SU 5- Deductions from AGI, Credits, AMT, limitations Flashcards
Adjustments to GI
educator exp HSA deduction moving exp deductible part of self-employment tax SEP, SIMPLE self-employed heath insurance deduction penalty on early withdrawal of savings alimony pd IRA deduction student loan interest tuition/fees DPAD jury duty repmt
Itemized deduction
medical/dental taxes pd interest pd charity casualty/theft job exp misc deductions unreimbursed employee exp tax pre other exp (investment fees, etc.)
Standard deduction not allowed for
those who itemize nonresident alien short pd return married indiv who files separately and spouse itemizes pships, estates, trusts
std deduction for QC
greater of 1050 or earned income + 350 up to std deduction
earned income doesn’t include dividends or cap G
Qualified Residence Interest
deduct if
qualified residence
principal residence of TP & 1 other residence
acquisition- acquire, construct, improve qualified residence
home equity-debt secured by qualified residence to extent
Personal interest exp
can’t deduct
Charitable contributions
public charity- > 1/3 support from member & general public
indiv carry fwd excess contribution for 5 years
clothing- must be good/better condition
-exception- less than good condition worth at least $500 (deduct w/ qualified appraisal)
qualified appraisal for real property req for return if value > 5k
Charitable contribution property
capital G- LTCG would be rec if sold on date on contribution
OI property is property on which income or STCG
50% limit organization
church educational org hospital (medical research) org operated to receive, hold, invest, administer property for state & muni colleges private operating foundations
non 50% limit org
other private org
not 50% org
50% limit org
cash-donation=amtn limit= 50%AGI
cap G prop- donation=FMV limit=30%AGI
tangible personal prop, elect to reduce to AB, OI property-donation=lower FMV or AB limit= 50%AGI
svc-donation=unreimbursed exp, limit= 50% AGI
non 50% limit org (private)
cash- limit 30%AGI
cap G property- donation=lower of FMV or AB, limit=lesser or 20% AGI or excess of 30% over contribution to public charities
OI property- lower FMV or AB, limit=30% AGI
svcs-unreimbursed exp, limit 30% AGI
casualty loss
deduct nonbusiness property from theft, fire, casualty
loss = lesser of decline in FMV or AB minus insurance reimbursements
Other miscellaneous itemized deduction (2% limit)
amortizable premium on taxable bonds
casualty/theft
federal estate tax on income in respect of decedent
gambling losses up to gambling winnings
impairment related work exp of persons w/ disabilities
repayments of > 3k under claim of right
unrecovered investment in pension
Itemized deduction subject to 2% AGI exclusion
hobby exp
unreimburesed employee exp
tax prep fees
investment exp
Employee expenditures subject to 2% AGI exclusion
home office union dues pro dues/memberships uniforms job seeking exp entertainment subscriptions to business journal travel exp outside salesperson exp education exp
foreign tax credit
US income tax * foreign source taxable income/worldwide taxable income
nonrefundable personal credit
FTC child/dependent care lifetime learning retirement savings contribution child tax credit for elderly/disabled GBC Adoption
Child/Dependent Care Credit
incur to enable TP to be employed or TP provides 1/2 cost of household for dependent 15k
Lifetime Learning Credit
20% of tuition pd by TP
max = 2k (20% of 10k of exp)
phaseout-AGI=55-65k (110-130 MFJ)
Retirement Savings Contribution
AGI limit is 30,500 (61k MFJ, 45,750HH)
max = 1000 (50% of 2k)
Child Tax Credit
1k per child
Elderly/Disabled Credit
15% * initial base amount -5k for single -7500 for MFJ (both 65 & older) initial base reduced by SSB, pension/annuity excluded from GI, disability income if under 65, 1/2 of excess of AGI over -7500 single -10k MFJ
GBC
credit for investment, research, work opp, welfare-to work, low income housing,
GBC=Net income tax minus greater of tentative minimum tax or 25% of net regular tax over 25k
WOTC
credit= 40% (25% for employment > 120 hours but less than 400) of 1st 6k paid to employees work at lest 400 hours
10k for LT family assistance recipient
3k for qualified summer youth employees
max credit= 2400 (40% of 6k), 4k for LT family, 1200 qualified summer youth
2nd year credit- 50% of 1st 10k
max for both years is 9k (4k+5k)
adoption credit
13,400 per QC
no phaseout
carryfwd 5 years
Refundable credit
taxes withheld
EIC
adtl child tax credit
AOC
EIC
valid SSN earned income can't use MFS US citizen, resident alien, or NRA can't by QC of another 6 month
Additional Child Tax Credit
credit available for TP who get 3k or unclaimed portion of nonrefundable credit
-cap at per child credit amnt
AOC
max credit 2500 per student per year for 1st 4 years of college
100% of 1st 2k, 25% of 2nd 2k
phaseout= AGI=80-90k (160-180k MFJ)
reduction= credit allowed *(AGI-80 or 160)/(10 or 20)
40% refundable
AMTI
TI + tax pref + personal exemption + std deduction if not itemized +/- adjustment
AMT base
AMTI-exemption amnt
exemption amnt
-MFJ=83400 25% phaseout for exess> 158900
-single=53600 25% phaseout for excess > 119200
Tentative minimum tax
AMT base * rate
rate= 26% for 1st 185400
rate= 28% for exess over 185400
AMT
TMT- regular income tax
tax preference
favorable treatment for IT
- tax exempt interst
- excess depletion
- intangible
- drilling cost
- small business tock exclusion (purch before 9.28.10, after 12.31.15)
AMT adjustment
timing diff
not allowed-misc itemized, state/local/foreign IT, real/personal property tax, std deduction, personal exemption
medical exp= 10%AGI for 65 or over
150%
