Income Tax: Class Notes
1, 8, 12, 19, 22, 23, 37, 38
3-1:
b. Income
g. Less: Exclusions
f. Gross Income
a. Less: Deductions for adjusted gross income
d. Adjusted gross income
h. Less: The greater of— Total itemized deductions or standard deduction
e. Less: Personal and dependency exemptions
c. Taxable Income
3-8:
In choosing between the standard deduction and itemizing deductions from AGI, what effect, if any, does each of the following variables have?
a. The age of the taxpayer(s). If over the age of 65, a person is allowed the additional standard deduction amount on his or her own return.
b. The health (i.e., physical condition) of the taxpayer(s). If blind, a person is allowed the additional standard deduction amount on his or her own return.
c. Whether the taxpayer(s) rent or own their personal residence.
d. Taxpayer’s filing status (e.g., single; married, filing jointly). The standard deduction depends on the filing status of the taxpayer, and thus differs in amount for each type of filing status.
e. Whether married taxpayers decide to file separate returns. A married individual filing a separate return must itemize deductions.
f. The taxpayer’s uninsured personal residence that recently was destroyed by fire. Could be an itemized deduction under the casualty and theft losses section, if the loss exceeded 10%. You have to account for the increase in effective tax rate.
g. The number of personal and dependency exemptions the taxpayer(s) can claim. A dependent’s basic standard deduction for 2013 is limited to the greater of $1000 or the sum of the individual’s earned income plus $350 exceeds the standard deduction.
3-12: She can be claimed as a dependent, but the standard deduction is limited to the greater of $1000 or the sum of the individuals earned income for the year plus $350. However, if the sum of the individual’s earned income plus $350 exceeds the standard deduction, which it does in this case, the standard deduction is
3-1:
b. Income
g. Less: Exclusions
f. Gross Income
a. Less: Deductions for adjusted gross income
d. Adjusted gross income
h. Less: The greater of— Total itemized deductions or standard deduction
e. Less: Personal and dependency exemptions
c. Taxable Income
3-8:
In choosing between the standard deduction and itemizing deductions from AGI, what effect, if any, does each of the following variables have?
a. The age of the taxpayer(s). If over the age of 65, a person is allowed the additional standard deduction amount on his or her own return.
b. The health (i.e., physical condition) of the taxpayer(s). If blind, a person is allowed the additional standard deduction amount on his or her own return.
c. Whether the taxpayer(s) rent or own their personal residence.
d. Taxpayer’s filing status (e.g., single; married, filing jointly). The standard deduction depends on the filing status of the taxpayer, and thus differs in amount for each type of filing status.
e. Whether married taxpayers decide to file separate returns. A married individual filing a separate return must itemize deductions.
f. The taxpayer’s uninsured personal residence that recently was destroyed by fire. Could be an itemized deduction under the casualty and theft losses section, if the loss exceeded 10%. You have to account for the increase in effective tax rate.
g. The number of personal and dependency exemptions the taxpayer(s) can claim. A dependent’s basic standard deduction for 2013 is limited to the greater of $1000 or the sum of the individual’s earned income plus $350 exceeds the standard deduction.
3-12: She can be claimed as a dependent, but the standard deduction is limited to the greater of $1000 or the sum of the individuals earned income for the year plus $350. However, if the sum of the individual’s earned income plus $350 exceeds the standard deduction, which it does in this case, the standard deduction is