Itemized deductions are taken when
They are higher than the standard deduction.
Personal living expenses.
Explanation:
These relate to such items as medical expenses, state and local taxes, personal casualty losses, and unreimbursed business expenses.
The majority of itemized deductions are:
10.0% of AGI.
Explanation:
Under the 2010 Health Care Reform Act, taxpayers under the age of 65 will not be able to deduct medical expenses until they exceed 10% of AGI beginning in 2013. For tax years 2013-2016, if either the taxpayer or the taxpayer's s
The threshold amount for the deductibility of allowable medical expenses ordinarily is:
$1,170.
Explanation:
$470 + $700 = $1,170
Deductible medical expenses are those that are doctor-directed and do not include optional treatments for the maintenance of general health and appearance. Personal expenditures that are not prescribed, such as he
During 2015, Jasmine incurred and paid the following expenses:
Prescription drugs $ 470
Vitamins and over-the-counter cold remedies 130
Doctors and dentist visits 700
Health club fee 250
Cosmetic surgery 2,400
What is the total amount of medical expenses
$915
Explanation:
$3,350 + $325 + $380 + $710 + $150 = $4,915 - $4,000 = $915
All the expenses listed above are deductible; however, the deduction for the long term care insurance premiums is limited by Cynthia's age.
For 2015, Cynthia, who is single and 45 years of age, had AGI of $40,000. During the year, she incurred and paid the following medical costs:
Doctor and dentist fees $ 3,350
Prescription medicines 325
Medical care insurance premiums 380
(paid for with aft
$2,800
Explanation:
$1,800 + $600 + $400 = $2,800
As the state personal property tax was based on the value of her vehicle, it is a tax and not a fee, and is allowable as a deduction
During 2015 Ella paid the following taxes related to her home:
Property taxes on residence (paid from escrow account) $ 1,800
State personal property tax on her automobile (based on value) 600
Property taxes on land held for long-term appreciation 400
Wha
Which of the following statements is not true regarding documentation requirements for charitable contributions?
A contribution charged to a credit card is a noncash contribution for purposes of documentation requirements.
A contribution charged to a credit card is considered a cash contribution.
It may be claimed in 2014 or 2015.
Explanation:
The Presidential declaration of a federal disaster area enables the taxpayer to deduct the loss either in the previous year, to provide a more immediate benefit, or in the current year.
In 2015, the President of the United States declared a federal disaster due to brush fires in the Southwest. Lisa lives in that area and lost her home in the fires. What choice does she have regarding when she can claim the loss on her tax return?
Explana
$15,000
Explanation:
$95,000 ? $80,000 = $15,000.
The lower of the basis of the property or the difference in the FMV before and after the event is used for determining the starting point for the calculation.
Explanation:
$95,000 ? $80,000 = $15,000.
The
In 2015, the Rinaldis' vacation cottage was severely damaged by an earthquake. They had AGI of $110,000 in 2015. Following is information related to the cottage:
Cost basis $ 95,000
FMV before casualty 135,000
FMV after casualty 20,000
The Rinaldis had in
Employee's unreimbursed business car expense.
Explanation:
Self-employed health insurance; Unreimbursed moving expenses; and Self-employment taxes are all for AGI, or above-the-line deductions and Employee's unreimbursed business car expense is a below-th
Which expense, incurred and paid in 2015, can be claimed as a miscellaneous itemized deduction subject to the 2% of AGI floor?
Explanation:
Self-employed health insurance; Unreimbursed moving expenses; and Self-employment taxes are all for AGI, or above-t
$6,400 of expenses subject to the 2% of AGI limitation.
Explanation:
As the amount of expenses exceeds the employer reimbursement, and the employer reimbursement is included in her wages, the total amount of expenses is deductible, subject the 2% of AGI f
Raquel, who works in medical sales, drives her own vehicle to various locations for client sales meetings. Her employer reimburses her $400 each month for various business expenses and does not expect Raquel to provide proof of her expenses. Her employer
Gambling losses.
Explanation:
Gambling losses are deductible to the extent of the "built-in limitation" of gambling winnings.
Which of the following itemized deductions is not subject to the 2% limit on the Schedule A?
