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REG > R2 Individual Tax - Adjs, Deducs, Credits > Flashcards

R2 Individual Tax - Adjs, Deducs, Credits Flashcards

1
Q

FOR AGI Deductions

A 
Educator Exps
IRA
Student Loan int exp
Tuition & Fee deduction
HSA
Moving Exps
1/2Se
SE health
Se retirement
Int withdrawal penalty
alimony paid
attorney fees- Discrim & Whistle
DPAD
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2
Q

Educator Exps

A

deduct up to 250S, 500MFJ

qualf exps are deducted. those ORDINARY & NECESSARY

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3
Q

IRA contributions - FOR AGI deduction

A 
4 IRAs and 1Keogh
Deductible
ROTH IRA
NoNdeductible
Coverdell - savings account
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4
Q

Deductible IRA

A

Earnings accum TAXFREE
DIstribs- taxable as ordinary income
Deduction - not allowed if RICH&ACTIVE

Rich- >58single, 68HH, 92-112MFJ
>92 first spouse phase out
>173 second spouse phase out
183 both phase out…no deduc

Amt of Deduc - LESSR of 5k or ppl’s COMPEN (not passive)

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5
Q

ROTH IRA

A 
Earnings Accum TAX FREE
Distribs TAX FREE
    1st return of capital - not taxed
    then distribs of earnings - taxable unless made 5yrs after first cont & other exceptions
NONdeductible

contrib limit, whatever is left of the 5k after cont to trad IRA.

Phase out
S 110-125
MFJ 173-183
MFS 0-10k

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6
Q

Rollovers Reg Tax to ROTH IRAs

A

no AGI limit affecting transfers
if previously deducted they need to be included now
can’t withdraw until in ROTH for 5 yrs

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7
Q

NONdeductible IRA

A

Accum Earnings TAXFREE
Distribs TAXABLE earnings not the principal
NONdeuctible

contrib limit
lesser of 5k or compensation

NO PHASE OUT

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8
Q

COVERDELL Educ Savings Acct (IRA type)

A

Accum Earnings TAXFREE
DIstribs TAXFREE if used to pay qualif educ exps
NONdeduc contribs - MAX CONT 2k

Time limitation
amts left when benef turns 30 must be distrib to someone else or to him.
to soemone else - tax free &no penalty
to him - taxable & 10% penalty

phase out
95-110k
190-220k

benef must be <18k. Max cont 2k per year

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9
Q

Student Loan Int Expense (FOR AGI)

A 
up to 2500
only if used for qualif exps
phase out
60-75S
125-155 MFJ
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10
Q

Tuition & Fees deduction

A 
max 4k
amt above max -> itemized 2%AGI 
cant use if you have AOC or LLC or a NONtax educ savings acct
phaseout
  2k 
>80 -> zero
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11
Q

HSA (FOR AGI)

A

mas cont 3k(6250 families)
pretax contributions
taxfree withdrawals

outofpocket limit 5950(11900 families)

ARCHER merdical -used if HSA unavailable
contrib limit 2100 single 4200 fam
max out of pocket 4200/7650 fam

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12
Q

Moving expenses (FOR AGI)

A

work related
includes cost of moving you and your stuff
lodgning but not meals

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13
Q

Keogh (profit sharing) plans

A

allowed for SE pppl
max deduc lesser of 50% or 25% net earnings after keogh
max addition
lesser of 50k or 100%net earnings

25%ofSEafterK=20%SEbeforeK

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14
Q

net earnings (keogh)

A

net earnings from SE - keogh cont- 1/2 SE tax

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15
Q

Standard Deductions (1040ez)

A

SIngle 5950
HH 8700
MFJ/widow 11900
MFS 5950

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16
Q

Addtl deduction

A

SINGLE 1450 or 2900
MFJ one person 1150 or 2300
MFJ both 2300 or 4600

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17
Q

standard deduction dependents

A

GREATER of 950 OR dep’s income +300

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18
Q

Itemized deductions

A 
Medical
Taxes
Interest
Charity
Casualty
Misc
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19
Q

