{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 18 - Deductions for Individuals Only without Homework

Chapter 18 - Deductions for Individuals Only without Homework

Info iconThis preview shows pages 1–13. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 18 – Deductions for Individuals Only §62 – Definition of “Adjusted Gross Income” There is no similar concept in corporate taxation as AGI.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Adjusted Gross Income Why is AGI Important? It helps us determine at least the following: Charitable contributions limitations §469 Rental real estate limits Medical deductions Miscellaneous itemized deductions Phase-out of itemized deductions Phase-out of personal exemptions Taxation of Social Security benefits Others
Background image of page 2
Adjusted Gross Income What is AGI: Gross Income Less: Deductions for AGI, which include: Moving Expenses IRA deductions Other retirement deductions Health care insurance costs for self-employed Certain qualified education expenses Others
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Adjusted Gross Income §62 defines adjusted gross income as gross income less the deductions specified in §62. Only the deductions noted in §62 are deductions FOR AGI. If the deductions are not mentioned in this section, they must end up being itemized deductions.
Background image of page 4
Adjusted Gross Income Since we have already studied these expenses, I will be skipping the Moving expense and qualified tuition sections tonight, and they will NOT be included in the final exam as they were concepts we studied for the mid-term. Move right into the Itemized Deductions portion
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Itemized Deductions
Background image of page 6
Itemized Deductions What are itemized Deductions? Generally, they are deductions allowed to individuals due to Congressional “grace” to encourage certain behaviors or stimulate certain industries or put employed individuals on a somewhat equal footing with self-employed people.
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Itemized Deductions The major categories of itemized deductions: Medical expenses (7.5% floor based on AGI) State and Local Taxes Interest Expense Charitable Contributions (with limitations based on AGI) Casualty and Theft Losses Miscellaneous Deductions
Background image of page 8
Itemized Deductions We have already discussed: State and Local Taxes Interest Expense So today we will first focus on: Medical Expenses Miscellaneous Deductions
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Other Deductions Personal Exemptions Standard Deductions
Background image of page 10
Medical Expenses 213. Medical, dental, etc., expenses (a) Allowance of deduction There shall be allowed as a deduction the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent (as defined in section 152 determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof), to the extent that such expenses exceed 7.5 percent of adjusted gross income. (b) Limitation with respect to medicine and drugs An amount paid during the taxable year for medicine or a drug shall be taken into account under subsection (a) only if such medicine or drug is a prescribed drug or is insulin.
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Medical Expenses (d) Definitions For purposes of this section— (1) The term “medical care” means amounts paid (A)
Background image of page 12
Image of page 13
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}