ABCDEFGHIJKLMNOPQRSTUVWXYZ
1
INDIVID
2
Filing Status (End-of-Year Test for S & MFJ)R1-M1Qualifying RELATIVE - "S. U. P. O. R./T."
3
QSS: Must pay 1/2 costs to maintain household where dependentREQSS - Support: TP must supply > 1/2 of support
4
lives for WHOLE taxable year (Widower = Whole year)
STATUS
U - Under gross income limitation of $5,200 TAXABLE income
5
 • May use MFJ tax return for 2 years following year of deathP - Precludes dependent filing a joint return (dependent can't file MFJ)
6
HoH: Must be unmarried/separated & maintain household that's O - Only Citizens of US or Residents of US, CAN, MEX
7
principal residence of Qualifying person for > Half the yearR - Relative (anyone but foster parents/cousins) OR
8
Qualifying person:T - TP lives w individual IF UNRELATED for WHOLE year! (freeloaders)
9
 • Dependent child
10
 • Relative (S.U.P.O.R.T. test)Qualifying CHILD - "C. A. R. E. S. "
11
 * Parent (NOT required to live w taxpayer)C – Close Relative: (step)Child, (step)siblings, niblings (adopted & foster)
12
A – Age: <19 OR <24 if FT student (no limit if disabled)
13
Multiple Support Arrangements (Form 2120)R – Residency: Must live w taxpayer > 1/2 year (US, CAN, MEX) NO MFJ
14
Must provide > 10% & < 50% support & be Qualifying RELATIVEE – Eliminate gross income test ($5,200)
15
Joint contributors must file multiple support declaration on 2120S – Support: CAN'T contribute > 1/2 of own support (exclude scholarships)
16
17
Children of Divorced Parents (YER PARENTS R DIVORCED!)R1-M2NONtaxable FRINGE Benefits (EXCLUDE!)
18
Dependent of parent who has custody for greater part of the yearGrossEmployER paid LIFE Ins Coverage: up to $50k group-term life ins COST
19
 • If equal custody, parent with higher AGI can claim
Income1
EmployER paid Health Ins Premium: include paid to employEE unless reimb
20
EmployER paid Payment of employee EDU expenses ($5,250)
21
Tax EXEMPT INTEREST IncomeMeals & Lodging: if required/for convenience of employer (Barracks)
22
State & Local Govt Bonds/Obligations (MUNICIPAL)FSA (Section 125): $3,300 (forfeit unused 2.5 months after ye)
23
U.S. Series EE Savings Bonds IF:Adoption Assistance: $17,280 (MAGI $259,190 - $299,190)
24
 • Used to pay for Higher EDU for TP, spouse, dependentDependent Care Assistance: $5,000 for dependents <13yo OR disabled
25
 • If used for dependent, must be registered in TP/Spouse nameQualified Tuition Reduction: Undergrads or Grad TAs receiving pay (janitor)
26
 • TP >24yo when issued & MFJ if marriedQualified Employee Discount
27
 • Phase Out MAGI $99.5k-$114.5k | $149,250-$179,250 • Merch: Exclude GP% (they sell it to you at cost)
28
 • Service: Exclude 20% of FMV
29
Taxable Interest Income (Schedule B bc INT is a BITCH!)Qualified Transport/Parking: $325/mo
30
Federal, Corporate, Industrial dev BONDSQualified NON-Roth Retirement Plans (Traditional)
31
Interest paid by federal/state govt for LATE tax refund (if itemized) • Contributions made by employER/EE (NonTaxable)
32
 • Benefits Received (Taxable in year of distribution - Ordinary Income)
33
DIVIDEND Income (Schedule B)
34
From Corp E&P: Taxable DIVROTH IRA (Pay taxes NOW) $7k + $1k if > 50yrs
35
No E&P, TP HAS Basis: NONTaxable & Reduces Basis (RoC)Dist of principal (contributions) are NEVER TAXABLE (can't deduct)
36
No E&P, TP has NO Basis: Taxable Capital GAINDist of earnings only taxable if distribution is NONQUALIFIED
37
Qualified DIVQUALIFIED Dist:
38
 • held > 60 days during 120 days begin 60 days b4 ex-DIV date • Made 5 yrs after 1st day of year where TP made 1st contribution AND
39
 • Taxed @ LTCG rates 0%, 15%, 20% • ONE of the following:
40
NONqualified DIV (ESOP - employee stock ownership plan) - 59.5+ yrs OR
41
 • Taxed as ORDINARY INCOME (Investment income) - Disabled OR
42
 • Paid by CU, mutual savings banks/ins Co, farmer's coop - First time homebuyer ($10k max) OR
43
 - Distribution is made to beneficiary after TP's DEATH
44
TraditionaL IRA (Pay taxes LATER) $7k + $1k if > 50yrs • Contribution Limits: $146k-$161k | $230K-240K
45
Dist of principal taxable IFF deduction taken for contributionExceptions to 10% PENALTY (HIM-DEAD-TED)
46
Dist of earnings ALWAYS TAXABLE (ORDINARY INCOME)H – Homebuyer (1st time): Dist used for home purchases (10k) w/i 120 days
47
Dist of NONdeductible prorated btwn principal (RoC) & earnings I – Insurance (medical): Unemployed w 12 weeks of unemployment comp
48
Must take req'd min dist by 4/1 of year following AGE 73M – Medical expenses in excess of 7.5% AGI Floor
49
D – Disability: Only permanent
50
AnnuitiesE – Education: Books, fees, tuition
51
Fixed PeriodA - Adoption/Birth: made w/i one year of birth ($5k max exclusion)
52
Annuity exclusion ratio = Original invest/expected value of annuityD – Disaster: Qualified natural disasters ($22k max/disaster)
53
Expected value = # payments * amount of each paymentT – Terminal illness/death of account owner
54
Earnings are taxable as Ordinary IncomeE – Emergency expense for personal/family ($1k/year)
55
Lifetime AnnuityD – Domestic abuse (LESSER of $10.3k or 50% of retirement account)
56
Nontaxable portion = Original invest/factor (IRS life expectancy)
57
If TP lives longer, all additional payments are taxableState & Local Tax Refunds
58
If TP lives shorter, unrecovered invest deducted from final returnIf TP itemized in PY, refund taxable to extent itemized deduct > STD deduct
59
If TP took STD deduction in PY, refund is NONtaxable (bc you have STD)
60
Social Security Income
61
MAGI = (Tax-exempt INT + 50% SS benefits) + AGIAlimony (ADJ for AGI) & Child Support
62
Low income: No SSI is taxable (MAGI < 25k | 32k)Divorce: Alimony Taxable/deductible < 12/31/18 < NOT taxable/deductible
63
Middle income: Up to 50% taxable (MAGI 25k-34k | 32k-44k)Child Support: nontaxable (payments apply to child support FIRST!)
