lesson 4
DESCRIPTION
Lesson 4. Deductions and Tax Computations. OBJECTIVES. Identify the correct standard deduction. Calculate and accurately report itemized deductions on Schedule A. Identify the miscellaneous deductions reported on Schedule A, lines 22 through 22 that are subject to the 2% AGI limitation. - PowerPoint PPT PresentationTRANSCRIPT
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Lesson 4
Deductions andTax Computations
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OBJECTIVES
• Identify the correct standard deduction.• Calculate and accurately report itemized
deductions on Schedule A.• Identify the miscellaneous deductions
reported on Schedule A, lines 22 through 22 that are subject to the 2% AGI limitation.
• Complete the Qualified Dividends and Capital Gain Tax Worksheet.
• Explain the process to calculate and report tax liability.
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Intake/Interview Process
Form 13614 – Intake and Interview Sheet – Credits Section
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Standard Deduction
• Based on the following factors:– Filing Status– Dependency Status– Blindness– Age
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Taxable Income Computation
• Taxable income less than $100,000
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Itemized Deductions
• Standard Deduction vs Itemized Deductions
• When MFS taxpayer must itemize deductions
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Medical Expenses
• Whose expenses• What expenses
– Deductible– Nondeductible
• Long-Term Care Premiums
• New tax law– Medical standard mileage rate
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Taxes
• State and Local Income Taxes • Real Estate Tax• Personal Property Tax
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Interest
• Home Mortgage• Points• Investment
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Contributions
• Recipient• Deductible • Nondeductible
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Miscellaneous Deductions on
Schedule A• Expenses subject to the 2% Adjusted
Gross Income (AGI) limitation vs. expenses not subject to the 2% AGI limitation
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Total Itemized Deductions
• Work Exercise 6
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Taxable Income Computation
• Taxable income less than $100,000
• Qualified Dividends and Capital Gain Tax Worksheet
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Quality Review (QR)
Form 8158 – Quality Review Checklist
Adjustments, Deductions, and Credits Section
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Lesson Summary
• Standard Deduction or Itemized• Medical Expenses, Taxes, Interest,
Contributions, Miscellaneous Deductions
• Tax Charts• Qualified Dividends and Capital
Gains worksheet
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Travel Expenses
• Fully reimbursed• Accountable Plan• Adequate records• Form 2106
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Deductible Expenses
• Away from home• Local travel• Meals• Reimbursable Expenses
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Reservists
• Temporary Active Duty• More than 100 miles• Form 2106
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Other Miscellaneous Deductions
• Worn off-duty?• Uniform allowances• Insignia of rank, corps devices,
epaulets, aiguillettes, and swords• Professional society dues
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Educational Expenses
• Qualifications• Deductible Expenses• Education Credits
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Business Travel Expenses
• Travel Expenses• Deductible Expenses
– Car, Meal, Home Leave
• How To Report• Form 2106• Foreign Earned Income Exclusion
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Military/International Summary
• Travel Expenses• Uniforms• Professional dues• Education• Home Leave