Tax Brackets And Deductions Flashcards by David DeWitt

What is the standard deduction for single filers in 2025?

$15,000.

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What is the standard deduction for married couples filing jointly in 2025?

$30,000.

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What is the standard deduction for heads of household in 2025?

$22,500.

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How does age or blindness affect the standard deduction in 2025?

Adds $1,550 for each condition for joint filers; $1,950 for single/head of household.

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When might it be beneficial to itemize deductions instead of taking the standard deduction?

When total allowable itemized deductions exceed the standard deduction amount.

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What are the federal income tax rates for 2025?

10%, 12%, 22%, 24%, 32%, 35%, and 37%.

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What is the income range for the 10% tax bracket for single filers in 2025?

$0 to $11,925.

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What is the income range for the 37% tax bracket for married couples filing jointly in 2025?

Over $751,600.

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How does a marginal tax rate differ from an effective tax rate?

Marginal applies to your last dollar earned; effective is your average tax rate on total income.

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How does the progressive tax system work in the U.S.?

Income is taxed in tiers at different rates as it increases.

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At what income does the QBI deduction phase out for single filers in 2025?

$197,300.

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At what income does the Child Tax Credit phase out for married couples in 2025?

$400,000.

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What is the IRA deduction phaseout for single filers covered by a plan in 2025?

$73,000 to $83,000.

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What is the IRA deduction phaseout for married couples (covered spouse) in 2025?

$116,000 to $136,000.

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What is the IRA deduction phaseout for married couples (non-covered spouse) in 2025?

$218,000 to $228,000.

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What is the 0% long-term capital gains bracket for single filers in 2025?

Up to $48,350.

What is the 15% long-term capital gains bracket for married filing jointly in 2025?

$96,701 to $501,600.

How are qualified dividends taxed?

At the same rates as long-term capital gains.

How are ordinary dividends taxed?

At regular income tax rates.

What is the NIIT threshold for single filers?

$200,000.

What is the NIIT threshold for married filing jointly?

$250,000.

What is the AMT exemption for single filers in 2025?

$88,100.

When does the AMT exemption phase out for married couples in 2025?

Begins at $1,252,700.

What triggers the AMT?

High income combined with large deductions like SALT or incentive stock options.

How does AMT differ from regular tax?

AMT disallows certain deductions to ensure a minimum tax is paid.

Can AMT paid be credited in future years?

Yes, it can be used as a credit against regular tax in future years.

What is the maximum deduction for educator expenses in 2025?

$300 for individuals or $600 for married couples if both are educators.

What is the maximum SALT deduction under current law?

$10,000 for state and local taxes (SALT), including property and income taxes.

What is the medical expense deduction threshold for itemizing in 2025?

Medical expenses must exceed 7.5% of adjusted gross income (AGI) to be deductible.

How much of charitable contributions are deductible?

Up to 60% of AGI for cash donations to qualifying public charities.

Is mortgage interest deductible?

Yes, on mortgages up to $750,000 for loans taken out after December 15, 2017.

Are investment fees deductible?

No, miscellaneous itemized deductions, including investment fees, are no longer deductible under TCJA through 2025.

What is 'bunching deductions' in tax planning?

Combining multiple years’ worth of deductible expenses into one tax year to exceed the standard deduction.

When might it make sense to file married filing separately?

If one spouse has high medical expenses, or to avoid student loan income-based repayment penalties.

How can accelerating income help with taxes?

If you expect to be in a higher bracket next year, accelerating income can lock in lower rates now.

How can deferring income help with taxes?

Delaying income into a future year may reduce current taxable income and overall tax liability.

Can you deduct moving expenses in 2025?

Only for active-duty military members moving due to a military order.