Taxes Flashcards
(40 cards)
Above the line deductions come from? Located?
deduct FROM AGI
Schedule 1 part 2
MDS GRIDS (exclusions)
Muni Gifts
Deb Discharged Residence Sale
Support Payments Inheritance
Death Benefits
Scholarships
Above Line Deductions (adjustments taken from AGI)
Educator and business expense, HSA, military moving, 1/2 self employment tax, retirement contributions SEP SIMPLE IRA for self employed, health insurance premium for SE, early w/d penalties on CD, alimony pre 2019, IRA with phaseout, student loan interest
Itemized Deductions- below line
on schedule A
SALT- $10,000
choose when greater than standard deduction or it’s required or if
large uninsured medical/ dental expenses 7.5%
paid mortgage interest or real property taxes on home
uninsured casualty or theft loss from declared disaster 10%
large contributions to charity
Standard Deduction
depends on:
taxpayer filing status
age- 65 or older
disability- blind
dependent or not
deducts FROM AGI
Marginal Tax Rate
show the amount of tax paid on the next dollar of earned income
*marginal tax rate will also be higher than avg tax rat
Average Tax Rates
show the overall share of income paid in taxes
Tax paid/taxable income = avg tax rate
Tax Deductions
reduce taxable income
adjusted BEFORE application of tax tables
Reduces tax by marginal %
more valuable to high income tax payers
Tax credit
reduce tax due dollar to dollar
adjusted AFTER tax due is calculated
benefits all tax payers
refundable tax credits
offset tax payers liability
credits; earned income
additional child tax credit
American opportunity credit** tested
nonrefundable credits
offset taxpayers liability
child and dependent care and credit**
child tax credit**
retirement savings contribution credit
Lifetime Learning Credit**
Deductions FROM AGi
SMASH KITEE
Self employment insurance
Moving expenses
Alimony paid (pre 2019)
Student load interest ($2,500)
Hsa
Keogh/SEP
IRA contributions
Taxes for self employment (1/2)
Early W/d penalty
Educator Expenses
Steps to calculate marginal
- Place taxable income within marginal bracket
- find base amount to pay
- Calculate excess amount (taxable income-lower bracket threshold)
- Apply Marginal tax rate to excess amount then add to base amount
Form 1040
indivodual income tax return
Form 1040x
1040 amended tax return
Form 1040ES
Estimated Tax for individuals
Form 1041
104-WON (rich needs)
estate and trust
Form w-2
wages & taxes
Schedule 1
1 more thing..
Additional income and adjustments to
Schedule A
Itemized deductions
Schedule B***
interest and dividends
Schedule C
company cash
Profit/loss from business
Schedule D***
Did it grow?
Capital Gain/Losses
Schedule E
rEi- empire
Rental and Royalty
