Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Becker REG > R2 > Flashcards

R2 Flashcards

1
Q

Self Employment Items that are Adjustments and not deducted on Schedule C

A
  1. 1/2 self-employment FICA
  2. self-employed retirement
  3. self-employed health insurance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Adjustments

A
  • Educator expense
  • IRA contribution
  • Alimony paid
  • Interest foregone
  • Moving expenses
  • Student Loan Interest
  • Tuition & Fee deduction
  • 1/2 self-employed FICA
  • self-employed retirement
  • self-employed health insurance
  • Health Savings Account (HSA)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Educator Expenses

A

$250 single or $500 joint

*ordinary and necessary expenses up through grade 12

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Individual Retirement Account Types

A 
Traditional IRA
Nondeductible IRA
Roth IRA
Coverdell Education Savings Plan 
Additional Catch Up Contribution
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Traditional IRA

A
  • deduction is not allowed if both of the following are true
    1. income exceeds a certain limit (116,000 joint/70,000 single)
    2. already in a retirement plan

*if super rich, spouses are tested together (over 191,000)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Traditional IRA Deduction Amount

A

Lesser of:

  1. $5,500 ($11,000 joint)
  2. compensation
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Additional Catch-Up Contribution

A

$1,000 over the age of 50

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Roth IRA

A

no deduction for contribution
no tax when distributed
*limited to $5,500 of all retirement account investment (across all types)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Nondeductible IRA

A
  • limited to $5,500 or compensation
  • nondeductible in year of contribution
  • accumulates tax free
  • distribution is partially taxable and partially tax-free
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Coverdell Education Savings Account

A
  • Nondeductible contribution limited to $2,000 per year per beneficiary
  • tax-free accumulation
  • tax-free distribution if used for qualified education expenses (includes room and board) (up through high school or age 18)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Student Loan Interest Adjustment

A

$2,500

subject to phase out

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Tuition and Fees Deduction

A

$4,000 on qualified education expenses

subject to phase out

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

HSA

A

$3,300 (none once eligible for Medicare Parts A or B

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Moving Expenses

A
  • must be work related
  • distance between new work and old home and old work and old home increased by 50 miles
  • must stay in new location for 75% of the year (39 weeks)
  • costs include only: lodging on the way and moving cost for old home furnishings
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Tax on Self-Employment

A

50% can be used as an adjustment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Self-employed health insurance

A

100% can be used as an adjustment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Keogh (Profit Sharing) Plan

A
  • $52,000

* 20% of (net business income - 1/2 FICA)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Alimony Requirements

A
  1. must be made only in cash (or equivalent) (credit cards and tuition)
  2. must be a part of a formal divorce decree
  3. must end on the death of the payee spouse
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Alimony and Child Support

A

*payments first apply to child support

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Additional Deduction for over 65 and/or Blind

A

Single: $1,500 per person per condition
Married: $1,200 per person per condition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Itemized Deductions (in general)

A
  • phased out at a certain income level
  • not phased out for the following:
  • *G ambling Losses
  • *I nvestment interest expense
  • *M edical expenses
  • *C asualty and theft
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Medical Expenses

A

*Filing taxpayer, spouse, individual provided over 50% of support
*can pay to people who did not qualify to be a dependent due to either:
1. Gross income test
or
2. Filed a joint return

Timing = when paid or charged

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Medical Expenses that are Not Deductible

A
  • capital improvements up to amount they increase the FMV of the home
  • cosmetic surgery only
  • life insurance (investment tool)
  • health club insurance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Is life insurance a deductible medical expense?

A

No, an investment tool

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Medical Expense Limit

A

10% or 7.5% AGI if 65 or older

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Deductible Taxes

A

Real Estate Taxes (state, local, and foreign)
Personal Property Taxes (state, local)
Income taxes (state, local, and foreign)
**estimated payments, withheld, assessments paid for prior year’s tax
Sales tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Nondeductible Taxes

A

F ederal income tax
I nheritance taxes
B usiness taxes

28
Q

Interest Expense

A 
H ome mortage (1,000,000) & home equity (100,000)
I nvestment interest expense (up to amount of net investment income)
P ersonal (not deductible)
P repaid (pro rata in correct period)
E ducation (adjustement only)
29
Q

Can you deduct investment interest expense used to acquire tax-exempt interest income?

A

No

30
Q

Home Equity Indebtedness

A
  • proceeds can be used for anything

* up to $100,000

31
Q

Acquisition Indebtedness for Home Mortgage Interest

A
  • up to $1,000,000

* used to purchase, improve, construct PRINCIPLE and SECOND home

32
Q

Charitable Contributions for Individuals

A
  • limited to 50% AGI
  • General property: lesser of basis or FMV
  • limited to 30% AGI for LONG-TERM appreciated property
  • consideration such as donated time does not count as a deductible amount
  • may only deduct the excess contribution over consideration received
33
Q

Carryover period and method for charitable contributions for individuals

A

5 years; FIFO basis

34
Q

Casualty and Theft Losses for Individuals

A

Amount of Loss is lesser of:

  1. decrease in FV
  2. adjusted basis

*MUST BE SUDDEN and UNEXPECTED

  • limited to 10% AGI
  • $100 automatic decrease in loss
35
Q

Miscellaneous Itemized Deductions Subject to 2% Floor

A 
unreimbursed business expenses 
transportation expenses 
meals/entertainment expenses (50%)
educational expenses 
uniforms
business gifts
subscriptions to professional journals
tax preparation fee
hobbies (interest and taxes normally but can be more up to income if it is profitable)
36
Q

Other Miscellaneous Itemized Deductions NOT Subject to 2% Floor

A

*gambling losses (to extent of gambling winnings)

37
Q

Reduced tax rates for individuals are allowed for the following items

A
  • qualified dividends

* long-term capital gains

38
Q

Personal Tax Credits vs. Refundable Credits

A 
Personal = nondeductible
Refundable = refundable
39
Q

Individual Tax Credits

A 
foreign tax credit
credit for child and dependent care
education credits 
retirement savings contributions credit 
child tax credit
earned income credit 
residential energy credits
40
Q

Child and Dependent Care Credit

A 
*expenses up to 3,000 / 6,000 
Eligible People
*child under 13
*any disabled dependent
*disabled spouse 
20%-35% (20% = minimum)

Limited to lesser of

  1. income by poorest spouse
  2. limit of 3,000 or 6,000
    * multiplied by 20% for minimum amount
41
Q

Eligible Expenses for Child and Dependent Care Credit

A
  • daycare
  • nursery school
  • baby sitter
  • NOT grammar school
42
Q

Credit for Elderly and/or Permanently Disabled

A

**game show with two questions
15% and for people who are
1. over 65 and/or
2. permanently disabled

5000/7500

balance
x 15%

43
Q

Adoption Credit

A

Limit and phase out
Eligible expenses
*reasonable and necessary expenses, costs, and fees
NOT medical expenses

44
Q

Retirement Savings Contributions Credit Requirements

A
  • at least 18
  • not full time student
  • not a dependent
45
Q

Foreign Tax Credit

A

lesser of:

  1. foreign taxes paid
  2. foreign tax/global tax x US tax liability

Carryback: 1
Carryforward: 10

46
Q

General Business Credit

A

lesser of:

  1. 25% of regular tax liability above $25,000
  2. tentative minimum tax for the year

Tax
0-25000 –> 100% tax
25000+ –> 75% of tax

Carryback: 1
Carryforward: 20

47
Q

Child Tax Credit

A

CARES applies except:
17 years of age
US citizen, national, or resident

48
Q

Earned Income Credit

A

refundable

49
Q

Withholding Tax Credit

A

refundable if in excess

50
Q

Excess FICA Credit

A

refundable if in excess of limits

51
Q

Small Employer Pension Plan Start-Up Costs

A
  • under 100 employees & at least $5,000 income

* 50% of first $1,000

52
Q

Small Business Health Care Tax Credit

A

up to 35% of the employer’s costs of the plan premiums

53
Q

Health Coverage Tax Credit

A

80% of health care premiums for qualified health insurance

54
Q

Residential Energy Credits

A

15% of qualifying property or improvements

$500 limit

55
Q

Should you pay AMT or regular tax?

A

pay the greater of the two

56
Q

Individual AMT Exemption Amounts

A

Begin with exemption (80,800 for joint)

AMTI

excess
x 25%

subtract that 25% from 80,800 for exclusion amount

57
Q

Individual AMT Adjustments

A 
P assive activity loss 
A ccelerated depreciation 
N et operating loss
I nstallement sales
C ontracts (% vs complete)
T axes 
I nterest (home mortgage okay)
M edical expenses
M iscellaneous expenses subject to 2% floor
E xemptions
58
Q

Individual AMT Preference Items

A

P rivate activity bond interest
P ercentage depletion
P re-1987 accumulated depreciation

59
Q

Individual AMT Credit Carryforward

A

forever and used for REGULAR TAXES ONLY

60
Q

Individual AMT Credits

A 
F oreign tax credit
A doption credit
C hild tax credit 
C ontribution to IRA credit
E earned income credit
61
Q

Statute of Limitations

A

General

  • 3 years from later of
    1. due date
    2. date return is filed

25% understatement

  • 6 years from later of
    1. due date
    2. date return is filed

Fraud/False Return
*forever

Refund Claim (1040x)
later of
1. three years from date return was filed or due date
2. two years from when the tax was paid

Bad Debts/Worthless Securities

  • 7 years from later of
    1. due date
    2. date return is filed
62
Q

Estimated Tax Payments for Individuals

A

Required if both conditions are met

  1. tax liability of over $1,000
  2. inadequate tax estimates lesser of
    1. 90% of current year
    2. 100% of prior year (110% if rich (over 150,000))
63
Q

State, Local, and Foreign Taxes

A

*deductible in the year paid; NOT the year it applies to

64
Q

American Opportunity Credit

A
  • first four years only

* 2,000 + 25% of next 2,000

65
Q

Lifetime Learning Credit

A
  • 20% of 10,000
  • any point during educational career
  • can’t be used for books
66
Q

Refundable Tax Credits

A
  1. child tax credit
  2. EIC
  3. withholding taxes (W-2)
  4. excess Social Security paid
  5. American Opportunity credit

Becker REG (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions