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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