Numbers to Remember Flashcards
(28 cards)
Social security tax rate and cutoff
6.2% and 168,600
Medicare rate and cutoff
1.45%, no cutoff
Self employment tax
15.3% on 92.35% of profit on Schedule c
there is a 50% deduction above the line tho
MFJ Standard Deduction
$29,200
MFS Standard Deduction
$14,600
HOH Standard Deduction
$21,900
Single Standard Deduction
$14,600
Blind or over 65 additional deduction if MFJ or MFS per person
$1550
Blind or over 65 additional deduction if HOH or Single
$1,950
Dependent on another return standard deduction
the greater of $1,300 or earned income plus $450
QBI cutoffs
50% of W-2 wages or 25% of W-2 wages plus 2.5% of unadjusted basis of qualifying property
20% of taxable income
Excludes service businesses over $191,950 or $383,900
Additional medicare tax
.9% above $250,000 MFJ or $125,000 MFS or $200,000 single and HOH
Corporate dividends received deduction
Ownership <20% of stock: 50% DRD
Ownership between 20% and 80%: 65% DRD
Ownership >80%: 100% DRD deductions
Charitable contributions deduction
100% deductible up to 10% of taxable income before charitable deductions and before dividends-received deduction
Excess contributions can carry forward for 5 years
AMT rate for corporations and floor
15%
only applies to corps with over $1 billion in income for 3 preceding years
only owed if tentative minimum exceeds regular
creates carryforward
Corporate payment and return filing requirements
15th day of 4th month, may extend to 15th day of 9th month
Extension does not extend the payment deadline
Estimated payments are due on the 15th day of the 4th, 6th, 9th, and 12th months
Must pay 100% of tax due, small corporations (TI<$1 million) may use safe-harbor rule of paying 100% of prior year tax
Individual payment deadlines
Estimated taxes on self-employment and investment income are due on April 15, June 15, September 15, and January 15
Underpayment penalty avoided by paying: 90% of current year tax of 100% of prior year tax (110% if AGI > $150,000)
Child credit amount
$2,000 per dependent child under age 17, $500 for certain non-child dependents, phases out for high-income taxpayers starting at $400,000 mfj
Dependent care credit
for children less than 13 years old or other dependents who can’t care for themselves, between 35% and 20% of child-care costs, depending on AGI
nothing if over $438,000
Depreciation for passenger automobiles
5 year MACRS depreciation
$12,200 in year one, $19,500 in year two, $11,700 in year 3, and $6,960 for all years following
Section 179 limitation and threshold
$1,220,000
anything over is capitalized and depreciated
Limited amount is reduced by the aggregate cost of qualifying property in excess of a threshold
Threshold as of 2024 = $3.05 million
Deduction under Section 179 is limited to taxable business income before the deduction
Any non deductible expense carries forward to future years
Bonus depreciation percentages
100% bonus depreciation permits immediate expensing of 100% of the cost of qualifying property placed in services after Sept. 27, 2017, and before Jan. 1, 2023
Bonus % phased down after 2022:
80% in 2023
60% in 2024
40% in 2025
20% in 2026
Organizational and start up costs deduction
Organizational costs examples: legal fees, accounting fees, filing fees, etc.
Start-up costs examples: cost of investigating a new business, expenses incurred before the new business is operation
Both are subject to the following cost recovery rule:
First $5,000 is deductible
Deduction reduced by any amount of cost in excess of $50,000
Nondeductible costs are capitalized and amortized over 15 years
Capital loss limitation
Individuals can deduct $3,000 of net loss per year against ordinary income
You can carryforward the remaining loss indefinitely
Corporations can carryback three years and forward five years against capital gains
