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CPA REG > Adjustments/Deductions > Flashcards

Adjustments/Deductions Flashcards

1
Q

educator expenses

A

adjustment

up to $250/$500

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2
Q

IRA

A

adjustment ($5500/$11k)
unless:
- RICH ($60-70k or $96-110)
- HAS retirement plan

phaseout: excess/range * max deduction
Roth NOT deductible

Coverdell $2000/child/year

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3
Q

student loan interest expense

A

adjustment
up to $2500
phaseout range

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4
Q

tuition/fee deduction

A

adjustment

up to $4000

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5
Q

health savings account

A

adjustment
up to $3300/$6550 (families)
increased by $1000 for age 55

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6
Q

moving expenses

A

adjustment

NOT meals, pre-move house hunting, expense of breaking lease, temporary living expenses

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7
Q

50% of S/E FICA

A

adjustment

non-deductible on Schedule C

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8
Q

S/E health insurance

A

adjustment (100% deductible)

non-deductible on Schedule C

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9
Q

S/E retirement

A

adjustment
non-deductible on Schedule C
Keogh plan up to $52k or 25% net earnings (lesser of the two)

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10
Q

interest withdrawal penalty

A

adjustment

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11
Q

alimony paid

A

adjustment

child support not deductible

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12
Q

attorney fees (discrimination/whistle-blower cases)

A

adjustment

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13
Q

domestic production activities

A

adjustment

9%?

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14
Q

adjustment

A

deductions above AGI

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15
Q

deduction

A

deductions below AGI

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16
Q

additional deduction

A

elderly (65+) and/or blind

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17
Q

standard deduction

A

$6200 single / $12400 married

higher of $1000 or earned income + $350 for dependent

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18
Q

medical expenses

A

deduction

qualified expenses (medical/accident insurance)
- reimbursements
- 10% AGI (7.5% elderly)
= deductible amount

non-deductible:

  • life insurance
  • capital expenditures
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19
Q

real estate taxes (state/local/foreign)

A

deduction

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20
Q

income taxes (state/local/foreign)

A

deduction

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21
Q

personal property taxes (state/local/foreign)

A

deduction

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22
Q

state taxes

A

deduction

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23
Q

federal taxes

A

NOT a deduction

including social security

24
Q

inheritance taxes

A

NOT a deduction

25
Q

business/rental property taxes

A

NOT a deduction

26
Q

home mortgage interest

A

deduction allowed on 1st or 2nd home

  • up to $1MM ($500k MFS) for buying, constructing, improvement (acq)
    FULLY DEDUCTIBLE
  • up to $100k ($50k MFS) for any purpose (non-acq)
27
Q

investment interest expense

A 
deduction
up to net (taxable) investment income
- portfolio income
- rents, royalties
- net LT and ST capital gains
28
Q

interest expense to purchase tax-free bonds

A

NOT a deduction

29
Q

personal (consumer) interest

A

NOT a deduction

interest on borrowed funds, credit cards, life insurance loans

30
Q

interest on federal/state/local tax

A

NOT a deduction

31
Q

prepaid interest

A

deduction when incurred AND paid

32
Q

educational loan interest

A

adjustment

up to $2500, excess not allowed

33
Q

charitable contributions

A

deduction (unless not itemizing)
up to 50% of AGI (cash)
up to 30% of AGI (FMV of property of LT capital gain)
ST capital gain valued at lower of cost or FMV
services (nondeductible)
carryover 5 years

34
Q

gifts

A

NOT a deduction

35
Q

political contributions

A

NOT a deduction

36
Q

casualty/theft losses

A

deduction

loss
- insurance recovery
- $100
- amount exceeding 10% AGI
= deductible loss
37
Q

unreimbursed business expense

A 
deduction 
up to amount exceeding 2% of AGI
- overnight business travel
- transportation 100%
- meals/entertainment 50%
38
Q

educational expenses

A

deduction

those not deducted above AGI

39
Q

miscellaneous expenses

A

deduction (amount exceeding 2% of AGI)

  • uniforms
  • business gifts ($25/recipient/year)
  • professional journals
  • tax prep fee
  • debit card convenience
40
Q

gambling losses

A

deduction

up to gambling winnings

41
Q

child/dependent care

A

tax credit

20% of expenses if AGI of $43k
35% of expenses if AGI $15k or less
decrease by 1% for each $2k of AGI over $15k or less

42
Q

elderly and/or permanently disabled

A

tax credit

15% of eligible income

43
Q

tax credit

A

reduces income tax liability

44
Q

American opportunity credit

A

tax credit

first 4 years, $2500 per person

45
Q

Lifetime learning credit

A

tax credit

after first 4 years, $2000 max

46
Q

qualified tuition program

A

tax credit for 529 accounts

exempt from federal income taxation

47
Q

adoption credit

A

tax credit

48
Q

IRA credits

A

tax credit

eligible for taxpayers at least 18 by close of taxyear, not full time student, not a dependent

49
Q

earned income credit

A

refundable tax credit

50
Q

withholding tax

A

tax credit against taxpayer’s liability

refund if credit exceeds liability

51
Q

alternative minimum tax (AMT)

A

ensures minimum payment of tax for those who take large number of deductions

pay greater of regular tax OR tentative min tax

52
Q

AMT exemption formula

A

INDIVIDUAL

$52,800
- 25% (AMTI - $117,300)

exemption cannot be less than 0

53
Q

AMT adjustments

PANICTIMME

A 
[ADJUSTMENTS] (adds/subtracts)
Passive activity losses
Accelerated depreciation
Net operating loss of taxpayer
Installment income of dealer
Contracts (%age completion vs completed)

[DEDUCTIONS] (adds to regular tax income)
Tax “deductions”
Interest deductions on home equity loans
Medical deductions (excess 10% AGI)
Miscellaneous deductions NOT allowed
Exemptions (personal) and standard deduction

54
Q

AMT preferences

PPP

A

always add backs

Private activity bond interest income
Percentage depletion the excess over adjusted basis property
Pre-1987 accelerated depreciation

55
Q

AMT credit

FACCE

A 
offsets regular tax only not future AMT
Foreign tax credit
Adoption credit
Child tax credit
Contributions to retirement plans
Earned income credit
56
Q

AMT credit carryforward period

A

forever

CPA REG (7 decks)

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