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List the Deductions for adjusted gross income
- •IRA contributions
- •Self-employed health insurance premiums
- •Keogh contributions
- •Penalty on early withdrawal of savings
- •Alimony payments
- •Moving expenses
- •Student loan interest
- •Tuition and fees
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IRA contributions: Individual Retirement Account (income limit) are
- - retirement savings
- - up to $4,000/year per spouse
- - tax deductible (make contribution as late as 4/15 of the next year)
- - earnings grow tax-deferred
- - minimum age to take money out is 59½ years of age
- - new version: “Roth IRA” – no deduction, nontaxable upon distributions
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for Keogh contributions: IRAs for the self-employed,
is there a 4,000 maximum?
no $4,000 maximum
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to make sure alimony payments are acurate the
- Ex-Husband (Payer) must Report Ex-Wife’s SSN
- Ex-Wife (Recipient)
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what are some examples of moving expenses?
- A) transportation of household goods
- B) travel to new location (no meals, but hotels, gas, airfare)
- 1) not for convenience, so for a job
- 2) greater than 50 miles
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Standard Deduction (2010 tax year)
for Single, Married Filing Joint, Married Filing Seperate, head of Household, Qualifying widow (er) and old age & blindness if married filing joint or single
- •Single $ 5,700
- •Married filing Joint $11,400
- •Married filing Separate $ 5,700
- •Head of household $ 8,400
- •Qualifying widow(er) $11,400
- •Additional amounts for old age and blindness
- ($1,100 if MFJ; $1,400 if S)
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When do we use Itemized Deductions (claimed on schedule A
only deduct if total exceeds the standard deduction)
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Itemized Deductions Include...
- •Medical
- •Taxes
- •Interest
- •Charitable contributions
- •Casualty and theft losses
- •Miscellaneous
- Employee business expenses
- Other
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Medical Deductions include
- - doctors, hospitals (not vet bills)
- -prescription drugs and insulin
- -health insurance premiums for employees (paid by employee; if employer is paying for it you cannot claim it)
- - certain home improvements (ex. chair lift installation)
- - travel to a specialist for treatment (lodging, airfare, gas)
- - cosmetic surgery only if required to; elective cosmetic surgery no longer a deduction
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When claiming medical deductions...
- - when claiming these deductions,
- - dental
- -orthodontics
- - eye care
- subtract
- 1) health insurance proceeds
- 2) 7.5% of AGI (floor)
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Types of Interests for itemized deductions
- - mortgage interest on house on 2 homes (debt cannot exceed $1,000,000)
- and home equity loans
- - points: 1 point = 1% of loan value
- - investment interest: deductible to the extent of your investment income
- - consumer debt: nondeductible
- - credit cards
- - car loans
- - personal loans
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Itemized deduction of Casualty and theft losses
- - subject to 2 floors (amt. you have to reduce the deduction from)
- - $100 per event (hurricane, robbery, theft)
- - 10% of AGI per year regardless of how many events
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Itemized Miscellaneous Deductions include
- - unreimbursed employee business expenses
- -supplies
- -equipment
- -tax return prep fee
- -job hunting – resume, travel
- -business use of automobile
- – present 50. cents/mile
- commuting is personal
- -supplies
- - equipment
- -union dues
- - subscriptions related to business
- - travel
- - entertainment (lose 50% of deduction)
- - meals (lose 50% of deduction)\
- - other
- -tax return prep fees
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After Indemized deduction is determined...
Add all upand subtract 2% of AGI and compare to standard deductions
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Reduction of Deduction-
– if make too much money have reduction of itemized deductions
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A note about Exemptions
if your parents claim a dependency exemption for you, the you cannot claim yourself
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Exemptions for ($3,650 for 2010)
- •Personal
- •Dependency
- –Qualifying Child:
- •Relationship Test
- •Age Test
- •Residency Test
- •Support Test
- –Qualifying Relative
- •Not a qualifying child
- •Relationship/household Test
- •Gross Income Test
- •Support Test
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Where to file- For Louisiana residents:
- Internal Revenue Service
- Austin, TX 73301-0002
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