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Passed Individual enrolled agent - Part 1 > Passed Individual taxes > Flashcards

Passed Individual taxes Flashcards

1
Q

Individual Income Tax Rates

A 
10%
15%
25%
28%
33%
35%
39.6%
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2
Q

Long-Term and Qualified Dividend Rates

A

0% rate for 10% - 15% income tax bracket
15% rate for 25% - 35% income tax bracket
20% rate for 39.6% bracket

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3
Q

Tax on 1250 un-recaptured gain

A

25%

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4
Q

Capital Gain on Collectibles

A

28%

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5
Q

Net Investment Tax

A

$200K single
$250 MFJ
$125 MFS
3.8% on passive income in excess of

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6
Q

Additional Medicare Tax

A

0.9% tax on wages or S.E. income in excess of $200K single
$250 MFJ
$125 MFS

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7
Q

2015 Standard Deductions

A

Single $6,300
MFS $6,300
HOH $9,250
MFJ $12,600

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8
Q

Dependent’s standard deduction

A

Greater of $1,050 or $350 plus earned income up to the ordinary standard deduction of $6,300

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9
Q

Aged or blind additional deduction

A

$1,250 each if MFJ / $1,550 each if single

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10
Q

Start of phase out for itemized deductions and exemptions

A 
MFS $154,950
Single $258,250
HOH $284,050
MFJ $309,900
Phase it is lesser of 3% in excess of the threshold or 80% of itemized deductions.
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11
Q

Savings bond exclusion for higher education expenses

Modified adjusted gross income phaseout

A

All except MFJ: $77,200–$92,200

MFJ: $115,750–$145,750;

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12
Q

American Opportunity Credit

Deduction

A

100% of first $2,000 of education expenses

25% of expenses between $2,000 and $4,000 (maximum credit $2,500)

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13
Q

Lifetime Learning Credit
Credit Amount
AGI phase out

A

20% of first $10,000 of qualified education expenses. Not refundable.
Other status phase out $55,000-$65,000
MFJ phase out $110,000-$160,000

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14
Q

Student Loans

A

Maximum interest deduction–$2,500
Modified adjusted gross income phaseout range–Married, joint, $130,000–$160,000; all other filing status, $65,000–$80,000

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15
Q

Qualified Fringe Benefit Exclusion for Transportation

A

Commuter highway vehicle and transit pass–$130

Qualified parking–$250

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16
Q

Earned Income Credit

Passive income limit and earned income requirement

A

Passive income must be less than $3,350

Earned income must be more than a dollar

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17
Q

AMT tax rates

A

26% on AMTI of $185,400 / $92,700 if MFS

28% of AMTI over this amount

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18
Q

AMT Exemptions

A

Joint $83,400
MFS $41,700
Single $53,600
Estates and Trusts $23,800

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19
Q

AMT Exemption Phase Out

A

25% of amount AMTI exceeds:
$158,900 for married, joint and surviving spouses
$119,200 single (and head of household)
$79,450 married, filing separate

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20
Q

IRA maximum contribution

A

$5,500 or $6,500 if older than 50

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21
Q

IRA AGI deduction phaseout start for those covered by pension plan

A

Single $61,000-$71,000
MFJ and QW $98,000-$118,000
MFS $0-$10,000

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22
Q

IRA AGI deduction phaseout start where only spouse covered by plan starts at

A

$183,000 - $193,000

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23
Q

Roth IRA phaseout

A

$183,000 start (MFJ, qualifying widow); $116,000 all others except MFS

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24
Q

SIMPLE plan, maximum elective deferral and catch-up

A

(Sec. 408(k)(2)(C)–$12,500; age 50 catch-up–$2,500

3% dollar matching for employees

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25
Q

SEP Maximum Contribution

A

25%; maximum dollar amount $53,000

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26
Q

Deferral limit for 403(b) plan, state plan, 401(k)

A

$18,000 or $6,000 age 50 catch up for 401(k) and 403(b)

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27
Q

Compensation limit under section 401

A

$265,000

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28
Q

Key Employee Top Heavy Plan

A

$170,000

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29
Q

Highly Compensated Employee

A

$120,000

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30
Q

Eligible employee for simplified employee pensions

A

21 years old
Worked for you at least 3 of the past 5 years
$600

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31
Q

401(K) Loan

A

Up to the lesser of 50% of value or $50,000
Not a taxable event unless the rules are violated
You need to repay all of the money that you borrow
Pay yourself interest at the market rate for somebody with your credit.

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32
Q

Child Tax Credit
Credit per child
MAGI limit

A

$1,000 per child; phaseout MAGI $110,000 joint, $75,000 single, $55,000 MFS; refundable $3,000 Sec. 24(d)(1)(B)(i)
Age 16 or younger

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33
Q

Cafeteria Plan

A

Max $2,550

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34
Q

Unearned Income of a Minor Child

A

$1,050 ($10,500 parent election)

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35
Q

Foreign earned income exclusion

A

$100,800

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36
Q

Per Diem amount for Periodic Payments Received under Long-Term Qualified Care Insurance Contracts

A

$330 per day

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37
Q

Employee Health Insurance Expense of Small Employers (Sec. 45R(d)(3)(B))
Maximum average wage and number of employees

A

Maximum average wage of $25,800 to qualify for the credit.
Maximum of 10 employees.
50% credit

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38
Q

Home Office Safe Harbor

A

$5.00 per square foot; maximum 300 sq.ft. or $1,500

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39
Q

No tax on social security income if total income less than

A

$25K S, QB, HOH

$32K MFJ

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40
Q

85% inclusion social security income threshold

A

more than $34,000–S, HOH, QW

more than $44,000–married filing joint

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41
Q

OASDI Wage Base

A

$118,500

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42
Q

Social Security

Retirement Savings Test

A

$15,720 (under full retirement age); $41,880 (year of full retirement age)

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43
Q

Maximum annual HSA contributions deductible

A

$3,350 for individual; $6,650 for family coverage
Catch-up contributions for individuals 55 or older (but less than 65) is $1,000.
High deductible plan
Can’t be enrolled in Medicare
Can’t be claimed as a dependent

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44
Q

High Deductible Plan Qualifications

A

Single annual deductible of $1,300 or family annual deductible of $2,600
Deductibles, co-pays, and other amounts except premiums can’t exceed $6,450 self or $12,900 family

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45
Q

Adoption credit with special needs or other adoptions

A

$13,400 credit is maxed even if you don’t pay for the exp

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46
Q

Adoption phase out of MAGI

A

$201,010 to $241,010

47
Q

Long Term Care (LTC) limitations on premiums

Deductions by age

A

40 or less $ 380
More than 40 but not more than 50 $710
More than 50 but not more than 60 $1,430
More than 60 but not more than 70 $3,800
More than 70 $4,750

48
Q

Form 8938 thresholds

A

$50,000 end of year or $75,000 at any point
$100,000 end of year or $150,000 at any point if married
If tax home is outside the U.S., multiply the threshold by 4

49
Q

presidentially declared disaster areas

A

Extension of time to file and pay

Does not apply to excise taxes, informational returns, or employment taxes

50
Q

Casualty Loss

A

Subtract $100 for each occurrence and reduce by 10% of AGI

Maximize at $20K MFJ or $10K MFS

51
Q

You must file a tax return if gross income exceeds … single, MFJ, MFS, HOH, QW

A 
2014 figures exemption plus stand deduction
MFS $3,950 (exemption only)
Single $10,150
HOH $13,050
QW $16,350
MFJ $20,300
*Add $1,200 if older than 65
52
Q

Dependents must file if …

A

Unearned income exceeds $1,000 or
Earned income exceeds $6,200
*Add $1,550 if older than 65 or blind

53
Q

Special cases when taxpayers must file

A 
AMT
Form 5329 penalty
Nanny Tax
Social security and medicare tips
Recapture first time homebuyer credit or other taxes
HSA or MSA distributions
S.E. earnings of $400
More than $108.28 of church wages that are except from FICA
Advance premium tax credits
54
Q

MFS can’t take these deductions

A 
Student Loan
Tuition and fees deduction
Educational Credits
Earned Income Credit
Coordinate standard or itemized deductions
55
Q

HOH Exception for months lived apart from spouse and misc exceptions

A

6 months apart from spouse
Or if you are married to a non-resident alien
Having a parent as a dependent will qualify a taxpayer for HOH

56
Q

Employer is not required to file a schedule H if paid less than this amount. Nanny is still required to claim the wages.

