Deductions for AGI

Question 1

How do you calculate AGI?

Answer 1

Gross income - for AGI deductions

Question 2

What is a trade activity?

Answer 2

-An activity with a continuous level of profit seeking

Question 3

What do for AGI deductions primarily consist of?

Answer 3

-Business related expenses associated with a trade

Question 4

List the most common for AGI deductions.

Answer 4

• Alimony payments
• Half of self employment tax
• 100% of medical insurance premiums for SE taxpayers
• Moving expenses
• IRA and Keogh contributions
• Interest on student loans
• Contributions to Health Savings Accounts
• Attorney’s fees and court costs for discrimination suits
• Penalties for early withdrawals of saving

Question 5

What are the requirements for moving expenses to be deductible?

Answer 5

• New job location must add 50 miles to old commute
• Must be active in new job for 39 of next 52 weeks or 78 of next 104 if self employed
• Only moving expenses, transportation costs, and lodging deductible
• Not food nor temporary living expenses

Question 6

Is student loan interest deductible? Up to what amount? Who can deduct it?

Answer 6

• Yes. Limited to $2,500

- If parent claims student as dependent, parent can deduct interest even if student pays it

Question 7

What are the applicable deductions for a K-12 educator?

Answer 7

• Up to $250 for expenses related to supplies used in the classroom
• Over this limit is a 2% misc. itemized deduction