Chapter 10 - CHAPTER 10 CHAPTER 10 Itemized Deductions...

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Unformatted text preview: CHAPTER 10 CHAPTER 10 Itemized Deductions Reported on Schedule A Medical Expenses Medical Expenses Ordinary & Necessary Capital Expenditures – Diagnosis, cure, treatment, prevention, insurance – Requires prescribed medical care – Only deductible if cost exceeds increase in value to property Transportation­Out­Of­Pocket Costs & Mileage @ 16.5¢/ mi Meals – Actual costs at Location (not in transit) Lodging – Limited to $50/night/person Insurance Reimbursements Reduce Deduction Nursing Home Care Allowed Tuition for Special Schools (if specific program provided) Taxes Taxes Property Tax (Real & Personal) State and Local Income Tax (Actual Liability) Refunds are added to Income in Subsequent Year State Sales Taxes – (Only If Greater Than State Income Taxes from above) Interest Interest Home Mortgage (1st mortgage) – fully deductible Home Equity – up to $100,000 loan Investment Interest – up to amount of investment income Education (Student) Loans – Deduction is For AGI Personal Interest – Not Deductible – Credit cards, auto loans, etc. – Points paid to refinance a loan must be amortized Charitable Contributions Charitable Contributions Only Contributions to “Qualified Charities” Limitations – < 20% of AGI then fully deductible – >20% of AGI; then additional rules apply Capital Gain Property (investment capital assets) Deductible to Extent of FMV on date of gift Gain is Not Taxable Deductions for Autos is limited to the amount received by charitable organization upon sale Record­Keeping Requirements (keep a record!) – Gifts > $250 must include written receipt from charity Casualty & Theft Losses Casualty & Theft Losses Sudden & Unexpected Loss of Asset Usually resulting from Storm/Fire/etc. Losses from Personal Use Capital Assets Subject to $100 Per Event Reduction and; Limited to the Excess of 10% of AGI Unreimbursed employee expenses Professional Fees Job Hunting Expenses Hobby Losses Up To Hobby Income Education Expenses (maintain/improve skills) Tax Preparation and Tax Advice Fees Safe Deposit Box Rental Uniforms (not regularly worn in public) Miscellaneous Miscellaneous Itemized Deductions ...
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This note was uploaded on 12/04/2010 for the course ACCT 3200 taught by Professor Martin during the Fall '08 term at Kennesaw.

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