64
Upper income: Up to 85% taxable (MAGI > 34k | 44k)
65
Scholarships & Grants
66
Foreign Earned IncomeDegree-seeking student: Scholarships/grants excludable up to the amount
67
TP abroad can exclude $130k of foreign earned income IF:spent on tuition, fees, books, and supplies (not R&B)
68
1. Bona Fide Residence Test: Be BF resident for WHOLE yr OR • NO services were/are/will be performed as a condition
69
2. Physical Presence: Be in country for 330 full days of 1 yr periodNon Degree-seeking student:
70
 • Scholarships are fully taxable @ FMV
71
NONdeductible Biz Exp (Sched C for your little Company)R1-M3Tuition Reductions:
72
Salaries paid to sole proprietor (considered withdrawal)Gross • Graduate TAs & RAs are taxed on reduction if it's their ONLY comp
73
Federal Income Tax (FIT)
Income2
74
PERSONAL portion of Meal, Auto, Travel expenseDEDUCTIBLE Biz Exp (Sched C for your little Company)
75
 • If foreign travel mostly personal, deduct NO travel exp (airfare) • COGS & SALT • Depr of biz assets
76
Bad Debt Exp for CA$H basis taxpayer (never reported income) • Salaries/commish paid to others • Employee benefits
77
Charitable contributions (itemize on Schedule A) Ah-temize :) • Office exp (supplies/equip) • Legal/professional services
78
Entertainment expense • Auto exp ($.70/mi) • W/O bad debts (accrual basis)
79
 • Biz meals @ 50% • Biz loan INT: INT income + 30% ATI
80
Separately Stated Items*NO limit if gross receipts <$31M
81
Carved out & flow thru SEPARATELY to the owner:Net Business Income - TWO FEDERAL Taxes!
82
• Charitable Contrib (A-ahtemize) • STCG/L & LTCG/L (D-dispo)1. FEDERAL Income Tax - 100% of earnings
83
• INT INCOME (B-bitch) • Section 1231 G/L (D-dispo)2. SE Tax = Net Earnings * 15.3% (2.9% Medicare + 12.4% SS) | $176.1k
84
• DIV INCOME (B-bitch) • Rental RE inc/loss (E-ez $) • Net earnings from SE = 92.35% of SE Income (15.3%/2 = 7.65%)
85
• Section 179 • Royalties (E-ez $) • All SE income subject to 2.9% medi, up to $176.1k subject to 12.4% SS
86
 • Partner's share of ord biz income is SE tax if ACTIVELY involved
87
88
Rental Income (Schedule E - EZ$)
89
Guaranteed Payments to PartnersNet rental income = Gross rental income + prepaid rent + rent cancellation
90
Biz exp that reduces partnership ordinary income (loss) payment + improvement in lieu of rent - rental expenses
91
Flow thru as separately stated item of income on recipients K-1RE Taxes are ALWAYS deductible BUT:
92
Guaranteed payment for Services are subject to SE tax • Rental determines if reported as itemized deduction on Schedule E
93
Rental of Residence
94
Excess business loss limitations (NOL)Rented < 15 days (personal residence):
95
XS of biz deductions over biz income + threshold ($313k | $626k) • Income is excludable
96
Combined biz loss in XS of threshold is carried forward as NOL • Mortgage INT (1st/2nd home) & RE Taxes = itemized deductions
97
NOL BEFORE 12/31/17 (Pre TCJA):Rented > 15 days: (personal/rental)
98
 • Can offset 100% of future TI (CF 20yrs) • Must use personally for GREATER of 14 days OR 10% of rental days
99
NOL AFTER 12/31/17 (TCJA): • Expenses must be PRORATED between Personal & Rental use
100
 • Can be carried forward INDEFINITELYNonresidence (Rental)