Adjustments

Question 1

Eligible educators can deduct up to…

Answer 1

$250 of qualified expenses paid

-if spouses r eligable educators and file jointly then max is $500

Question 2

Who is an eligable educator

Answer 2

kindergarten through 12 grade, instructor, counselor, principal, or aid working in a scholl at least 900 hrs per year

Question 3

What are qulified educator expenses

Answer 3

ord n necessary exps paid in connetion with books, supplies, equipment, n materials used in classroom (computers services etc.) (does not have to b required)

Question 4

Is homeschooling or nonathletic supplies for courses in health or physical education qualified educator expenses?

Answer 4

no

Question 5

Annual max contribution to IRA for ppl under age 50

Answer 5

single: lessor of 6k or earned income
married: lessor of 12k or earned income of couple

Question 6

Annual max contribution to IRA for ppl over age 50

Answer 6

single: lessor of 7k or earned income
married: lessor of 14k or earned income of couple

Question 7

Annual max contribution to IRA for ppl over age 70.5

Answer 7

0

Question 8

what is not considered earned income in terms of the max ira contribution?

Answer 8

• interest n dividends
• annuity income
• pensions
• alimony

Question 9

Deductible Traditional IRA

Answer 9

• contributions are deductible from gross income to arrive at adjusted fross income
• earnings accumulate tax free (deferred)
• Distributions from are taxable as ordinary income and may be subject to applicable penalties
• min distribs required at 70.5

Question 10

Nondeductible Traditional IRA

Answer 10

• earnings on nondeuductible IRA contribs will accumulate tax free until withdrawn
• distributions r taxed as follows:
  1) taxable: previously accumulated untaxed earnings
  2) nontaxable: the principal contributions (not deducted when contributed)

-no phase out based on MAGI

Question 11

Roth IRA

Answer 11

• contribs are nondecuctible when made
• earnings accumulate tax free
• distribs of both principal n interest are also tax free if they are qualified distributions

Question 12

the ability to contribut to a roth ira is limited by

Answer 12

modified AGI

Question 13

Early distributions are exempt from penalty if used for…

Answer 13

• qualifying medical expenses
• health insurance premiums
• qualified higher education expenses
• first-time home purchases (limited to 10k)

Question 14

Student loan interest exp rules

Answer 14

all interest payments qualify for the adjustment

• limited to 2.5k per year
• dependent may not claim the adjustment

Question 15

Self employment tax

Answer 15

50% of SS/medicare tax is deducted to arrive at adjusted gross income

Question 16

Self employeed ppl may deduct what for health insurance

Answer 16

may deduct all of the medical insurance premiums paid for them n their family

Question 17

what is a retirement plan available to self employed people

Answer 17

Keogh (prfoit sharing plan)

Question 18

how do you calculate the keogh deduction

Answer 18

20% x self employment income

Question 19

What does “interest forfeited” mean

Answer 19

the interest penalty on early withdrawal of savings when funds in a certificate of deposit are withdrawn before maturity

Question 20

are alimony payments deductible to arrive at AGI

Answer 20

only for divorces before 12/31/18

Question 21

rule for property settlement in divorce

Answer 21

spuce gets no deduction for payments made, and payments received are not included in income of person receiving