All of the following would qualify as a deductible work or job-related expense:
1. A doctor incurring expenses related to studying to become certified as a plastic surgeon.
2. A CPA taking continuing education courses to be eligible to practice in another state.
3. A teacher taking courses to qualify for an educational administration
Number of miles to be used 6,240
Itemized deduction $1,435.2
Mickey is a 12-year-old dialysis patient. Three times a week for the entire year he and his mother, Sue, drive 20 miles one way to Mickey's dialysis clinic. On the way home, they go 10 miles out of their way to stop at Mickey's favorite restaurant. Their
No
Joe and Flo are married and have a combined AGI of $45,000 in year 2015. Due to certain medical problems, Joe has been prescribed Viagra� by a physician. For year 2015, Joe spent a total of $3,100 on the medication and $750 on doctor's bills. Can Joe dedu
Amount of interest deductible as an itemized deduction $2,100
Leslie and Jason paid the following expenses during 2015:
Interest on a car loan $ 100
Interest on lending institution loan
(used to purchase municipal bonds) 3,000
Interest on home mortgage
(Home mortgage principal is less than $1,000,000) 2,100
What is
State refund of $316 should be included in taxable income. correct
In 2014, Sherri, a single taxpayer, had $3,600 in state tax withheld from her paycheck. She properly deducted that amount on her 2014 tax return as an itemized deduction that she qualified for, thus reducing her tax liability. After filing her 2014 tax re
FALSE
Books purchased for courses at the campus bookstore, independent of tuition charges, are eligible expenses for the tuition and fees deduction.
Related expenses for books, supplies, and equipment are qualified expenses if the school requires the payment of
TRUE
Tuition, fees, books, supplies, room, board, and other necessary expenses of attendance are qualified education expenses for purposes of the student loan interest deduction.
FALSE
Student loan interest is deductible only by the person who actually attended the educational institution.
Only the person legally obligated to make the interest payments can take the deduction.
FALSE
The cost of self-employed health insurance premiums are deductible above-the line at a rate of 80% of the cost.
100% of self-employed health insurance premiums are deductible if certain conditions are met.
TRUE
Deductible moving expenses may include moving household goods and personal effects from the old residence to the new residence.
Moving expenses of persons other than the taxpayer are permitted if the other persons are members of the taxpayer's household a
TRUE
The student loan interest deduction may be limited based on the modified AGI of the taxpayer.
The deduction for interest on qualified education loans may be limited based on the modified Adjusted Gross Income of the taxpayer. There is a both a "floor" and
TRUE
The self-employed health insurance deduction is also available to a partner in a partnership and to a shareholder in a Subchapter S corporation who owns more than 2% of the stock in the corporation.
For at least one course
In order to be eligible for the qualified tuition and related expense deduction, a qualifying student must be enrolled:
Taxpayers must attach Form 8917 to their return when claiming this deduction.
net earnings of the business
The determination for the deduction of the self-employment tax is based upon the:
$850
In 2011 through 2015, Shannon borrowed a total of $35,000 for higher education expenses on qualified education loans while supporting herself with a full-time job. In 2015, she had modified adjusted gross income of $50,000. The first year interest on the
65
At the beginning of 2015, Melissa was permanently transferred from her office in New York City to New Jersey. Her office in NYC was 15 miles from her old NY home. For Melissa to meet the distance test for qualifying moving expense deductions, how many mil
$6,000
Rick and Lenora were granted a divorce in 2014. In accordance with the decree, Rick made the following payments to Lenora in 2015:
Child support payments contingent on the age of the child $4,000
Annual cash payments other than child support 6,000
How muc
Years 1 through 3.
The goal of the alimony recapture rules is to properly define the substance of payments made to a former spouse in order to ensure proper tax treatment. These rules "lookback" to the following years for the calculation:
The recapture rules relate to the c
$6,300
Jena is a self-employed fitness trainer who had net earnings from self-employment of $23,500. She paid $525 per month for health insurance over the entire last year. Jena is entitled to a for AGI deduction for health insurance of:
$525 ? 12 = $6,300, < $2
Which of the following items are considered alimony?
Payments made to a third party on behalf of the former spouse for the former spouse's dental expenses.
Form SE
The self-employment tax is calculated on:
$2,100
Rena had the following moving expenses during 2015:
Cost of packing and transporting her household goods $1,500
Lodging for travel between the old home and new home $600
Meals incurred during the trip $175
Rena moved to start a new job and met all the req
All of the following are requirements for a payment to be considered alimony except,
Payments can either be in cash or property.
To qualify as alimony, a payment must be cash and must be required under the provisions of a decree of divorce or separate maintenance agreement.
Pre-move house hunting expenses.
Which of the following is not deductible as a moving expense?
Only the cost of moving "me and my stuff", excluding meals, is deductible as a moving expense.
Due to the phase-out rules, only a portion of the $1,200 will be deductible.
