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;
14 Cards in this Set
- Front
- Back
Four step tax procedure
|
Total Income
less above the line deductions = Adjusted Gross Income less standard or itemized deductions less exemption amount = Taxable Income |
|
Alternative Minimum Tax
|
Taxable income for regular tax purposes
+ or - AMT adjustments + AMT tax preferences = Alternative minimum taxable income |
|
Tentative Minimum Tax
|
AMT before deducting regular tax
|
|
Tentative Minimum Tax Calculation
|
26% on 1st $175,000 AMTI in excess of exemption
28% on any additional excess of AMTI If AMTI is greater than AMTI maximum, threshold is reduced to zero |
|
Computing AMT
|
AMT equals any excess of tentative minimum tax over the individual's precredit regular income tax
|
|
AMT has 2 brackets
|
26% of the first $175,000 in excess of exemption ($87,500 for married filing jointly)
28% of any additional excess AMTI |
|
Standard Deductions
|
Married jointly or surviving spouses $11,900
Married filing seperately $5,950 Head of household $8,700 Single $5,950 |
|
Standard Exempiton
|
$3,800 per person
|
|
Qualifying Child
|
-Same residence as taxpayer for half the year
-must be younger than tax payer and 19-24 if a student -must not have provided half his own financial support -must not have filded a joint tax return with a spouse unless such a return was filed only as a refund clain |
|
Qualifying Relative
|
- must receive more than half her financial support from the taxpayer
- must not have gross income for the year in excess of the exemption amount |
|
Child credit
|
$1,000 child credit for a depenedent who is a qualifying child under age 17 at the close of the year
|
|
Dependent Care Credit
|
$3,000 for one dependent and $6,000 if taxpayer has 2 or more dependents
|
|
Limited Standard Deduction for Dependent
|
basic standard deduction may not excedd $950 or "earned income" wages, salary , self-employment plus $300
|
|
No Exemption on Dependent's Return
|
Standard deduction is allowed ($5,950), no Exemption deduction is allowed
|