Becker CPA – REG R1 Federal Taxation of Individuals Summary and Practice Material
M1-Individual |taxation |formula(1040) |- |answersGross |Income
<Adjustments>
---------------------
Adjusted |Gross |Income
<Standard |Deduction |OR |Itemized |Deductions>
<Exemptions>
---------------------
Taxable |Income |B4 |QBI |Deduction
| <QBI |Deduction>up |to |20 |percent |for |only |Pass |thru |entities
_______________________________
TAXABLE |INCOME
Federal |Inc |Tax(regular |or |alternative |minimum |tax)
<Tax |Credits>
Other |Taxes(soc |sec/self |employment)
<Payments>
-------------------
Tax |Due |OR |Refund
Gross |Income |Items |- |answerswages
interest |inc
dividends
state |tax |refunds
alimony |received(cannot |include |if |divorced |after |12/31/18) |
business |income
capital |gain/loss
IRA |income
,pension/annuity
rental |income/loss
k-1 |income/loss(partnership/llc)
unemployment |compensation
social |security |benefits
other |income
Adjustment |items |- |answersEducator |expenses
IRA
Student |loan |interest |expenses
tuition |and |fee |deduction
health |savings |account
moving |expenses(Only |Military |moving)
one |half |self |employment |FICA
Self-employed |health |insurance
self-employed |retirement
interest |withdrawal |penalty
alimony |Paid(cannot |deduct |if |divorced |after |12/31/18
Itemized |deduction |items |(I.D) |- |answersMedical |(in |excess |of |7.5% |of |AGI)
taxes |- |state/local |(income, |sales |& |property |up |to |$1000)
interest |expense |(home |and |investment)
charity |(up |to |60% |of |AGI)
casualty/theft |attributable |to |federal |disaster |(in |excess |of |10% |of |AGI)
**You |can |opt |for |Std |Deduction( |form |1040EZ) |instead |of |I.D
Who |must |file? |- |answersGeneral |Rule:
Income |is |equal |to |or |greater |than:
-the |regular |standard |deduction |(except |for |married |filing |separately), |plus
-the |additional |standard |deduction |for |taxpayers |65+ |or |blind |(except |for |married |filing |separately)
, Exceptions:
-individuals |with |net |earnings |from |self |employment |are |$400 |or |more
-individuals |who |can |be |claimed |as |dependents |with: |unearned |income |of |more |than |$1050, |earned |
income |of |more |than |$6300, |or |total |income |which |exceeds |the |larger |of |$1000 |or |earned |income |
plus |$350
When |to |file |(individual |taxpayers) |- |answersApril |15
Extension |for |individual |tax |payers |- |answersOctober |15, |BUT |payments |must |be |MADE(must |file |form
|4868 |by |April |15)
Taxpayers |out |of |the |country |get |automatic |two-month |extension |(no |filing |required |for |extension)
Filing |Status: |Single |- |answersany |taxpayer |that |does |not |qualify |for |another |filing |class |must |use |the |
single |status |by |default
1. |single |at |yearend
2. |legally |separated
End-of-Year |Test |- |answersDecember |31st |decides |the |filing |status
Filing |status: |Joint |Return |- |answersparties |must |be |married |at |the |end |of |the |year, |living |together |in |
a |recognized |commonlaw |marriage, |or |married |living |apart |(but |not |legally |separated)
*if |one |spouse |dies |during |the |year, |a |joint |return |may |be |filed
Filing |status: |Married |filing |separately |- |answersTaxpayers |are |legally |married |as |of |the |last |day |of |the
|year. |Generally |no |tax |advantage |to |filing |separately |(usually |a |disadvantage). |Each |spouse |is |
ultimately |responsible |for |paying |own |tax. |Couples |may |choose |to |file |separately |(generally |for |non-
tax |reasons)
Filing |status: |Qualifying |Widow(er) |(Surviving |Spouse) |with |Dependent |Child |- |answersmay |use |the |
joint |tax |return |std |deduction |& |rates |
| unless |remarries;
1. |two |years |after |spouse's |death |
2. |Principle |residence |for |dependent |child |for |the |whole |taxable |year |& |Must |provide |half |of |the |cost |
of |maintaining |household |for |the |child |or |stepchild
Filing |status: |Head |of |Household(i.e |divorced |mum) |- |answersentitles |certain |taxpayers |to |pay |lower |
taxes, |to |qualify |the |following |conditions |must |be |met:
