Group Project - Group 4[1]FINAL - Introduction to...

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Introduction to Deductions Group 4: Sharon Montano Judith Moore Claudia Perez Francesca Wildman Colorado Technical University Online Debra Latimore ACC455-0904B-01 December 18, 2009
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Topics Filing Status Exemptions vs. Deductions vs. Credits Types of Deductions Standard Deduction vs. Itemizing Standard Deduction Itemized Deductions (Schedule A) Which Form to File Amending Prior Returns Credits Specifically, credits pertaining to children & earned income tax credit Military Tax Tips
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Filing Status Single Highest Tax Rate of Unmarried Married Filing Jointly Lowest Tax Rate Married Filing Separately Highest Tax Rate Head of Household Intermediate Tax Rate Surviving Spouse Same as Married Filing Jointly
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Exemptions vs. Deductions vs. Credits Exemptions Reduce taxable income One exemption each for yourself, spouse, & dependent(s) Personal exemptions are decreased at higher income levels Deductions Also reduce taxable income “Above the line” and “below the line” Related to expenses Credits Reduce your tax liability Refundable credits can reduce liability below $0, resulting in a refund
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Types of Deductions Deductions FOR AGI (“above the line” deductions) Reduce gross income to get to adjusted gross income Examples: Educator expenses Student Loan Interest Tuition Alimony Deductions FROM AGI (“below the line” deductions) Reduce taxable income Standard or itemized
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Education Expenses (Deductions) Tuition and Fees Scholarships, Fellowships, Grants, Tuition Deductions Student Loan Interest Other Education Deductions Coverdell Qualified Tuition Programs IRA Education Savings Bonds Employer Provided Education Assistance
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Education Expenses (Credits) Hope Education and Lifetime Learning Credits Personal Program Career Oriented Program Limits 1st and 2nd year of college-Hope $1800 Hope $2000 Lifetime Tuition and Required Enrollment Fees Phase Out levels of income Each student may only take one
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Employment Expenses Educator Expenses- up to $250 of unreimbursed expenses for K-12 teachers, instructors, counselors, aides and principals Unreimbursed Employment Expenses Employment Related Travel Moving Expenses (related to employment)- distance test, time test Employment Search Expenses IRA Accounts
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Standard Deduction vs. Itemizing Itemizing is recommended when . . . Total deductions exceed standard deduction
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Group Project - Group 4[1]FINAL - Introduction to...

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