Ch 7 Flashcards
(52 cards)
Qualified individuals for medical expenses
Taxpayers must pay expenses on behalf of themselves,
Their spouses
or their dependents (even if fail gross income Or joint return
Tests)
Medical expenses deduction
Deducted for anything over 10% AGI
7.5% for those over 65
Medical expenses divorce
Whichever divorced parent pays the medical expenses
Takes deduction
Whoever claims the Dependency exemption doesn’t matter
5 items classified as medical care expenses
1 diagnosis, cure, mitigation, treatment/prevention of disease 2 affecting the body 3 transportation 4 qualified long term care services 5 insurance
Diagnosis, cure, mitigation, treatment or prevention: taxpayers may not deduct treatment for…
Illegal substances
Taxpayers may deduct for medical services from…
Licensed or certified medical professionals including dentists
Are nonprescription medicines, vitamins and health foods deductible?
No
How can a tax payer deduct costs for schools and camps?
Taxpayer must show facility has appropriate medical
equipment and regularly engages in medical services
Deduction for transportation of medical care? Lodging
Allowed if it is done in the case of medical emergency
Or ailing health
Deduction for cost of lodging is limited to $50/night per
person
Long term care
Medical services provided to a chronically Ill individual
Person can’t perform 2 of the following tasks for 90 days:
Bathing, dressing, eating, toilet ting
Timing of medical expense deductions
Only in year pays expenses
Unless prepaid, then deduct in year prepaid
Treatment of insurance reimbursements
Medical deduction reduced
Reimbursement is include in gross income of year received
Deduction of taxes: cash-method tax payers
Deduct taxes when they pay them
Tax deductions: accrual mood tax payers
Deduct taxes in year taxes accrue
Tax
Mandatory assessment levied under the authority of
Political entity for the purpose of raising revenue
6 Services not deductible as taxes
1 vehicle registration + inspection fees 2 registration tags for pets 3 toll charges for highways and bridges 4 parking meter charges 5 utilities 6 special assessments of real estate, sidewalks, streets, lighting
Deductible taxes 6 items
1 state, local and foreign real property taxes
2 state, local property taxes based on value
3 state, local, war profits
4 state and local taxes if tax payer makes election to deduct
Taxes
5 environmental tax
6 state, local taxes incurred in trade or business
For individuals: state and local taxes are normally…
An itemized from AGI deduction
Deduction of federal taxes
Usually not deductible
Employer’s portion of social security tax is
Federal customer’s and excise tax in taxpayer’s business is
State and local sales tax
Tax payers can deduct state and local sales tax instead
Of state and local income tax
What kind of deduction is for personal property taxes? What’s the exception?
From AGI
For AGI when for business purposes
Apportionment of real estate taxes
Allocated between seller and purchaser based on amount of
time of Year each taxpayer owns the property
Self employment taxes
50% deducted as For AGI deduction
Affordable care act taxes deductions
Not deductible by individuals
