Ch05 - Chapter 5 Gross Income Exclusions 2011 CCH. All...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 5 Gross Income Exclusions ©2011 CCH. All Rights Reserved. 4025 W. Peterson Ave. Chicago, IL 60646-6085 1 800 248 3248 www.CCHGroup.com
Background image of page 1

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

View Full DocumentRight Arrow Icon
Chapter 5 Exhibits 1. Social Security Benefits 2. Interest on U.S. Savings Bonds 3. EE Bonds Used for Education 4. Fringe Benefits 5. Group Life Insurance 6. Annuities 7. Compensation for Injuries and Sickness 8. Insurance Reimbursement Summary 9. Damage Awards CCH Federal Taxation Basic Principles 2 of 34 Chapter 5, Exhibit Contents A
Background image of page 2
Chapter 5 Exhibits 10. Cafeteria Plans 11. Adoption Assistance 12. Employee Tuition Reduction Plans 13. Dependent Care Assistance Program CCH Federal Taxation Basic Principles 3 of 34 Chapter 5, Exhibit Contents B
Background image of page 3

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

View Full DocumentRight Arrow Icon
Social Security Benefits A portion of Social Security income is taxable to the extent that a taxpayer’s provisional income exceeds certain base amounts. Provisional income equals adjusted gross income, plus one-half of Social Security received, plus some non-taxable items such as tax exempt interest. CCH Federal Taxation Basic Principles 4 of 34 Chapter 5, Exhibit 1a
Background image of page 4
Social Security Benefits 1 st threshold base amounts - $25,000 for single - $32,000 for married filing jointly If a taxpayer’s provisional income exceeds the 1 st threshold (but does not exceed the 2 nd threshold), the taxable portion of Social Security is the lesser of: A. 50% of Social Security benefits or B. 50% of the excess of the taxpayer’s provisional income over the base. CCH Federal Taxation Basic Principles 5 of 34 Chapter 5, Exhibit 1b
Background image of page 5

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

View Full DocumentRight Arrow Icon
Social Security Benefits 2nd threshold base amounts - $34,000 for single - $44,000 for married filing jointly If a taxpayer’s provisional income exceeds the 2 nd threshold, the taxable portion of Social Security is the lesser of: A. 85% of Social Security benefits OR B. 85% of the amount that provisional income exceeds the threshold plus the smaller of (1) the amount of SS benefits included under the prior law or (2) $4,500 for unmarried taxpayers or $6,000 for married filing jointly. CCH Federal Taxation Basic Principles 6 of 34 Chapter 5, Exhibit 1c
Background image of page 6
Social Security Benefits Married taxpayers filing separately have no base amount and must include in gross income the lesser of A. 85% of Social Security benefits OR B. 85% of their provisional income CCH Federal Taxation Basic Principles 7 of 34 Chapter 5, Exhibit 1d
Background image of page 7

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

View Full DocumentRight Arrow Icon
Interest on U.S. Savings Bonds The general rule is that interest on U.S. savings bonds is fully taxable . Cash basis taxpayers may report interest income on a yearly basis or defer the recognition of interest income until the bonds mature. CCH Federal Taxation Basic Principles 8 of 34 Chapter 5, Exhibit 2
Background image of page 8
EE Bonds Used for Education However, interest earned on U.S. savings bonds may be excluded if the proceeds are used to finance the higher education of the taxpayer, taxpayer’s spouse or dependents. Qualified higher education expenses
Background image of page 9

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

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 34

Ch05 - Chapter 5 Gross Income Exclusions 2011 CCH. All...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online