Medical Exps (itemized)

A

pmts for you, spouse or deps
only excess over 7.5%AGI

reduced by insurance reimbursement

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20
Q

CAPEX medical

A

deduct diff bet cost of CAPEX and increase in FMV

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21
Q

State, Local, Foreign Taxes (itemized)

A

Real estate
Income taxes
Personal prop taxes
Sales taxes

choose to deduct either iincome taxes or sales taxes

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22
Q

NONdeductible taxes

A

FIB
Federal (inclSS)
Inheritance taxes
Business (sched C) & Rental Property taxes (Sched E)

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23
Q

Interest Expense (itemized) HIPPA

A

Home Mtge interest
acquisition indebtedness-1M max
Home equity - lesser 100k max or FMV-acq indebtedness outstanding

Investmente Interest Expense
deduc limited to net investment income

Personal interest is NOT deductible
Prepaid interest - deduv over period it relates to not full thing when paid. if rec’d then full thing taxable that year

Educational Loan interest - FOR agi dedu

24
Q

Charitable conts

A

cash = 50% AGi
FMV =30%AGI

excess carryF 5 years FIFO

LT prop @FMV
ST prop @basis

25
Q

Casualty and Theft (itemized)

A

100 dollar floor
only excess over 10%AGI
loss= lessser of decline in FMV OR basis

must be sudden and unexpected

26
Q

MIsc Itemized deducs (2%AGI)

A 
Unreimbursed Bus Exps- meals&enter 50%
Educ exps - must be work related and maintain or improve
uniforms
Bus gifts- 25 max
employment agency fees
exps of investors
Subcriptions to journals
tax prep fee
debit card fees for paying taxes
HOBBIES
27
Q

Hobbies

A

NO deduction except:

1) that stuff that would be deduc anyways (taxes&interest)
2) stuff that would be deduc if it was a business ONLY to extent of 1)

28
Q

Personal Tax Credits (NONref)

A 
Child & dependent care
Elderly & Permanently Disabled
Education -> LLC
Retimt Savings Cont
Foreign tax
General Business
29
Q

REFUNDABLE Credits

A 
Child tax credit (lmtd refund)
Earned Income Credit
Witholding Taxes (W2)
Excess SS paid
LT AMT Credit not used
   older than 3 yrs, can recoup GREATER of 5k or 20% of unused amt per yr
AOC (40%)
Adoption Credit
30
Q

Child&Dependent Care Credit (personal)

A

credit= LOWEST of lesser income, actual exps, max 3k/6k(2deps)
that X 20or35%
35% if AGI43k

kids ,13 or disabled dependent
if MFJ then both must work or one be fulltime student

31
Q

Elderly or Disabled Credit (personal)

A

15%of elig income
for ppl >65 or elig income is REDUCED by
SSpmts &50%AGIthat>7.5ksingle,10kMFJ,5kMFS

BASEAMT
(SSpmts Paid)
(50% excess over limit)
XXXX
X15%
credit
32
Q

Education Tax Incentives

AOC

A 
AOC
only first 4 years
boooks included
refundable 40%
max 2500 per STUDENT
100%first2k
25% next 2k

phase out
Magi >80k(160)
full phase out at 90k(180)

33
Q

Education Tax Incentives

LLC

A

for unlmtd years
books not allowed
2.5k max per year NOT student

phase out at >52k(104)
full phase out at 62k(124)

34
Q

Education Tax Incentives

Coverdell

A

can use with AOC or LLC but can’t use for same exps

exclude from GI any distribs

35
Q

Qualified Tuition Programs QTP

A

exempt from all taxation
buy credits or make contribs to account on behalf of beneficiary
includes books and room&board
distribs-> excluded from GI to extent it bought qualif exps

36
Q

Adoption Credit (refundable?)