A

$1,900

Do not count amounts paid to home workers under 18 and are students. (per 1040 instructions)

57
Q

403(b) contribution limit

A

$20,500

58
Q

401(k) catch up

A

Age 50, $5,500 extra

59
Q

Statutory Employee

Types of jobs

A

Full-time life insurance
Agent or commission drivers
Traveling sales people
Homeworkers

60
Q

Qualified Dividends, days rule

A

61 days during a 121 day period that began 60 days before ex date

61
Q

Nontaxable Income

A 
Child Support
Life Insurance
Gifts
Hardest Hit Fund
Emergency Homeowners' Loan Program
Nontaxable Medicare waiver payments
62
Q

Educator Expense

A

$250/person
Grades K-12
Worked at least 900 hours/year

63
Q

Moving Expenses

A

But your new workplace must be at least 50 miles farther from your old home than your old home was from your old work- place. If you had no former workplace, your new workplace must be at least 50 miles from your old home.
39 Week test

64
Q

Deduct health insurance for dependents up to __ years old.

A

27 years old

65
Q

RMD age

A

70.5 years old

66
Q 
Retirement savings contributions credit (saver's credit)
Age
Status
Credit Amount
Phase Out
A

18 or older
Not a full time student and not a dependent
50% (Up to $36K AGI MFJ), 20% (Up to $39K MFJ), or 10% (Up to $60K MFJ) up to $2,000 per taxpayer
Single is half of MFJ AGI. HOH is half way between single and MFJ

67
Q

Legally Blind

A

Vision in the better eye is less than 20/200

Or less than 20 degree vision

68
Q

% for DPRG

A

9% of DPRG activities

69
Q

You don’t have to file form 1116 if …

A

All foreign source income is from 1099-INT, 1099-DIV, or K-1

Foreign taxes aren’t more than $300 single or $600 MFJ

70
Q

Dependent care expenses

A

Children under 13

Disabled spouse or other disabled person who could not care for themselves

71
Q

Form 2210 safe harbor

A

100% or 110% if PY tax was more than $150K

90% of the current year of 66% for farmers

72
Q

Excess parachute payment

A

Relates to change in control
20% excise tax paid by recipient
Company cant deduct payment as wages

73
Q

Time too file innocent spouse

A

2 Years

74
Q

Statute of limitations

A

3 years from the date the tax return was due or

2 years from the date that the tax was paid. Whichever is later.

75
Q

Failure to file penalty

A

5% per month up to 25%

Minimum penalty equal to the lesser of $135 or 100% of tax owed if 60 days late

76
Q

VITA

A 
Volunteer Income Tax Assistance
Help for those that...
Make $53,000 or less
Disabilities
Elderly
Limited English Speaking
77
Q

TCE

A

Tax Counseling for the elderly

Special help for those older than 60

78
Q

Frivolous Returns Penalty

A

$5,000 penalty

79
Q

Form 4868 if you are out of the country

A

File your extension and pay by June 15

80
Q

Form 4868 required payment

A

Pay 90% of your tax

81
Q

Late payment penalty

A

0.5% per month up to 25%

82
Q

Early Distribution

A

Before 59.5 years old

83
Q

Form 5329 exceptions

A
  1. Due to total and permanent disability
  2. Distributions due to death
  3. Qualified retirement plan distributions up to the amount you paid for unreimbursed medical expenses during the year minus 10% (or 7.5% if you or your spouse were born before January 2, 1950) of your adjusted gross income (AGI) for the year.
  4. Distribution made under a qualified domestic order.
  5. Health insurance premiums
  6. Higher Education
  7. Up to $10,000 for first time homebuyer
  8. IRS levy
  9. Distributions to reservists on leave for at least 180 days
84
Q

Vacation Rental

Greater of % of days or number of days

A

Considered using your dwelling as a personal residence if your use is greater than the greater of:
10% of rental days or
14 days

85
Q

Special rule for renting less than *** days

A

If you rent a residence for less than 15 days, don’t report any rental income or expenses.

