Numbers/Rates Memorization Flashcards
Charges or misconduct reported to CFP Board
30 days
May appeal DEC ruling
Within 30 days
PITI %
28% of gross income
Monthly debt %
36% of gross income
Kiddie tax unearned standard deduction
$1,150 standard deduction
$1,150 at kids rate 10%
Excess unearned income at parent’s rate
Kiddie tax earned income
Greater of $1,150
or earned income +$400
Primary residence home sale gain exclusion
$500k married
$250k single
18 months COBRA
Voluntary/involuntary termination
Full to part time transition
Employees dependents
36 months COBRA
Death, Divorce, Separation, eligible for Medicare, spouse+ dependents
Loss of dependent status, dependents with status change
Disability covers x% of earned income
50%- 60%
Unemployment benefits duration
Up to 26 weeks
13 week extension in high unemployment periods
Disability qualifying event
29 months
Expected to last not less than 12 months
Most disability policy elimination periods
90 days
Inform simultaneous death act
Deaths within 120 hours = predeceased
Health FSA contribution limit
$2,850 annually
Dependent care FSA reimbursement max
$5,000 per year
Accredited investor
$1mm net worth
$200k annual single income
$300k annual married income
Frivolous return penalty
$5,000
Negligence tax underpayment penalty
20% of underpayment
Tax fraud penalty
75% of underpayment
Failure to pay taxes penalty
0.5% per month, max 25%
Failure to file taxes penalty
5% per month, max of 25%
Avoid penalty on tax underpayment, pay ->
90% of current year tax liability
100% of prior year or
110% of prior year of MAGI $150k+
Self employment tax
14.13%
1/2 deductible
Insurance premiums paid in group coverage tax-free up to
$50k of coverage
Tax-free benefit for dependent care
$5,000
Tax-free employer educational assistance
$5,250
Tax free employer assisted adoption benefits
$10k
Tax- free employer subsidized parking
$280 / month
Tax-free discount to employees on company products
20% discount on selling price to customers
State and local tax
Personal property tax
Real estate tax
Limited deduction
$10k combined
These 3 itemized deductions are limited to $10k combined
State and local sales tax
Personal property tax
Real estate tax
Mortgage interest deductible (on mortgage base balance)
$750k married
$375k single
Improvements only
Medicate tax
2.35% on wages over $200k
1.45% on wages up to $200k
Credit for child care expense limit
$3k (1 child)
$6k total (2+ childs)
At 20% of expenses
$600
$1,200
Child tax credit
MAGI reduction
$2k per child
Reduced by $50 for every $1k above $400k MAGI
Up to $1,400 per child is refundable tax credit
Retirement savings contribution credit
$2k single / $4k MFJ
Max adoption credit
$14,890 per eligible child
Dividend received deduction
US Corp investing in other US Corp
Own 20% or less, exclude 50% divy
Own 20-80%, exclude 65% divy
Own 80%+, exclude dividend 100%
Accumulated earnings tax
20%
$250k can be accumulated for business need
Trust tax exemption
Required to distribute (complex) $300
Not required to distribute (complex) $100
MACRS Tables
MACRS
Y1, 5Yr 20% 7-year 14.29%
Y2, 5Yr 32%. 7-year 24.49%
Straight-line
Y1, 5Yr 10%. 7-year 7.14%
Y2, 5Yr 20%. 7-year 14.29%
Like kind exchange time constraints:
Identified w/i x date of transfer
Title received w/i x days of transfer
Identified 45 days
Title received 180 days
Deductible net loss from real estate
$25k/ year
Gift of appreciated LTCG Property to 59% organizations (charity)
If basis used, deduct up to 50% of AGI
If FMV used. deduct up to 30% of AGI
Social Security Fully Insured
40 Quarters of coverage
Currently insured = 6 quarters -> $255 lump sum death benefit
Section 415 Limit
Max Ann’l Qualified Limits
$61k or 100% of Salary
Only $305k if salary taken into account
Annual life annuity= lesser of $245k or 100% compensation(3 year average of highest salary years)
Elective deferral limit
$20,500 with $6,500 catch up after 50
Highly compensated employees (HCE)
Greater than 5% owner
Earning $135k in prior year
Key employee
Greater than 5% owner
Officer with $200k compensation
Greater than 1% owner and compensation more than $150k
Top heavy plan
60% of balances or balances to key employees
Salaries capped at $305k for calculation
ADP ACP Testing
HCE vs NHCE
HCE not more than 125% of NHCE (ADP is 8%+)
HCE not more than 200% of NHCE rate and not more than 2% greater than NHCE Rate (1-8%)
0-2% NHCE x2 = HCE
2-8% NHCE +2 = HCE
SIMPLE Contribution limit
$14,000 max aggregate
$3k age 50 catch up
Aggregate Limits Retirement Contribution Max
401(k), 403(b), SARSEP
$20,500
$6,500 catch up
Employer compensation deduction limit
Max of 25% if all aggregate eligible participant compensation
% of community property included in Gross Estate
1/2
Community property step-up?
100% step up IF 1/2 property includes in decedents gross estate
3-year rule within death
If made within 3 years of death (included in gross estate):
Gift tax paid out of pocket
Transfers of life insurance to the insured
Estate Tax Rate
40%
GSTT Rate
40%
Annual gift exclusion
$16k
Lifetime Exclusion
$12,060,000
Gift Tax Rate
40%
Rate on ALL 3 types of Transfer Tax
40%
Non spouse super annual gift tax exclusion
$164,000
Asset $ to qualify for Medicaid
< $2k in assets
Rule against perpetuities
Must vest no later than 21 years and 9 months after youngest Bene lives (from when trust was created)
Medical expense deduction max
7.5% of AGI FLOOR
Includes medical insurance premiums
Margin interest expense deductible up to
Investment income:
Interest
Ordinary dividends
STCG
HALE (Health) Corps Taxation
PSCs taxed at 21%
Accumulated earnings > $150k taxed at 20% accumulated earnings tax
Corporate Tax Rate
21%
Section 179 expense election available for 1245 property
Limited to Corporation’s taxable income (current max $1mm)
Deduction for active participation in real estate (plus phase out)
Deduct up to $25k per year
< $100k AGI
Cost recovery deductions that can be taken in year 1 (%)
10%
SS included in Gross Income
MAGI > $25k 50% included
MAGI > $34k. 85% included
Money purchase permitted disparity
70%
SEP Contribution limits
15% & 25%
15% = 12.12% of net income
25% = 18.59% of net income
Retirement early withdrawal penalty
10% penalty
25% if taken within 2 years of first participation
Simple IRA Special Election (Employer)?
Also give match % (baseline)
100% match of first 3%
Election:
1% match in no more than 2 years in any 5 year period
UBTI subject to tax
LP income in excess of $1k -> UTBI tax
ISO vs NSO
One year:
First $100k are ISOs
Excess over $100k are NSOs
15% PSP Shortcut
$Profit x 0.1212 or 12.12%
Charitable contribution tax deduction (insurance policy)
Lesser of Cash Value or Basis
Limited to 50% of AGI
Max Gift in any one year without causing gift tax
$12,076,000
Annual $16k plus lifetime $12,060,000
Business property coinsurance
90%
