M1 Adjustments Flashcards
Adjustment are referred to as _____
“Above-the-line” - above the line deductions to arrive at AGI
Educator Expenses. Eligible educators can deduct up to ___ of qualified expenses paid.
$250 (each for a total of $500 for couples filing jointly)
-Eligible educators include teachers Kindergarten - 12th grade (900 hours during a school year)
What are the four types of retirement accounts?
1) Deductible IRA
2) Nondeductible IRA
3) ROTH IRA
4) Coverdell education savings account
Deductible IRA. Two conditions when an IRA contribution is not deductible?
1) Excessive AGI “Rich”
2) Active participation in another qualified plan
Deductible IRA. Husband and wife tested separately for two conditions UNLESS
“SUPER RICH” (in 2017, this amount was 186,000-196,000
Deductible IRA. Contribution amount
up to $5,500 (each if filing joint)
Deductible IRA. What is the catch-up contribution amount?
1,000 (2017) if 50 years of age or older
Rollovers from Regular to ROTH IRAs are ___ in income but not ___
includable in income but there is NO penalty
What is the maximum contribution amount for coverdell account?
2,000 annually per beneficiary (if 4 grandkids, 8,000 total)
Which IRA option is NOT combined with other accounts?
Coverdell
What is the student loan interest deduction amount for 2017?
limited to 2,500
What is the tuition and fees deduction amount for 2017?
up to $4,000
Moving Expenses. WORK-RELATED - what is the mileage distance requirement in order to use the moving expense adjustment?
New workplace is 50 MILES farther from old house than old workplace was
Moving Expenses. Employee must work full-time in the new location for at least ___ weeks during the 12 month period immediately following the arrival.
39 weeks
Moving Expenses. Four items NOT deductible that the CPA exam consistently tests on?
- Meals
- Pre-move house hunting
- Expense of breaking a lease
- Temporary living expenses
- Employer reimbursements are excludable from income to the extent the amounts qualify as deductions (so net the two)
Which self-employment items are adjustments as opposed to being on the Sch C?
- Tax on Self-Employment (social security 50%)
- Self-employed health insurance (100% deductible) - family included
Keogh (Profit-Sharing Plans) - self-employed retirement plans. What is the maximum annual deductible amount (2017)?
LESSER of 54,000 OR 25% net earnings
Keogh Plans. Net earnings calculation.
Business income
Net business Income
<1/2 self employment tax>
Keogh net earnings
Keogh Plans. SHORT-CUT
Gross self-employment income amounts * 20%
Alimony cash or its equivalent (two examples of cash equivalent).
Credit card bills
College tuition bills
Another adjustment includes attorney fees paid in what types of cases?
Discrimination