In 2014, Robert, who is single, received his Bachelor's degree and started working. In 2015, he began paying interest on qualified education loans and had modified AGI of $70,000. He paid interest of $1,200 in 2015. Which of the following statements is co
FALSE
Qualifying moving expenses are treated as an itemized deduction for 2015.
Qualified moving expenses are an "above the line" deduction.
TRUE
Self-employed persons are allowed a for AGI deduction equal to one-half of the self-employment tax imposed.
$13,000
The Oroscos were granted a decree of divorce effective January 1, 2015. In accordance with the decree, C�sar Orosco is to pay his wife $24,000 a year until their only child, Ricardo now 11, turns 18, and then the payments will decrease by $11,000 per year
Home improvements to sell his home in Oregon.
Peter, having moved from Oregon to Florida in the current year, met all the requirements to deduct moving expenses. Which of the following expenses that he incurred is not deductible as qualified moving expenses?
Nonqualified moving expenses generally inc
Which of the following is deductible as a moving expense?
The cost of moving household goods
Only the cost of moving "me and my stuff", excluding meals, is deductible as a moving expense.
$2,500
The maximum amount of the deduction for student loan interest for an eligible taxpayer is limited in the 2015 tax year to:
The deduction is limited to $2,500 per year.
$3,420
Sade, who is single and self-employed as a graphic artist, had net earnings from self-employment of $7,250 for the year. She paid $285 a month for health insurance premiums over the last year. Sade is entitled to a for AGI deduction for health insurance o
Which of the following is not deductible as a moving expense?
Pre-move house hunting expenses.
Only the cost of moving "me and my stuff", excluding meals, is deductible as a moving expense.
1098-E
Student Loan interest is reported on Form:
A student who is claimed as a dependent on another return
Taxpayer eligible to take the student loan interest deduction do NOT include:
$0
In 2011 through 2014, Korey, who is single, borrowed a total of $25,000 for higher education expenses on qualified education loans. In 2015, while still living at home and being claimed by his parents as a dependent, he began making payments on the loan.
To be eligible to deduct moving expenses, a taxpayer:
Must meet all three of the change of job location, time, and distance tests.
Deductible expenses for moving do not include:
Meals incurred during the move.
To meet the distance test, the new job location must be:
At least 50 miles farther than the old residence was from the old job location.
The deduction for half of the self-employment tax is:
Based on the net earnings of the business.
100%.
As a for AGI deduction, self-employed health insurance premiums are deductible at:
$3,500.00
Rick is a self-employed carpenter who had net earnings from self-employment of $3,500. He paid $325 per month for health insurance over the last year. Rick is entitled to a for AGI deduction for health insurance of:
$600.00
Roger is required under a 2014 divorce decree to pay $600 of alimony and $300 of child support per month for 12 years. In addition, Roger makes a voluntary payment of $100 per month. How much of each total monthly payment can Roger deduct in 2015?
$14,000.00
The Renfros were granted a decree of divorce in 2014. In accordance with the decree, Josh Renfro is to pay his ex-wife $24,000 a year until their only child, Evelyn, now 10, turns 18, and then the payments will decrease to $14,000 per year. For 2015, much
$0
At the beginning of June 2015, Julia left her husband and is currently living in an apartment. The couple has no children. At the end of the current year, no formal proceedings have occurred in relation to the separation or potential divorce. Julia has be
$4,500
Fabian, a single account executive, was employed and resided in New Mexico. On July 1, 2015, his company transferred him to Florida. Fabian worked full-time for the entire year. During 2015, he incurred and paid the following expenses related to the move:
Indicate whether each of the following items is considered a for AGI, (above-the-line) deduction for the 2015 tax year.
a. Student loan interest.
c. Early withdrawal penalty.
f. One-half of self-employment taxes.
g. Alimony.
i. Moving expenses.
k. Self-employed health insurance premiums.
Itemized deductions are taken when:
They are higher than the standard deduction.
