[jpowell31]

I compiled this from other threads on the forum (so effectively a bump) but added some extra notes, which is why it’ll seem very busy, especially having copied & pasted…and this is what’s helpful to me. i may have left something out if i’ve beaten it dead… a lot of this does but doesn’t hurt i guess. reformat and add/update/ simplify for your benefit. please let me know if i’ve missed something obvious or i’ve made in error (which i’ll blame on someone else for their thoughtfulness to post here in the first place! :)).

1040 – Income:
Schedules B, C, D, E, F go to 1040 income + Income: WAT IS UP
Wages
Alimony received (Include Cash paid periodically & required by law; Exclude lump-sum prop settlements & Child Support which takes payment priority)
Taxable state/local refunds (Tax-Benefit Rule) income to include = lesser of the amount itemized deduction over standard deduction OR lesser of the standard deduction on that return or the amount of state taxes paid. Note: you can only deduct state income OR state sales tax. This income is only if you elected to deduct state income tax & if it benefited previous year’s itemized deduction (must have itemized))
IRA distributions (income) – (Required Minimum Distributions “RMDs” by 70.5; Deduct Penalty Before 59.5). Deductible AKA Traditional (Deduct Now; Tax Distributions)
Roth (Nondeductible; Tax-Free Distribution). Penalty tax exceptions* HIMDEAD
Social security
Unemployment
Pensions & annuities
Other income – excess of $50K life insurance premium; Exclude health insurance premium

*No penalty tax on IRA withdrawal when (HIMDEAD):
Homebuyer
Insurance-medical
Medical expense
Disability
Education
Health

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[jpowell31]

Adjustments: SHIT IM ASS DOPE

Student loan interest
Health savings account – (HSA) Deduct $3,300/S $6,500/Fam at least $1,250/2,500 Deductible Max out-of-pocket $6,350/$12,700; (MSA) Participants of small business less than 50 employees & can’t enroll after 2008,$3,450/$6,550 out-of-pocket $4,350/$8,000)
IRA – $5,500S/$11,000MFJ; IF Participates in another plan Reduce/Phase-out Modified AGI 60-70/S 96-116/MFJ. Modified AGI Excludes Interest/Dividend/Annuity/Pension Income; Non-working spouse Phase-out $191K+;$1,000 additional if 55+ or blind
Roth ($5,500/$11,000 Reduce/Phase-out MAGI 114-129/S 181-191/MFJ); Keogh (Lesser of 25% self-employment net earnings or $52K);SEP/Simple
Coverdale Education IRA Non-Deductible, Tax-Free Distribution & earnings for Max Contribution $2K/year/beneficiary under 30 then Rollover to Family Free or withdraw with
Tuition & fees
Interest withdrawal penalty
Moving expenses – Distance to work is 50 miles in excess of previous distance; 23.5 Cents/Mile; Work 39 weeks of 12 months after move). If Self-Employed 78 weeks/24 Months; Include Travel/Lodging/Parking/Toll Exclude Meals/House-Hunt/Break Lease/Temp Living Expenses
Alimony paid
Self-employed health insurance – deduct 100%
Self-employed retirement – deduct 50% (FICA)
Domestic production activities deduction
One half self-employment FICA
Paid attorney fees–discrimination/whistle blower only
Educator expenses- ($2,500/Year Phase-out 65-80/S 130-160/MFJ)

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[jpowell31]

Schedule A – Itemized Deductions (greater when vs. Standard deduction of $6,300)
Medical & Dental subject to 10% AGI (7.5% if above 65y.o.) – when expenses are pai. Include premiums for medical/dental care, prescription drugs, travel & lodging, accommodation of handicap (NOT premium for life insurance, funeral expenses)

Taxes paid (income OR sales tax – see above – larger of the two), real estate, personal property (taxes that aren’t directly connected with a trade or business or with property held for the production of rents and royalties). Tax must be based on value of the car (personal prop example)(not on another mean).

Interest paid – home mortgage interest & points (form 1098), mortgage insurance premiums, investment interest (to purchase securities that generate income. excess expenses over income may carry-forward, not deductible). Points on a refinancing (not acquisition must be capitalized, not deducted) unless refinancing a second time, the points on the first refinance can be deducted.
Home acquisition debt (on first or second home), debt doesn’t exceed $1M debt. Home equity debt – debt doesn’t exceed net equity in the property (FMV – acquisition debt) or $100,000. If for business purpose, deduct on schedule C instead. Personal interest or on tax deficiency not deductible. Business & rental activity interest reported on schedule C or E.

