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19 Cards in this Set
- Front
- Back
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after how much money do you have to start filing a tax return for single and married in 2011 and 2010
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2011
-single: 9500 -married: 19,000 2012 -single: 9350 -married: 18,700 |
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describe tax form 1040
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"long form"
fill out once you own a house used to itemize deductions |
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describe tax form 1040EZ
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"short form"
don't itemize deductions no dependents |
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describe tax form 1040A
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"short form"
don't itemize deductions may claim tax credits |
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describe tax form 1040ES
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estimates yours taxes
-used by self-employed -filed quarterly |
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describe tax form 1040X
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amend a prior return
(used to make corrections) |
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how many tax forms are audited
-who are mainly targeted -are random audits still being used |
less than one percent
-higher incomes, self-employed, high levels of 'passive' income (tax shelters, partnerships) -yes |
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what is an audit
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a professional inspects an individual's monetary accounts
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what is considered gross income
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income, wages
portfolio income (investments) passive income (tax sheltered income) Short term capital gains (stocks within a year) |
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what is considered an adjustment
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flex spending accounts
student loan interest alimony (divorce) paid moving expenses |
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what 3 things are considered itemized deductions
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mortgage interest
property taxes charitable gifts |
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what is the formula for average tax rate (ATR)
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tax liability / taxable income (includes dividents,LTCG)
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what are the 5 strategies to help reduce taxes
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1. maximize deductions
2. invest long term (>1 year) 3. shift income to lower tax bracket 4. invest for tax-exempt income 5. defer taxes to future |
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maximizing deductions is one of the 5 strategies to reduce taxes; what are the 5 ways to maximize deductions
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tax deferred retirement programs
flex spending account health savings account shifting deductions and charitable gifts using home (mortgage interest is tax deductible) |
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what does FICA stand for
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Federal Insurance Contributions Act
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for FICA, what is the tax rate up to 2010
-what is the tax rate in 2011 and 2012 |
-6.2%
-4.2% |
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for FICA, what was the upper limit in 2011
-in 2012 |
-106,800
-110,100 |
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what is the tax percentage for Medicare
-is there an upper limit? |
1.45%
-No |
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how does your SS and Medicare tax rate change if you are self-employed?
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it doubles
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