86
Q

Gambling Income, line on 1040

A

Other income line 21

87
Q

Gambling Losses

A

Schedule A - Other misc deductions not subject to the 2% thresholds
Only deduct losses up to gambling income.

88
Q

Mortgage Debt Relief Act of 2007

A

Exclude cancellation of debt income for your personal residence.
2007 to 2014
Up to $2 mill of debt ($1 mill if MFS)
Exclude debt income if going through bankruptcy
Partially excludable if you are insolvent

89
Q

Cancellation of farming debts

A

Cancellation of debt is not included in income if more than half of your income for the past 3 years was from farming.

90
Q

Non-recourse cancellation of debt

A

Not taxable

91
Q

Mortgage Deduction

A

$1,000,000 of primary mortgage
$100,000 of 2nd mortgage. Total of primary and secondary must be less than FMV of home.
Half if MFS

92
Q

Combat Pay

A

Not Taxable

93
Q

Excess contribution penalty

A

6% annually

6% excise tax on Roth

94
Q

Reverse exchange parking period or like kind exchange must be completed by

A

Less than or equal to 180 days

95
Q

Like kind exchange identifying period

A

45 Days from the date of sale to identify the new property in writing.

96
Q

Elections for investment interest

A 
Qualified dividends (but reduce amounts taxed at a lower rate)
Capital Gains (Reduce amounts taxed at lower rates)
97
Q

Donations to foreign organizations

A

Not deductible

98
Q

1040NR deductions

A

State income taxes, charity, casualty loss, misc itemized deductions

99
Q

Non-residents can’t claim

A

standard deduction

100
Q

Credit for minimum tax. Your tax will be

A

The AMT tax even though it is less than the income tax

101
Q

Exceptions to NOL 2 year carryback

A

3 years back for casualty/theft or declared disaster zone
5 years back for farming
5 years for qualified disaster loss

102
Q

Time to amend and make NOL election

A

6 months

103
Q

Innocent spouse relief - 3 types

A
  1. Innocent Spouse Relief - Relief from additional tax if income or deductions were misreported.
  2. Separation of Liability Relief - Separation of taxes due.
  3. Equitable Relief - When you don’t qualify for the above two reliefs.
    * Must apply within two years after initial assessment was sent*
104
Q

Separation of liability relief. Meet one of 3 criteria

A
  1. Divorced or separated
  2. Widowed
  3. Not a member of the same household for 12 months prior to the request for relief.
105
Q

Common law

A

Dominant property system

Taxpayer and spouse are taxed separately

106
Q

Community property

A

Taxpayer and Spouse contribute labor
Profits and income are joint
Shared ownership of assets and liabilities

107
Q

Gift and estate exclusion

A

5.43 million

108
Q

Life insurance and estates

A

Who owns the policy when the taxpayer died?

Policy left to spouse isn’t taxable when taxpayer dies

109
Q

Gifts of life insurance policies within three years

A

Disallowed for federal and probably state purposes

110
Q

Maximum Earned Income Credit

A 
Children and Credit
None $503
One $3,359
Two $5,548
Three or more $6,242
111
Q

EIC AGI limits for single

A

Single: No children = $14,590
1 child = $38,511
2 children = $43,756
3 children = $46,997

112
Q

EIC AGI limits for MFJ

A

No children = $20,020
1 child = $43,941
2 children = $49,186
3 children = $52,247

113
Q

American Opportunity Phase Out

A

$80,000-$90,000 Single, OH, QW

$160,000-$180,000 MFJ

114
Q

Deductible Rental Loss

A

$25,000 for MFJ
$12,500 MFS
Phased out at $150K ($75K MFS)
Limited to half when income is $100K ($50K MFS)

Passed Individual enrolled agent - Part 1 (1 decks)

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