the majority of itemized deductions are:
Personal living expenses
Explaination: these relate to such items as medical expenses, state & local taxes, personal casualty losses, and unreimbursed business expenses
Threshold amount for the deductibility of allow medical expenses ordinarily
10.0% of AGI
Explaination: Under the 2010 Health Care Reform Act, taxpayers under the age of 65 will not be able to deduct medical expenses until they exceed 10% of AGI beginning in 2013. For tax years 2013-2016, if either the taxpayer or the taxpayer's s
During 2015, Jasmine incurred and paid the following expenses:
Prescription drugs $ 470
Vitamins and over-the-counter cold remedies 130
Doctors and dentist visits 700
Health club fee 250
Cosmetic surgery 2,400
What is the total amount of medical expenses
$1170.00
Explanation:
$470 + $700 = $1,170
Deductible medical expenses are those that are doctor-directed and do not include optional treatments for the maintenance of general health and appearance. Personal expenditures that are not prescribed, such as h
For 2015, Cynthia, who is single and 45 years of age, had AGI of $40,000. During the year, she incurred and paid the following medical costs:
Doctor and dentist fees $ 3,350
Prescription medicines 325
Medical care insurance premiums 380
(paid for with aft
$915.00
Explanation:
$3,350 + $325 + $380 + $710 + $150 = $4,915 - $4,000 = $915
All the expenses listed above are deductible; however, the deduction for the long term care insurance premiums is limited by Cynthia's age.
During 2015 Ella paid the following taxes related to her home:
Property taxes on residence (paid from escrow account) $ 1,800
State personal property tax on her automobile (based on value) 600
Property taxes on land held for long-term appreciation 400
Wha
$2800.00
Explanation:
$1,800 + $600 + $400 = $2,800
As the state personal property tax was based on the value of her vehicle, it is a tax and not a fee, and is allowable as a deduction.
Which of the following statements is not true regarding documentation requirements for charitable contributions?
A contribution charged to a credit card is a noncash contribution for purposes of documentation requirements.
Explanation:
A contribution charged to a credit card is considered a cash contribution.
In 2015, the President of the United States declared a federal disaster due to brush fires in the Southwest. Lisa lives in that area and lost her home in the fires. What choice does she have regarding when she can claim the loss on her tax return?
It may be claimed in 2014 or 2015
Explanation:
The Presidential declaration of a federal disaster area enables the taxpayer to deduct the loss either in the previous year, to provide a more immediate benefit, or in the current year.
In 2015, the Rinaldis' vacation cottage was severely damaged by an earthquake. They had AGI of $110,000 in 2015. Following is information related to the cottage:
Cost basis $ 95,000
FMV before casualty 135,000
FMV after casualty 20,000
The Rinaldis had in
$15,000.00
Explanation:
$95,000 ? $80,000 = $15,000.
The lower of the basis of the property or the difference in the FMV before and after the event is used for determining the starting point for the calculation.
Which expense, incurred and paid in 2015, can be claimed as a miscellaneous itemized deduction subject to the 2% of AGI floor?
Employee's unreimbursed business car expense
Explanation:
Self-employed health insurance; Unreimbursed moving expenses; and Self-employment taxes are all for AGI, or above-the-line deductions and Employee's unreimbursed business car expense is a below-the
Raquel, who works in medical sales, drives her own vehicle to various locations for client sales meetings. Her employer reimburses her $400 each month for various business expenses and does not expect Raquel to provide proof of her expenses. Her employer
$6,400 of expenses subject to the 2% of AGI limitation
Explanation:
As the amount of expenses exceeds the employer reimbursement, and the employer reimbursement is included in her wages, the total amount of expenses is deductible, subject the 2% of AGI fl
Which of the following itemized deductions is not subject to the 2% limit on the Schedule A?
Gambling losses
Gambling losses are deductible to the extent of the "built-in limitation" of gambling winnings.
All of the following would qualify as a deductible work or job-related expense except:
An accountant taking a CPA exam review course.
Explanation:
The accountant taking the CPA exam would be considered someone training to enter another field and therefore would not be deductible.
Mickey is a 12-year-old dialysis patient. Three times a week for the entire year he and his mother, Sue, drive 20 miles one way to Mickey's dialysis clinic. On the way home, they go 10 miles out of their way to stop at Mickey's favorite restaurant. Their
Number of miles to be used 6,240
Itemized deduction $1,435.20
Joe and Flo are married and have a combined AGI of $45,000 in year 2015. Due to certain medical problems, Joe has been prescribed Viagra� by a physician. For year 2015, Joe spent a total of $3,100 on the medication and $750 on doctor's bills. Can Joe dedu
No
Leslie and Jason paid the following expenses during 2015:
Interest on a car loan $ 100
Interest on lending institution loan
(used to purchase municipal bonds) 3,000
Interest on home mortgage
(Home mortgage principal is less than $1,000,000) 2,100
What is
Amount of interest deductible as an itemized deduction $2,100
In 2014, Sherri, a single taxpayer, had $3,600 in state tax withheld from her paycheck. She properly deducted that amount on her 2014 tax return as an itemized deduction that she qualified for, thus reducing her tax liability. After filing her 2014 tax re
State refund of $316 should be included in taxable income.