Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
27 Cards in this Set
- Front
- Back
|
Medical expenses deductions
|
Must be 7.5% of AGI to be deductible. Anything requiring a Dr. or a prescription is deductible. Hospital stay is deductible. Medical care, eye appts. ect. Travel expenses to go to and from the hospital are also included.
|
|
|
What is excluded when calcualating medical expenses?
|
If ins pays you can't deduct. Can't deduct cosmetic surgery, over the counter drugs aren't deductible. Long term care insurance is deductible because it's a form of insurance.
|
|
|
Taxes come from
|
W-2
|
|
|
What can you take the greater or in regards to taxes?
|
Grater of sales tax or what the sales tax would be.
|
|
|
Real estate taxes
|
Taxes you pay on homes you own. Can ONLY deduct 2 homes. If you do own 2 deduct both.
|
|
|
Other taxes
|
Popular item now is foreign taxes paid.
|
|
|
What 2 choices do you have for how to deduct foreign taxes paid?
|
1. Itemized deduction
2. Tax credit you get to choose |
|
|
Interest paid on home
|
When you buy a home they set up an escarow account you will pay principle, interest, insurnace, and real estate tax.
|
|
|
What part of house payment is deductible and why?
|
Principle is not deductible because it is a repayment of capital.
Interest is a tax deductible item Real estate tax is dedcutible |
|
|
IF you buy a house and someone loans you $$$ what hapens?
|
IF you deal with a personal individual you must identify the person because if you're recording interest expense must ensure other individual is reporting income.
|
|
|
Interest income hedging
|
Buying a financial instrument for less than the face value of the stock essentially broker loans you 500 but then that's really interest income so you must report it.
|
|
|
Cash contributions
|
really refers to checks it's things you can document and prove.
|
|
|
WHat is the rule for cash contributions?
|
Can only be 50% of gross income per year. If you make 10,000 donate 6000 you can deduct 5000 this year and carry foward the extra 1000 indef.
|
|
|
Non-cash contrinutions
|
furniture, clothing, cars
|
|
|
WHat are the rules for non-cash contributions?
|
Can give up to $500 can deduct up to $500. If it exceeds 500 you must fill out an additional form.
|
|
|
How do you value your cost of non-cash contributions?
|
Have to classify it as excellent, good, very good, poor IF an item is poor cannot be deducted.
|
|
|
Deductions for a car
|
1. If you give a car depending on the org some wil give you blue book value.
2. Others don't they tell you the cash value when they go to the car market and sell it for whatever they sell it for becomes the amount of non-cash deduction you get. |
|
|
Social security
|
Rockhurst pays me 106800 I have a side job that pays additional 20,000 so I end up overpaying social security. I get a refund for excess paid, employer does not get any aditional $$ back.
|
|
|
WHat does a W-4 do?
|
Sets up your withholdings. Says how much will be deducted from your wages.
|
|
|
IF you don't want to own how many deductions should you take?
|
zero
|
|
|
The more deductions you have
|
the more disposable income you get
|
|
|
IF you underpay by more than 10%
|
You have a 12% penalty
|
|
|
Dividend ex date
|
IF I hold the stock at the ex date at the close of the day I get the div even if I sell it before payment date
|
|
|
Exceptions to qualified div
|
If tax rate for taxpayer is 25% or less all QD are taxed at 0%
|
|
|
Like kind exchange
|
Change one car good for another car must determine basis. Whoever has higher basis is the basis which will be used. No tax consequences
|
|
|
Inhereted basis
|
Person dies you get 2 choices:
1. MV of stock at death 2. Or executive can use MV 6 months after date of death. Can only use this if it lowers your estate tax. Now you must deal with market value. |
|
|
Gift basis
|
When you give kids your stock they inherit the cost basis. When they go to sell it they must recognize cap gain/loss for difference btwn cost and MV
|