1. |individual |is |not |married
M1-Individual |taxation |formula(1040) |- |answersGross |Income
<Adjustments>
---------------------
Adjusted |Gross |Income
<Standard |Deduction |OR |Itemized |Deductions>
<Exemptions>
---------------------
Taxable |Income |B4 |QBI |Deduction
| <QBI |Deduction>up |to |20 |percent |for |only |Pass |thru |entities
_______________________________
TAXABLE |INCOME
Federal |Inc |Tax(regular |or |alternative |minimum |tax)
<Tax |Credits>
Other |Taxes(soc |sec/self |employment)
<Payments>
-------------------
Tax |Due |OR |Refund
Gross |Income |Items |- |answerswages
interest |inc
dividends
state |tax |refunds
alimony |received(cannot |include |if |divorced |after |12/31/18) |
business |income
capital |gain/loss
IRA |income
,pension/annuity
rental |income/loss
k-1 |income/loss(partnership/llc)
unemployment |compensation
social |security |benefits
other |income
Adjustment |items |- |answersEducator |expenses
IRA
Student |loan |interest |expenses
tuition |and |fee |deduction
health |savings |account
moving |expenses(Only |Military |moving)
one |half |self |employment |FICA
Self-employed |health |insurance
self-employed |retirement
interest |withdrawal |penalty
alimony |Paid(cannot |deduct |if |divorced |after |12/31/18
Itemized |deduction |items |(I.D) |- |answersMedical |(in |excess |of |7.5% |of |AGI)
taxes |- |state/local |(income, |sales |& |property |up |to |$1000)
interest |expense |(home |and |investment)
charity |(up |to |60% |of |AGI)
casualty/theft |attributable |to |federal |disaster |(in |excess |of |10% |of |AGI)
**You |can |opt |for |Std |Deduction( |form |1040EZ) |instead |of |I.D
Who |must |file? |- |answersGeneral |Rule:
Income |is |equal |to |or |greater |than:
-the |regular |standard |deduction |(except |for |married |filing |separately), |plus
-the |additional |standard |deduction |for |taxpayers |65+ |or |blind |(except |for |married |filing |separately)
, Exceptions:
-individuals |with |net |earnings |from |self |employment |are |$400 |or |more
-individuals |who |can |be |claimed |as |dependents |with: |unearned |income |of |more |than |$1050, |earned |
income |of |more |than |$6300, |or |total |income |which |exceeds |the |larger |of |$1000 |or |earned |income |
plus |$350
When |to |file |(individual |taxpayers) |- |answersApril |15
Extension |for |individual |tax |payers |- |answersOctober |15, |BUT |payments |must |be |MADE(must |file |form
|4868 |by |April |15)
Taxpayers |out |of |the |country |get |automatic |two-month |extension |(no |filing |required |for |extension)
Filing |Status: |Single |- |answersany |taxpayer |that |does |not |qualify |for |another |filing |class |must |use |the |
single |status |by |default
1. |single |at |yearend
2. |legally |separated
End-of-Year |Test |- |answersDecember |31st |decides |the |filing |status
Filing |status: |Joint |Return |- |answersparties |must |be |married |at |the |end |of |the |year, |living |together |in |
a |recognized |commonlaw |marriage, |or |married |living |apart |(but |not |legally |separated)
*if |one |spouse |dies |during |the |year, |a |joint |return |may |be |filed
Filing |status: |Married |filing |separately |- |answersTaxpayers |are |legally |married |as |of |the |last |day |of |the
|year. |Generally |no |tax |advantage |to |filing |separately |(usually |a |disadvantage). |Each |spouse |is |
ultimately |responsible |for |paying |own |tax. |Couples |may |choose |to |file |separately |(generally |for |non-
tax |reasons)
Filing |status: |Qualifying |Widow(er) |(Surviving |Spouse) |with |Dependent |Child |- |answersmay |use |the |
joint |tax |return |std |deduction |& |rates |
| unless |remarries;
1. |two |years |after |spouse's |death |
2. |Principle |residence |for |dependent |child |for |the |whole |taxable |year |& |Must |provide |half |of |the |cost |
of |maintaining |household |for |the |child |or |stepchild
Filing |status: |Head |of |Household(i.e |divorced |mum) |- |answersentitles |certain |taxpayers |to |pay |lower |
taxes, |to |qualify |the |following |conditions |must |be |met:
1. |individual |is |not |married
