Week 2 Chapter 10

Question 1

Form 1040, Schedule 1

Answer 1

s used for reporting income and adjustments to arrive at Adjusted Gross Income (AGI)

Additional Income: Reported in Schedule 1, Part I.
Adjustments to Income: Reported in Schedule 1, Part II.

Question 2

Educator Expenses

Answer 2

Unreimbursed expenses for teachers up to $300 annually for classroom supplies and materials.
Eligibility: Teachers must work at least 900 hours per academic year

Question 3

Health Savings Account (HSA) Deduction

Answer 3

HSAs must accompany a High Deductible Health Plan.

Contribution limits for 2024:
Individual: up to $4,150 (or $5,150 for age 55+).
Family: up to $8,300 (or $10,300 for age 55+).

Question 4

Moving Expenses for Military Members

Answer 4

Deductible relocation expenses for active duty military members due to a permanent change of station

Question 5

Self-Employment Deductions

Answer 5

Self-Employment Tax: 50% of self-employment tax is deductible.

SEP, SIMPLE & Qualified Plans: Max contribution is the lesser of 25% of self-employed income or $69,000 (2024).

Health Insurance Deduction: 100% of health insurance premiums paid for self, spouse, and dependents is deductible.

Question 6

Education and Student Loan Interest

Answer 6

Student Loan Interest Deduction: Up to $2,500 subject to phaseout based on AGI.

Coverdell Education Savings Accounts (CESA): Nondeductible contributions of $2,000 per child, phased out by AGI.

Question 7

Taxable Income Calculation

Answer 7

Taxable Income = AGI - Deductions

Question 8

Standard Deduction amounts for 2024

Answer 8

Filing Status Basic Amount Additional Amount
Married Filing Jointly $29,200 $1,550
Head of Household $21,900 $1,950
Single $14,600 $1,950

Question 9

Reported on Schedule A and includes

Answer 9

Medical expenses: Over 7.5% of AGI

Taxes Paid: Limited to $10,000 total for state and local taxes.

Mortgage Interest: Deductible on acquisition debt and home equity, with limitations.

Charitable Contributions: Deductible, subject to AGI limits of 50%, 30%, or 20%.

Question 10

Casualty and Theft Losses

Answer 10

Limited to losses from federally declared disasters, with further limitations on deductible amounts.

Question 11

10.3 Qualified Business Income Deduction (QBID) (Section 199A)

Answer 11

Allows a 20% reduction on qualified business income for sole proprietorships, partnerships, trusts, and estates.

Question 12

Qualifying Business Income (QBI)

Answer 12

Only core business income qualifies for QBID, excluding capital gains, dividends, and income from SSTBs

Question 13

Calculation of QBID

Limitations based on overall taxable income

Answer 13

Lower Threshold: $383,900 (MFJ) and $191,950 (Single).

Upper Threshold: $483,900 (MFJ) and $241,950 (Single).

For SSTBs, QBID is disallowed above specified income limits.

Question 14

Aggregation of Multiple Businesses

Answer 14

Taxpayers with multiple QTBs may combine QBI to maximize their deductions under specific conditions.