A

12650 max per year
phase out 189710 to 229710
for all exps necessary to adopt
spouse’s children dont count
claim for years AFTER pmt made until adoption final
if foreign kids then cant claim until AFTER final

37
Q

Retirement Savings Cont (NON ref)(offset Regtax & AMT)

A

avail for conts to ROTH or Traditional
credit = (excess reg tax liab over amt - NONref credits)
max contrib 2k

38
Q

Foreign taxes Credit

A

can be itemized (no limit) or credit (limit)
Lesser of taxes paid OR (taxableincomeALLforeign/taxable income&exemptions) X UStax

back 1yr, Fwd 10yrs

39
Q

General Bus credit

A

low income housing
work opportunity credit
welfare to work
etc

back1yr, fwd20

40
Q

Work Opportunity Credit

A

for employers who hire ppl of a certain group

40% of first 6k

41
Q

Child Tax Credit (refundable)

A 
CARES rules apply but
<17 and US citizen
refundable to extent of
  lesser of excess credit over tax liab 
OR earned income -3k X15%

phase out- reduce 50 for each 1k over MAGI10kMFJ 75k single 55k MFS

42
Q

Earned Income Credit (refundable)

A
  • live in US >1/2 yr
  • meet low income thresholds
  • not have >spec amt of disqulif income(passive)
  • be 25-65 if no kids
  • file JT return - spouse cant be dep of another

child not req but they make credit higher
19/24 college rule & ur dependent

credit
7.65 of EarnedIncome -Singlenokids- 457max
34%EI-S1kid-3050 max
40%EI-S2kids-5368
45%EI-S&3kids-5666
43
Q

WItholding tax credit (refundable if >taxliab)

&Excess FICA…

A

2 or more employers - credit agains income

one employer - empyer refunds excess

44
Q

Small Bus Health care credit

A

up to 35% prems
back 1yr fwd20
35
at least 15-> 9%

45
Q

Health care coverage credit

A

for ppl who pay their own insurance

80% premis paid for you and ur family

46
Q

AMT Formula

A 
REg tax income
\+/- Adjustments
\+Preferences
AMTI
(exemption)
AMTbase
Xtax computation (26 or 28% (below or above175k)
TEntative min tax
(reg inc tax)
AMT
47
Q

Adjustments (AMT)

A 
PANICTIMME
PAL(passive losses)
Acc Depr(post 86)
NOL of person
Installment income of dealer
COntracts - %compl vs completion
Tax deducs - add back
Int deducs- on some home equity loans
Medical (10%AGI not 7.5)
Misc deducs not allowed (2% agi deducs)
exemptions (personal) std deduc add back
48
Q

+preferences (AMT)

A

PPP
*Private activity Bond int income
*comple - excess over adj basis
Pre87 Acc depr - excess over stline

*Permanent diffs

49
Q

AMT credit

A

carry fwd FOREVER

unles it arose bc of permanent diffs

50
Q

AMT Credits

A 
FACCE
Foreign tax credit
Adoption credit
Child tax credit
Conts to Retm Plans
Earned Income credit
51
Q

Statute of limitations GENERAL

A

3 yrs after later of
due date
file date

52
Q

Statute of limitations 25% understatement of Gi

A

6 yrs after later
due date
file date

53
Q

Fraud Statute of limitations

A

fraud will haunt u forever

54
Q

Refunds Statute of limitations

Bad debts, wthless Secs Statute of limitations

A

LATER OF
3 yrs after file date or due date
2 yrs after paid tax

7 yrs after due date or file date

55
Q

estimated tax withholdings formula

A

LESSER of
90%current year tax
100% last year tax (110% if AGI,150k)

56
Q

investment interest expense deduction

A

Lesser of
net inv income (inv income - stuff NOT ints)
Int exp

REG (8 decks)

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