Unit 2 Flashcards

1
Q

Individual Income Tax Formula

A
Gross Income - Adj/Deductions
= AGI 
- Itemized/Standard - Qualified Business Income Deduction
= TAXABLE INCOME
x Tax Rate 
= GROSS TAX LIABILITY 
- Credits 
= NET TAX LIABILITY/REFUND
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Is Alimony Gross Income

A

Before 2019: GRI for reciepient and deducted by payor

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

Is Child Support GI

A

NOT GI for recipient , Not deductible by payor

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

Alimony Recapture Formula

A

2nd Yr Recapture = 2nd Yr Alimony - (15k+3rd Yr Alimony)

1st Yr Recapture = 1st Yr Alimony - [ 2nd yr alimony - 2nd yr recapture +3rd yr alimony/2) +15k]

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

IS Debt Discharge GI

A

CAn result in GI if for services performed.

NO GI if bankrupcy, farm, principle residence

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

SS Benefits GI?

A

Not taxable unless other income is received.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Taxable SS Benefits Forumula

A

1)AGI (excluding SS)
2) +Taxexempt interest/foreign income
3)= Modified AGI
4)+50% SS
5)= PI
6) - BA (32k, 25, 0k)
7) = Excess PI (<0, 0$)
8) - Incremental 9) Base Amount (12k, 9k or 0k)
= Excess PI

10) Smaller of line 7or 8
11) 50% line 10
12) Smaller of 4 or 11
13) Multiplying 9 by 85%.
14) Add line 12 and 13
15) SS x 85%
16) TAXABLE BENEFITS = SMALLER OF 14 or 15

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

Gross Income Inclusion is based on relation of Provisional Income to Base Amount and Adj. Base Amount

A

TRUE

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

Base Amounts (SS Benefits)

A

32k MFJ
0$ MFS
25 Others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Adjusted Base Amounts (SS Benefits)

A

12k MFJ
0 MFS
9k Others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Are scholarships GI

A

NO

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

Employee Achievement Awards GI?

A

NO. if: Meaningful, safety, lengeth of service and < 400$ or 1.6k MUST be tangible property not cash.

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

Gross Income does not include benefits from

A

Diability, health, accident, wc.

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

Excluded Employer Provided Benefits includes:

A

up to 5k dependent care, life insurance proceeds where employer paid premiums, contributions by employer to long term care coverage.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Pensions GI?

A

Amounts withdrawn early are treated as recovery of contributions and NOT GI. Employer contributions are taxable.

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

Combat Zone Compensation GI?

A

Can exclude compensation = highest basic pay that enlisted person can get. +reimbursement for moving if military

17
Q

Gift/Inheritance income?

A

NO but treasure and gamboling is

18
Q

Adoption Expenses GI?

A

Paid by employer NOT GI. Max 14.3k

Phase out at 200k

19
Q

Fringe Benefits GI?

A

No if no additional cost, employee discount <20%. up to 270$ parking , educational assistant up to 5.2k. Cash benefits are never excludable

20
Q

Foreign Earned Income Exclusion Amount

A

107.6k$ Max. Must have tax home in other country, in foreign country 330 days . This is instead of Foreign Tax Credit

21
Q

Employer withholds SS/Medicare for statutory employees if ..

A

COntract states all services are by them, no investment in equipment used, performed on continual basis.

22
Q

Statutory employees cant be in retirement plans by employer

A

Can set up own plan