Chapter 1 Flashcards
(52 cards)
Adjustments (deduction to arrive at AGI)
Educator expense, IRA, Student loan interest expense, tution and fee deduction, HSA, moving expense, 1/2 self employment FICA, self employeed health insurance, self employeed retirement, interest withdrawl penalty, alimony paid
Itemized deductions (below the line)
medical, taxes state and local, interest expense, charity, casualty and theft, misc, other misc
Medical threshold (itemized ded)
in excess of 10% AGI
Charity threshold (itemized ded)
up to 50% of AGI
Casualty and theft threshold
in excess of 10% AGI
Miscellaneous
in excess of 2% AGI
Payment of tax with extension
October 15- however the due date for payment of taxes remains april 15
Qualifying widow(er)
File jointly for two years after spouse’s death, the surving spouse must maintain a household for the dependent (son, stepson, daughter or stepdaughter blood or adoption) for the WHOLE taxable year
Head of household
not married/ can be legally spearated or is married and lived apart from spouse for the last six months, not a qualifying widow, maintains a home for HALF the taxable year for son or daughter stepchildren- a dependent parent is not required to live with they can be in nursing home but taxpayer must pay over 1/2 the cost to upkeep their palace, or dependent relatives (cousings, foster paretns do not count)
Widow/widower
Whole year
Head of household
more than half a year
2015 exemption
$4k
IF a person is born or dies during the year
he or she is entitled to a personal or dependency exemption for the entire year
Qualifying Child
“CARES”
Close relative
Age Limit (>19/24 college)
Residency and filing requirements (mor ethan 1/2 tax year - cannot file joint return)
Eliminate Gross income test
Support test changes (child does no cotnribute more than 1/2 of support)
Qualifying Relative
“SUPPORT”
Support (over 50%) test
Under a sepcific amount of taxable gross income test (dependent cannot exceed taxable income of $4k - nontaxable income is OK social secruity, state and muni interest income, tax exempy scholarships)
Precludes dependent filing a joint tax return test
Only citizens (residents of US Canada or Mexico) test
Relative test (children, grandchildren, parents, grandparrents, brothers, sisters, stepchilden, in laws)
or
Taxpayer lives with individual whole year test (a non relative who lives with taxpayer entire year)
Multiple support agreements (qualifying relative exemption test)
a contributor must have contributed more than 10% of the person’s support and the joint contributors are required to file a multiple support declaration
Taxable
FMV
Passive income
only passive losses can offset passive income
Cancelleation of debt
all debts cancelled are included in gross income
Partially taxable fringe benefits-portions of life insurance premiums
premiums above the first $50k of coverage are taxable income to the recipient
Bargain purchase
if an employee sells property to the employee for less than FMV , the difference is income to employee
Non-taxable fringe benefits
life insurance proceeds - however, the interest income element on a deferred payout arrangement is fully taxable
Accident, medical and health insurance
Premium payments are excluded from employees income when the employer paid the insurance premium
Employer payment of employee education expenses
Up to $5,250 may be exlcuded from gross income (undergrad and grad)