Charitable contributions (not all tax-exempt entities) educational, religious, hospital, government, war vet, fraternal orders OK – deemed paid when charged to CC or check mailed (not pledged) – public: Cash FMV 50% AGI, STCG property lower basis or FMV 50%. LTCG FMV 30% (private – 30, 30, 20%). Excess carried forward 5 years.

Casualty & Theft losses – sudden, not deterioration year occurred/discovered – lower of adjusted basis or decline in FMV (when partial loss) excess of 10% AGI + $100 floor per event

Miscellaneous Itemized deductions subject to 2% AGI:
Unreimbursed business expenses (includes job search fees, Uniforms, protective clothes for work, safety), non-business tax prep fees. Appraisals to determine casualty losses, legal fees to collect income (alimony)
Subscriptions to professional journals, travel & transport.
Continuing education expenses
Non-interest investment expenses – safety deposit box rental, custodial fees, investment counsel, some investment taxes, subscriptions to investment publications
Fees for Wills NOT deductible

Miscellaneous Itemized deductions NOT subject to 2% AGI:
Gambling losses to extent of gambling winnings
Estate tax on income in respect of a decedent

Note: For higher-income taxpayers, the total amount of itemized deductions is reduced by 3% of the amount of the excess of adjusted gross income over the applicable amount of 80% of certain itemized deductions, whichever is lesser.

The following deductions are not subject to the phase-out: medical and dental expenses, investment interest expenses, casualty and theft losses from personal-use property, casualty and theft losses from income-producing property, and gambling losses.

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[jpowell31]

Schedule B – Interest and Dividend income – goes to 1040 Income
Interest (Include interest on Federal/Corporate bonds, bank accounts, late tax refund payments; Exclude qualified Series EE Savings Bonds which are acquired after 1989 and taxpayer over 24 using for higher education expenses for self, spouse, or dependents)

Dividends (Include portion of a corporation’s earning; Exclude amounts that are not earnings up to basis, any excess is capital gain; Qualified dividend are taxed at net capital gain rate)

Schedule C Business Income – goes to 1040 Income
(Deduct 50% of meals & entertainment expenses in excess of 2% of AGI; $25 Business Gift); loss – carry back 2, forward 20.

Schedule D – Capital Gains/Losses – goes to 1040 Income
(Dispositions/Gifts/Inherited LT Property)
Dispositions (Deduct $3K/ALL $1500/MFS; On Real/Personal Prop not used in business; Stocks/Securities, Partnership Int.); CARRY FORWARD INDEFINITELY
Amount Realized/Received=Cash Received + Cancelation of Debt + Property/Services at FMV
Adjusted Basis of Asset Sold=Cost + Improvements – Depreciation (Tax Dep)
Amount Realized-Basis = Capital Gain/Loss
Long-term capital gains taxed at 0/15% tax bracket,15/39.59,or 20/39.6+

Gifts – Cash or Property at donor’s Basis at date of sale; Disposition: Gain= sold above Donor Basis; Loss= sold Under FMV; No G/L between
Inherited Property is LT property (Basis=FMV at date of death or Election of lower valuation 6 months after death or sale value if alternate valuation selected and sold before)

G/L Exclusions, Deferrals, Disallowed HIDE IT
Homeowners Gain exclusion ($250k/500k MFS – live in 2 out of last 5 years, exclusion renewable every 2 years)
Involuntary conversion (destruction/theft/condemnation excluded up to reinvested amount. Un-invested amount = taxable boot. Personal reinvestment must occur within 2 years from YE. Business property within 3 years). Losses ARE recognized.
Divorce property settlement (basis rolls over)
Exchange of like-kind business/investment asset – basis = FMV received asset – deferred gain + deferred loss. Basis = old basis – boot received – loss recognized + gain recognized + boot paid. Gain/Loss deferred = G/L realized – G/L recognized. G/L recognized = lesser of gain realized or boot received.
Installment sale (recognize when cash received. GP/SP* cash received = gain recognized
Treasury and Capital Stock transactions

Non-Deductible/Disallowed Losses WRaP
Wash sale loss (securities re-purchased within 30 days before or after)
Related Party transaction loss (spouse, sibling, linear, entities >50%) – rollover basis (except when FMV lower at date of sale). Loss reduces gain when recipient sales later
Personal Loss – on nonbusiness disposal or loss (can itemize if deduction in casualty/theft)
Note: $3K max capital loss deduction, carry forward indefinitely.

