Numbers/Rates Memorization Flashcards by Justin Bensema

Charges or misconduct reported to CFP Board

30 days

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May appeal DEC ruling

Within 30 days

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PITI %

28% of gross income

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Monthly debt %

36% of gross income

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Kiddie tax unearned standard deduction

$1,150 standard deduction
$1,150 at kids rate 10%
Excess unearned income at parent’s rate

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Kiddie tax earned income

Greater of $1,150
or earned income +$400

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Primary residence home sale gain exclusion

$500k married
$250k single

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18 months COBRA

Voluntary/involuntary termination
Full to part time transition
Employees dependents

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36 months COBRA

Death, Divorce, Separation, eligible for Medicare, spouse+ dependents

Loss of dependent status, dependents with status change

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Disability covers x% of earned income

50%- 60%

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Unemployment benefits duration

Up to 26 weeks

13 week extension in high unemployment periods

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Disability qualifying event

29 months

Expected to last not less than 12 months

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Most disability policy elimination periods

90 days

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Inform simultaneous death act

Deaths within 120 hours = predeceased

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Health FSA contribution limit

$2,850 annually

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Dependent care FSA reimbursement max

$5,000 per year

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Accredited investor

$1mm net worth
$200k annual single income
$300k annual married income

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Frivolous return penalty

$5,000

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Negligence tax underpayment penalty

20% of underpayment

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Tax fraud penalty

75% of underpayment

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Failure to pay taxes penalty

0.5% per month, max 25%

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Failure to file taxes penalty

5% per month, max of 25%

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Avoid penalty on tax underpayment, pay ->

90% of current year tax liability
100% of prior year or
110% of prior year of MAGI $150k+

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Self employment tax

14.13%

1/2 deductible

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Insurance premiums paid in group coverage tax-free up to

$50k of coverage

Tax-free benefit for dependent care

$5,000

Tax-free employer educational assistance

$5,250

Tax free employer assisted adoption benefits

$10k

Tax- free employer subsidized parking

$280 / month

Tax-free discount to employees on company products

20% discount on selling price to customers

State and local tax Personal property tax Real estate tax Limited deduction

$10k combined

These 3 itemized deductions are limited to $10k combined

State and local sales tax Personal property tax Real estate tax

Mortgage interest deductible (on mortgage base balance)

$750k married $375k single Improvements only

Medicate tax

2.35% on wages over $200k 1.45% on wages up to $200k

Credit for child care expense limit

$3k (1 child) $6k total (2+ childs) At 20% of expenses $600 $1,200

Child tax credit MAGI reduction

$2k per child Reduced by $50 for every $1k above $400k MAGI Up to $1,400 per child is refundable tax credit

Retirement savings contribution credit

$2k single / $4k MFJ

Max adoption credit

$14,890 per eligible child

Dividend received deduction US Corp investing in other US Corp

Own 20% or less, exclude 50% divy Own 20-80%, exclude 65% divy Own 80%+, exclude dividend 100%

Accumulated earnings tax

20% $250k can be accumulated for business need

Trust tax exemption

Required to distribute (complex) $300 Not required to distribute (complex) $100

MACRS Tables

MACRS Y1, 5Yr 20% 7-year 14.29% Y2, 5Yr 32%. 7-year 24.49% Straight-line Y1, 5Yr 10%. 7-year 7.14% Y2, 5Yr 20%. 7-year 14.29%

Like kind exchange time constraints: Identified w/i x date of transfer Title received w/i x days of transfer

Identified 45 days Title received 180 days

Deductible net loss from real estate

$25k/ year

Gift of appreciated LTCG Property to 59% organizations (charity)

If basis used, deduct up to 50% of AGI If FMV used. deduct up to 30% of AGI

Social Security Fully Insured

40 Quarters of coverage Currently insured = 6 quarters -> $255 lump sum death benefit

Section 415 Limit Max Ann’l Qualified Limits

$61k or 100% of Salary Only $305k if salary taken into account Annual life annuity= lesser of $245k or 100% compensation(3 year average of highest salary years)

Elective deferral limit

$20,500 with $6,500 catch up after 50

Highly compensated employees (HCE)

Greater than 5% owner Earning $135k in prior year

Key employee

Greater than 5% owner Officer with $200k compensation Greater than 1% owner and compensation more than $150k

Top heavy plan

60% of balances or balances to key employees Salaries capped at $305k for calculation

ADP ACP Testing HCE vs NHCE

HCE not more than 125% of NHCE (ADP is 8%+) HCE not more than 200% of NHCE rate and not more than 2% greater than NHCE Rate (1-8%) 0-2% NHCE x2 = HCE 2-8% NHCE +2 = HCE

SIMPLE Contribution limit

$14,000 max aggregate $3k age 50 catch up

Aggregate Limits Retirement Contribution Max 401(k), 403(b), SARSEP

$20,500 $6,500 catch up

Employer compensation deduction limit

Max of 25% if all aggregate eligible participant compensation

% of community property included in Gross Estate

1/2

Community property step-up?

100% step up IF 1/2 property includes in decedents gross estate

3-year rule within death

If made within 3 years of death (included in gross estate): Gift tax paid out of pocket Transfers of life insurance to the insured

Estate Tax Rate

40%

GSTT Rate

40%

Annual gift exclusion

$16k

Lifetime Exclusion

$12,060,000

Gift Tax Rate

40%

Rate on ALL 3 types of Transfer Tax

40%

Non spouse super annual gift tax exclusion

$164,000

Asset $ to qualify for Medicaid

< $2k in assets

Rule against perpetuities

Must vest no later than 21 years and 9 months after youngest Bene lives (from when trust was created)

Medical expense deduction max

7.5% of AGI FLOOR Includes medical insurance premiums

Margin interest expense deductible up to

Investment income: Interest Ordinary dividends STCG

HALE (Health) Corps Taxation

PSCs taxed at 21% Accumulated earnings > $150k taxed at 20% accumulated earnings tax

Corporate Tax Rate

21%

Section 179 expense election available for 1245 property

Limited to Corporation’s taxable income (current max $1mm)

Deduction for active participation in real estate (plus phase out)

Deduct up to $25k per year < $100k AGI

Cost recovery deductions that can be taken in year 1 (%)

10%

SS included in Gross Income

MAGI > $25k 50% included MAGI > $34k. 85% included

Money purchase permitted disparity

70%

SEP Contribution limits 15% & 25%

15% = 12.12% of net income 25% = 18.59% of net income

Retirement early withdrawal penalty

10% penalty 25% if taken within 2 years of first participation

Simple IRA Special Election (Employer)? Also give match % (baseline)

100% match of first 3% Election: 1% match in no more than 2 years in any 5 year period

UBTI subject to tax

LP income in excess of $1k -> UTBI tax

ISO vs NSO

One year: First $100k are ISOs Excess over $100k are NSOs

15% PSP Shortcut

$Profit x 0.1212 or 12.12%

Charitable contribution tax deduction (insurance policy)

Lesser of Cash Value or Basis Limited to 50% of AGI

Max Gift in any one year without causing gift tax

$12,076,000 Annual $16k plus lifetime $12,060,000

Business property coinsurance

90%