expenses rules
- for you, spouse or dependent who received more than 50% support from you
- is not subject to the income rule (they can make money)
What is included in medical expense deduction
- paid (cash or check) amounts during year
- amounts charged to credit card during year (regardless of when paid back)
- payments for deceased spouse
- amounts reimbursed to taxpayer must reduce allowable expense
To what extent are medical expenses deductible
to the extent that they exceed medical insurance reimbursement and 10% of taxpayer’s AGI are deductible
Deductible Medical Expenses formula
Qualified medical exps - insurance reimbursement = qualified medical exps paid - 10% AGI =Deductible medical exps
Itemized deductions for state and local income taxes, state n local prop taxes, n sales tax are limited to..
10k in aggregate
real estate taxes do not include street, sewer, and sidewalk assessment taxes.. those are
special assessments
What are personal property taxes and are they deductible
paid to state n local governments on personal property owned like vehicles n boats
to be deductible, tax must b based on the value of the personal property n paid during the year
Rules for income taxes (state, local n foreign taxes)
- estimated taxes paid during the year are deductible
- taxes withheld from paycheck is deductible
- assessments for a prior years tax that are paid in current year are deductible
- refunds are included in gross income (if the tax was deducted in a prior year) and should not be netted against the current year itemized tax deduction
can someone deduct sales tax?
have to choose between deducting either state n loval income tax OR state n local sales tax, not both
What are the nondeductible taxes
FIB
- Federal taxes (including social security)
- inheritance taxes for states
- Business (on sched C) and rental property taxes (on sched E)
Investment interest expense deduction is limited to
net taxable investment income (like gambling loss rule)
What is included as investment (taxable) income
- interest
- dividends (other than qualified dividends)
- short term capital gains
- royalties (in excess of exps)
- net long term capital gains and qualified dividends
What is the rule for the excess of investment interest paid over the allowed investment interest deducted
carried forward indeffinately
Is personal consumer interest deductible?
no
