R1, May Your Soul Rest Easy Flashcards
What is the basic Tax Formula?
Gross Income LESS: adjustments =AGI LESS: Std Deduction OR Itemized Deduction =Taxable Income before QBI LESS: QBI Deduction =Taxable Income x Federal Rate =Federal Income Tax LESS Tax credits ADD: Other Taxes LESS: Payments =Tax due/refund
What is the riteria for claiming head of household
Not married, legally seperated, or is married and has lived apart from spouse for the last six months of the year..
Not a qualifying widower
Maintain a home, that for over half the tax year is the principle residence of a: Dependent child, Dependent relative, dependent mother/father (this one is regrdless of if they live with the person, think nursing home)
What are the qualifications to file as a widower
Unmarried at the end of the tax year.
AND
Surviving spouse must maintain a household which for the whole year, was the main house for a dependent son/daughter/step S/D
ANDDDD
This qualification is good for two years after the spouses death.
What are the requirements for a qualifying child
CARES
Close Realtive Age Limit (19 or 24 and under in college) Residency and filing requirement Eliminate gross income test Support Test (over half)
What are the requirements for a qualifying relative
SUPORT
Support (>50%) Test
Under specific amount of gross income (<4200)
Precludes dependent filing a joint tax return test
Only Citizens
Relatives Test OR
Taxpayer lives with individual for whole year test (if non-relative)
Name requirements for a multiple support agreement
Two+ people together provide more than 50% of support, but individually, nobody provides more than 50%
To claim as a dependent, a person must provide more than 10% support as well as other dependency tests
File a 2120 form
When does a cash basis tax payer report income
in the year it is either actually or constructively received…can be either in cash or property (Cash and cash equivalents)
What are the 4 types of income for a person
COPP
Capital
Ordinary (Wages)
Passive (real estate, limited partnership, S Corp)
Portfolio (Dividends or interest)
Gimme examples of non tax fringe benefits
De minimis
Tuition reduction
Employee Discount
Employer paid accident, medical, or health insurance
lemme ask you…are life insurance premiums taxable to employees
WELP yes and no…the first 50,000 of group term is not includable in gross income…BUT anything over 50k should be included
So uhhhh gimme examples of exempt interest
State/local bonds
Bonds of a US possession (puerto rico)
Series EE if used for higher ed
Interest on Veterans shiz
What is the deal with taxes on property settlements from a divorce
transferring spouse gets no deduction for payments made or property transferred, and the payments aint includable in gross income for spouse receiving shit…this is the case no matter what time period
The fuck you gotta do to deduct alimony and so the other person can make it includable
PRE 12/31/2018 CAN RECOG AS INCOME/DEDUCT AND TO BE ALIMONY IT:
written decree of payments
Must be in cash or cash equiv.
Payment cant extend beyond death of recipient
Cant pay member of same household
No joint returns
AYOOOO
Before any alimony is paid/recognized…child support gets priority…think of it as the primary bucket that must be fillled up)
When are the funds in a nondeductible traditional IRA taxable
withdrawls are partially taxable
When withdrawn, the principal payments arent taxed, but the earned interest (the gain)…is
Allocated on pro rata basis to determine amount
How the F you find the excludable part of a annuity
Investment in contract / Age Factor ( in months)
If that MF lives longer tahn the factor in months, further payments are fully taxed…if they die before full payments collected, the uncollected shit is a misc. itemized deduction on that dead persons last return.
In a premature distribution of an IRA, what are the exceptions to the penalty tax
HIM DEAD
Home buyer (first time, 10,000 max within 120 days)
Insurance (medical) unemployed with 12 consecutive weeks of unemployment comp. or self employment
Medical expenses in excess of 10% AGI
Disability
Education
And
Death
How the hell do you determine social security benefits
its broken out by AGI plus tax exempt interest plus 50% SS benefits…
Low income (<25,000 S , 32,000 MFJ) means no SS benefits are taxed
Lower Middle Income means less than 50% of SS is taxed
Middle Income (OVER 25000 S, 32000 MFJ) 50% of SS is taxed
Upper Middle Income means between 50% and 85% of SS is taxed
Upper income (Over 34,000 S, $44,000 MFJ) means 85% of SS benefits are taxed
Are scholarships and fellowships gross income
if degree seeking, they are excludable up to the amount spent on tuition, fees, books and supplies. All reamining amounts are includable in grosss income.
If non degree seeking all amounts are includbale in income.
Qual es the tests for foreign earned income exclusion
Bona Fide resident (whole tax year)
Physcial presence (330 full days out of 12 consecutive months)
Gimme some them nontaxable misc. income items (exclusions)
life insurance proceeds Gifts/inheritence Medicare benefits workers comp personal injury/illness award Accident insurance foreign earned income exclusion
The heck is the self employment tax
all net SE income is subject to 2.9% medicare, but only SE income up to 132,900 is subject to 12.4% SS tax
What does the uniform capitalization rules apply to
real or tanigble personal prop produced by the taxpayer in the trade or business
Real or tangible personal prop produced by tax payer for consumer (inventory of manufacturer)
Real or tangible personal property purchased by the tax payer for resale (retail inventory) but only if gross receipts are over 25 million annually oer the past 3 years
How is rental income from a vacation jaunt handled
if rented less than 15 days, its a personal jaunt
If rented more than 15 days and personal use is the greater of 14 days or 10% of days rented, allocste rental expenses to the extent of rental income
If rented 15 or more days, and personal use is not more than 14 days or 10% of days rented: its a rental prop.
So for rentals, if its considered personal prop, what is going on compared to if its a rental talkin bout deductions and income
if its a personal, income is excluded and deuctions for mortgage interest and taxes are put on Schedule. A and other expenses aint deductible…
If its a vacation property/rental the taxpayer reports income and deductions on Sched. E