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[jpowell31]

Schedule E – Supplemental Income & Loss
Rental real estate royalties, partnerships, S corporations, estates, trusts, REMICs
Passive Activity Income (No material participation; LP Interest/Rental Prop/S-Corps/Tax Shelters/Royalties/Partnership K-1 Passive Income)
Passive Losses only offset Passive Income; carry forward indefinitely; Deduct 100% when disposed
Mom & Pop rental activity; Deduct up to $25K/Year if participate & own 10%+ of Activity; Reduce 50% of Excess of $100K of AGI
K-1 Income/Loss
Miscellaneous (Unemployment Compensation/Prizes & Awards ($400 with no effort OK excluded)/Gambling Winnings, Deduct Losses up to Winnings)
Partially Taxable Income (SSI based on income level/Scholarship & Fellowships not used for Qualified Expenses)

Exclude From Income=Non-Taxable; (Life Insurance Proceeds/Gifts/Inheritance/Medicare Benefits/Workers’ Comp/Personal Physical Injury Awards (anything punitive i.e. beyond making whole = income))

Schedule F – Farming Income

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[jpowell31]

Personal Tax Credits (Reduce Tax Liability to Zero)
Adoption Credit; Once Final (AMT Offset; Not Spouse/Surrogate Child; $13,190/Child Phase-out $197,880-$237,880)
Child and Dependent Care Credit (35% reduced by 1%/$2K or fraction in excess of $15K AGI to a Min of 20% of Babysitter/Nursery School/Day Care/
Not Grammar School, $3K per person up to $6K on Qualifying Child Under 13, Disabled Dependent supported by 50%+, Disabled Spouse)
Education Credits (1st 4 Years, AMT Offset American Opportunity 100% of 1st $2K + 25% of next $2K of eligible expenses Including books/Per Student,
Phase-out $80-90K $160-180K; After 4 Years, Lifetime Learning Credit 20% up to $2K Excluding books/Per Tax Payer Phase-out $54-64K $108-128K)
*Coverdale Income Expenditures are NOT Eligible Expenses for Education Credits
Foreign Tax Credit (AMT Offset; Lesser of Foreign Taxes Paid; OR (Foreign Income/Total Income + Exemptions)x US Tax; Carryback 2 year, forward 10 years)
General Business Credit (100% of $25K then 75% on excess of Tentative Tax; Investment/Alcohol Fuels/Research/Low-Income Housing/Welfare-To-Work/Qualified Childcare Expenditures/Small Employer Pension Plan Start-Up Cost/Alternative Motor Vehicle) Carryback 1, carry forward 20
Elderly and Permanently Disabled Credit (65+ or Under 65 & Retired due to disability)
Formula: [(Base: $5K/S $7.5/MFJ $3,750/MFS)-.5(AGI excess of $7.5K/S $10K/MFJ $5K/MFS)-SSI-Pensions-Annuities]X.15
Retirement Savings Contribution Credit (AMT Offset; Max $2K; AGI $18K/S 50%, $19.5K 20%,$30K 10%, then Phase-out);MFJx2
Nonrefundable Credits: CELL GRAF
Child & dependent care credit
Elderly or disabled credit
Lifetime Learning Credit
Long-term unused minimum tax credit
General business credit
Retirement plan contribution credit
Adoption credit
Foreign tax credit

Refundable Credits: WE ACE (Reduce Tax Liability to Zero and Result in a Refund)
Withholding taxes (W-2) = Paycheck Credit
Earned income credit – AMT Offset; Age 25-65, MFJ, Live in US half the year) No Kids=7.65% of Income ,Excluding Portfolio/Passive/Capital Gain, up to $496; 1 Qualified “CARE” Child=34% up to $3,305; 2 CARE Children=40% up to $5,460; 3 or more Children= 45% up to $6,143
American Opportunity Credit – (40% Refundable, up to $1,000)
Child tax credit – AMT Offset; $1,000 per Resident/Citizen CARE child under 17) Phase-out Reduce by $50 per $1K exceeding $75K/S $110K/MFJ
Excess social security paid

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[Wannafree]

Ultimate ,Thanks a lot .Great contribution.Wow !

WannaB

[Wannafree]

Do u have similar stuff for Corp Tax ?

WannaB

[jpowell31]

no sorry. i found a couple copies of pages in becker that i've just added my handwritten notes to that i've almost formed a photograph in my memory of so don't want to ruin that by retyping (being a bit selfish there lol). also i find there's not as many nuances which I find make individual more difficult.

I am going to make a short summary of “basis” and distributions when contributing to or withdrawing/getting distributions from a partnership, s-corp and corporation in the next few days so can add that here when i do.

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[Wannafree]

Great look forward to your next update on Basis and distribution.

WannaB

[Jezzie]

jpowell31…you are the best!!!! Thank you so much for the study sheet 🙂

AUD - 87
BEC - 78
FAR - 76
REG - 79

I have officially completed this CPA journey!!!

FAR 2/23/16 76
AUD 5/13/16 69, 7/5/16 87
REG Nov 2016
BEC Sept 6

[Author]

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