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
Rules for prepaid interest (differences)
prepaid interest paid must be allocated ocer the period of the loan-even for cash basis tax payer
-prepaid interest received is taxable as income in the yrear received and is not allocated
Is educational loan interest a adjustment or itemized deduction?
adjustment
Charitable contribution deduction maximum alloqable
cash= 60% of AGI
FMV property= 30% of AGI for gifts of longterm capital gain property to public charities (20% to nonop private foundation)
Charitable contribution deduction rules overall
overall limit = 60% AGI
- cash- may be all 60%
- geeral property- lesser of basis or FMV
- Appreciated longterm capital gain property- lessor of: 30% AGI n The remaining amout to reach 60% after cash contribution
if a taxpayer does not itemize deductions can they still deduction charity?
no. have to itemize
Can i deduct the services i provide for a charity?
no. only expenses to get there like driving or tolls etc.
If i take in a full time student to live in my home what can i deduct?
50 dollas per month the student lives there
If i donate weird shit like stamp collections or artifacts what is the deal
I have to get a written apraisal as substantiation for the value. same if i donate more than 5k for an one item
casualty n theft losses
if it exceeds 10% its deductible (has to be in federally declared disaster area)
amount of loss diff bw FMV before and after. loss cant exceed adjusted basis thats jsut weird
casulaty loss formula
Smaller loss - insurance recovery = my loss - $100 =eligable loss - 10% AGI = Deductible loss
