Itemizing

Question 1

What is the main purpose of itemizing deductions?

Answer 1

To reduce taxable income by deducting specific eligible expenses.

Question 2

True or False: You must itemize deductions if your total deductions exceed the standard deduction.

Answer 2

False. You can choose to itemize or take the standard deduction, whichever is more beneficial.

Question 3

Fill in the blank: Itemized deductions are reported on Schedule ___ of Form 1040.

Answer 3

A

Question 4

What is the standard deduction for a single filer in 2024

Answer 4

$14,600

Question 5

Name one common category of itemized deductions.

Answer 5

Medical expenses, state and local taxes, mortgage interest, charitable contributions.

Question 6

True or False: Medical expenses can only be deducted if they exceed 7.5% of your adjusted gross income (AGI).

Answer 6

True

Question 7

What limit applies to state and local tax deductions?

Answer 7

$10,000 limit for state and local taxes combined.

Question 8

What is the maximum deductible amount for charitable contributions?

Answer 8

Up to 60% of AGI for cash contributions to qualifying charities.

Question 9

Multiple Choice: Which of the following is NOT an itemized deduction? A) Mortgage interest B) Health insurance premiums C) Standard deduction

Answer 9

C) Standard deduction

Question 10

True or False: You can deduct personal property taxes as an itemized deduction.

Answer 10

True

Question 11

When itemizing,
what type of expenses can be deducted under the category of ‘other itemized deductions’?

Answer 11

Gambling losses, unreimbursed employee expenses, and certain legal fees.

Note: Gambling losses can only be deducted if the taxpayer is itemizing and only up to the amount they won.

Question 12

What is required to substantiate itemized deductions?

Answer 12

Proper documentation and receipts for each deduction claimed.

Question 13

True or False: You can itemize deductions even if you are married filing jointly.

Answer 13

True, but both spouses must itemize or both must take the standard deduction.

Question 14

What is the consequence of claiming itemized deductions incorrectly?

Answer 14

It may lead to an audit and possible penalties from the IRS.

Question 15

Multiple Choice: Which of the following expenses is fully deductible? A) Personal expenses B) Medical expenses C) Vacation costs

Answer 15

B) Medical expenses (to the extent they exceed the AGI threshold)

Question 16

What should you do if you have both itemized deductions and standard deductions?

Answer 16

Calculate both to determine which provides the greater tax benefit.

Question 17

Fill in the blank: You must keep records of your itemized deductions for at least ___ years.

Answer 17

3

Question 18

True or False: You can carry forward excess charitable contributions to future tax years.

Answer 18

True

Question 19

What IRS form is used to claim itemized deductions?

Answer 19

Form 1040 Schedule A

Question 20

What is the impact of the Tax Cuts and Jobs Act on itemized deductions?

Answer 20

It increased the standard deduction and capped certain itemized deductions.
It eliminated tax prep services from the list of items to itemize.

Question 21

True or False: Home equity loan interest is fully deductible regardless of how the funds are used.

Answer 21

False. It is only deductible if used to buy, build, or substantially improve the home.

Question 22

What is the AGI threshold for deducting medical expenses for tax year 2023?

Answer 22

7.5% of AGI

Question 23

Fill in the blank: The deduction for state and local taxes (SALT) is limited to ___ per year.

Answer 23

$10,000

Question 24

True or False: You can deduct expenses for tax preparation as an itemized deduction.

Answer 24

FALSE for recent years.
It was true for tax years prior to 2018 but eliminated due to the Tax Cuts and Jobs Act.

Question 25

What is the primary benefit of itemizing deductions?

Answer 25

It can lead to a lower taxable income and potentially a higher tax refund.

Question 26

You and your spouse travel to another State for medical treatment. What expenes can be itemized?

Answer 26

Lodging- $50 per person/per day
The medical treatment that you are traveling for must not be an elective procedure or something that could have been done closer to home.

Travel Expenses- plane, trains, automobiles
If driving, uses standard milage rate OR you can use actual fuel, oil change and any repairs needed in the course of travel to or from medical destination.
Meals at the facilitiy

Question 27

Can you deduct Student Loan interest

Answer 27

Up to $2500

Not eligible if you are married filing separately