Tax Planning - 14% - 24 of 170 questions

Question 1

Tax Planning Formula

Answer 1

Income - Exclusions
Gross Income - deductions for AGI
AGI - deductions from AGI
* greater of itemized or standard deduction
* QBID
Taxable Income - to the tables! tax rate
Gross Tax - tax credits
Final Tax Due - prepaments (withholdings and estimated payments)
Net tax payable or Refund due

Question 2

Form 1040

Answer 2

Individual Tax Return

Question 3

Form 1040x

Answer 3

Amended 1040

Question 4

Form 1040ES

Answer 4

Estimate Tax

Question 5

Form 1041

Answer 5

Estates & Trust

Question 6

Form W-2

Answer 6

Wages & taxes

Question 7

Schedule 1

Answer 7

Additional Income
&
Adjustments to Income

Question 8

Schedule A

Answer 8

Itemized Deductions

Question 9

Schedule B

Answer 9

Interest & Dividend Income

Question 10

Schedule C

Answer 10

Profit & Losses from Business

Question 11

Schedule D

Answer 11

Capital Gains/Losses

Question 12

Schedule E

Answer 12

Realty and Royalty
Income

Question 13

Schedule F

Answer 13

Profits/Losses from Farming

Question 14

Schedule H

Answer 14

Household Employment Taxes

Question 15

Form 706

Answer 15

Estate & GSTT
(generation skipping transfer tax)

Question 16

Form 709

Answer 16

Gift an GSTT
(generation skipping transfer tax)

Question 17

Form 1098

Answer 17

Mortgage & Interest statement

Question 18

Form 1099 DIV

Answer 18

Dividends and Distributions

Question 19

Form 1099 INT

Answer 19

Interet Income

Question 20

Form 1099 NEC

Answer 20

Non-EE compensation

Question 21

Form 1099 MISC

Answer 21

Misc Income

Question 22

Form 1099 R

Answer 22

Retirement Distribution

Question 23

Form 4868

Answer 23

Extension of time to File

Question 24

Form 5498

Answer 24

IRA contribution

Question 25

Form 8606

Answer 25

Non-deductible IRA contributions

Question 26

Exclusions (from Income = non-taxable)

Answer 26

M Municipal bond interest
A Accident and Health Plans: Employer Premiums
F Fringe Benefits
I Inheritances and Gifts
A Accident and Health Plans: Amount(s) Rec’d
S Scholarships

P Personal Residence Sale Gains (up to $250/500)
A Adoption Assistance
D Death Benefits
D Dependent Care Assistance Programs
E Education Assistance Program (up to $5,250)
D Debt Discharged (certain circumstances)

M Meals and Lodging for Employees
I Interest on Education Bonds (Series EE and Series I)
C Compensatory Damages Compensation
S Support Payments Received ( Child Support & Alimony post 2018)

Question 27

Adjustments to Income
(schedule 1, Part 2)

Answer 27

Above the line or Deductions for AGI
* HSA contributions with after-tax money (deadline to contribute is April 15)
* employer portion of SE tax
1. Net SE profits x 0.9235 = SE tax
2. SE tax x 50% = deductible
- additional 0.9% medicare tax not deductible
* SEP, SIMPLE, Qualified Plans for SE individuals
* SE health insurance premiums (only if no other coverage options are available)
* early withdrawal penalties of savings accounts (ie. CDs)
* alimony payments prior to 2019
* traditional IRA contributions
* student loan interest up to $2500 of interest paid on student loans
* educator expenses, $300 per individual, $600 max MFJ
* business expenses, govt officials who work on a fee basis, performing artists, members of military reservists traveling over 100 miles to perform reserve services

Question 28

IRA Phaseout Calculation

Answer 28

[(high phaseout - MAGI) / range] x max contribution (which is 7000 under 50)

portion of contribution that IS deductible

Question 29

Itemized Deductions
(Schedule A)

Answer 29

§ Unreimbursed Medical/Dental Expenses (of yourself, spouse, dependent child, dependent who makes less than $4,700 - exceeding 7.5% of AGI
□ LTC premiums (limits on $ amts by age)
□ premiums for Medicare Part B and D
□ weightless treatment program prescribed by doc
§ Taxes paid - SALT up to $10k
§ Interest Paid
□ mortgage interest paid on up to $750k for primary and secondary residence
□ Investment interest up to net investment income
□ can include interest paid on HELOC, buy, build, substantially improve assuming under $750k debt threshold
§ Gifts to Charity - cash donations up to 60% of AGI
□ private vs public = different max ded
§** Casualty and Theft Losses**
□ federally declared disaster losses
® lesser of FMV or Basis - the amount over $100 is ded
® total amount of all losses is above 10% of AGI threshold
§ other Itemized ded on Schedule A, line 16

Question 30

Tax credits

Answer 30

§ Refundable Credits
□ Earned Income Credit
□ Additional Child Tax Credit
□ AOTC
□ Premium Tax Credit - help cover premiums of health insurance purchased through Health Insurance Marketplace
§ Non-Refundable Credits
□ Child and Dependent Care Credit
□ Child Tax Credit
□ Retirement Savings Contribution Credit
□ Lifetime Learning Credit