Podcast
Questions and Answers
Below the line deductions include?
Below the line deductions include?
Standard deduction
Eligible educators can deduct up to _______ of qualified expenses paid during the tax year.
Eligible educators can deduct up to _______ of qualified expenses paid during the tax year.
$250
Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA MSA?
Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA MSA?
The net capital gain is taxed at _______ if the married filing jointly taxpayer income is less than $80,800.
The net capital gain is taxed at _______ if the married filing jointly taxpayer income is less than $80,800.
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To claim a child as a dependent, they must meet the qualifying child test or ________________.
To claim a child as a dependent, they must meet the qualifying child test or ________________.
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Ordinary dividends are taxed at the same rate as __________ income tax rate.
Ordinary dividends are taxed at the same rate as __________ income tax rate.
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Distributions from HSA, Archer MSA, or MA MSA are non-taxable when _________________________________________.
Distributions from HSA, Archer MSA, or MA MSA are non-taxable when _________________________________________.
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Which residency status is used when an individual is neither a U.S. citizen nor a resident alien for tax purposes?
Which residency status is used when an individual is neither a U.S. citizen nor a resident alien for tax purposes?
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_____________ and ____________ are what taxpayers must know to calculate their tax amount.
_____________ and ____________ are what taxpayers must know to calculate their tax amount.
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For mortgages entered into after December 15, 2017, the amount of interest the taxpayer can deduct is no more than ______________ of the debt used to buy, build, or substantially improve their principal home and a second home.
For mortgages entered into after December 15, 2017, the amount of interest the taxpayer can deduct is no more than ______________ of the debt used to buy, build, or substantially improve their principal home and a second home.
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__________ reduce the amount of tax due.
__________ reduce the amount of tax due.
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Which form is for beneficiaries who get income from trusts and estates?
Which form is for beneficiaries who get income from trusts and estates?
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___________________ consists of both earned and unearned income that is used to calculate the tax. It is generally less than adjusted gross income due to the deductions.
___________________ consists of both earned and unearned income that is used to calculate the tax. It is generally less than adjusted gross income due to the deductions.
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To satisfy the Substantial Presence Test, how many minimum days (in the current year) must you be physically present in the United States?
To satisfy the Substantial Presence Test, how many minimum days (in the current year) must you be physically present in the United States?
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Complete the equation.___________ = Selling Price - Purchase Price.
Complete the equation.___________ = Selling Price - Purchase Price.
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_________________ helps sole proprietorships calculate the profit or loss from a business while also providing the IRS with your total business income and deductions.
_________________ helps sole proprietorships calculate the profit or loss from a business while also providing the IRS with your total business income and deductions.
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What type of deduction is a HSA contribution?
What type of deduction is a HSA contribution?
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As it applies to compensation income, the general rule for sourcing wages and personal services income is controlled by ________________________________.
As it applies to compensation income, the general rule for sourcing wages and personal services income is controlled by ________________________________.
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Which is considered non-taxable income?
Which is considered non-taxable income?
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______________ is used to offset income and payroll taxes for low-income workers and to provide an incentive to work.
______________ is used to offset income and payroll taxes for low-income workers and to provide an incentive to work.
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Which is a non-deductible business expense?
Which is a non-deductible business expense?
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What amount of upper cap is applicable on business gifts?
What amount of upper cap is applicable on business gifts?
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If yearly dividend amounts exceed __________, a Schedule B must be completed and attached to Form 1040.
If yearly dividend amounts exceed __________, a Schedule B must be completed and attached to Form 1040.
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There are _________ filing statuses.
There are _________ filing statuses.
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Study Notes
Tax Deductions and Credits
- Below the line deductions include the standard deduction.
- Eligible educators may deduct up to $250 for qualified expenses incurred during the tax year.
- Tax credits directly reduce the total tax liability.
Health Savings Accounts (HSA) and Medical Expenses
- Ineligible medical expenses for HSA, Archer MSA, and MA MSA include breast enhancement.
- Distributions from HSA and similar accounts are non-taxable when spent on qualified medical expenses for dependents.
Income Tax and Capital Gains
- The net capital gain is taxed at 0% if income is less than $80,800 for married couples filing jointly.
- Ordinary dividends are taxed at the same rate as ordinary income.
- Taxable income is defined as earned and unearned income after deductions.
Child Dependents and Tax Filing
- To claim a child as a dependent, they must meet either the qualifying child test or the qualifying relative test.
- Taxpayers need to know their taxable income and filing status to calculate their taxes.
- There are five filing statuses available: Single, Married Filing Jointly, Married Filing Separately, Head of Household, and Qualifying Widow(er).
Mortgage Interest and Business Deductions
- For mortgages taken after December 15, 2017, the interest deduction is capped at $750,000 for primary and secondary homes.
- Expenses for personal vacations, like family trips, are non-deductible as they are considered personal in nature.
Forms and Income Sources
- Form 1041 is for beneficiaries receiving income from trusts and estates.
- Schedule C is used by sole proprietorships to report profits or losses and provide income and deduction details to the IRS.
Presence and Residency for Tax Purposes
- A minimum of 31 days of physical presence in the U.S. is required to meet the Substantial Presence Test.
- Non-resident aliens do not qualify as U.S. citizens or resident aliens for tax purposes.
Business Gifts and Dividends
- The upper cap for business gifts is limited to $25 per recipient.
- If yearly dividend amounts exceed $1,500, a Schedule B must be attached to Form 1040 for detail.
Income Credits
- The Earned Income Tax Credit helps low-income workers by offsetting income and payroll taxes, serving as an incentive to work.
- Military personnel allowances are generally considered non-taxable unless pertaining to retirement pay.
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Description
Test your knowledge of tax-related terms and principles with these flashcards from Intuit Academy's Tax Level 1 course. Each card focuses on key deductions, eligibility, and regulations that are important for tax preparation. Perfect for students and individuals looking to improve their understanding of taxation.
