Section 4: Individual Taxation

Gross Income (but not limited to)

1) Alimony (pre-2018) 2) Annuities 3) Dividends (stock, cash, property) 4) Employee benefit programs 5) Employer paid adoption expense 6) Foreign earned income 7) Gambling winnings 8) Interest 9) Capital gains 10) Gains on sale of residence 11) Rental Income 12) Unemployment 13) SS/Railroad retirement 14) Workers Comp 15) Prize & Awards 16) Damages (Compensory) 17) Recoveries 18) GTL Insurance 19) Scholarships (excluding Room/Board & for teaching) 20) Wages

Deductions from Gross Income

1) Alimony (pre-2018) 2) Business expense (Sch. C) 3) Expense from rent/royalty income (Sch. E) 4) Capital losses deduction (Sch. D) 5) Contributions to retirement 6) Student Loan Interest 7) Qualified higher ed expenses 8) HSA 9) Cash Contributions (up to $300 single) for nonitemized filers 9) 50% Self Employment Tax 10) Self employed health insurance prem. 11) Interest forfeited to bank for premature withdraws

1040 Filing Status

1. Single 2. Married Filing Jointly 3. Married Filing Separately 4. Surviving Spouse/Qualified Widow ( with dependent) 5. Head of Household

1040 - Deductions

1. Standard 2. Itemized

1040 Schedule 3

Additional Credits and Payments

1040 Schedule 1

Additional Income & Adjustment to Income

1040 -Line 8b

Adjusted Gross Income

1040 Schedule 1 - Part II

Adjustments to Income

1040 - Line 8a

Adjustments to income from Schedule 1

1040 Schedule 1 - Line 18 a & b

Alimony paid a. amount paid b. SSN of recipient c. date of divorce/alimony agreement Under TCJA - excluded from income for executed agreements as of 1/1/19. Prior to 12/31/18, included in income.

1040 Schedule 1 - Line 2a & b

Alimony received a. amount received b. date of divorce/alimony agreement Under TCJA - excluded from income for executed agreements as of 1/1/19. Prior to 12/31/18, included in income.

1040 Schedule 1 - Line 3

Business Income from Schedule C = Business Income - Expenses If net loss, its fully deductible from other income sources

1040 Schedule C - Line 4

COGS (from Line 42)

Passive Income

Can't offset Ordinary Income Such as rental

1040 - Line 6

Capital Gains (Losses) Attach Schedule D is requested

1040 Schedule A -State and Local Taxes

Capped at $10k for years ended 12/31/17

Charitable Contributions - Capital Assets (stock, equipment etc.) held for longer than 1 year

Deductible at FMV at donation date

Charitable Contributions - Appreciated Capital Assets (property, stock etc.) held for more less than 1 year

Deductible at the lower of FMV or Cost

1040 Schedule 1 - Line 14

Deduction from Self Employment tax (see Schedule SE)

1040 Schedule A - Medical & Dental

Deduction is amount of unreimbursed qualifying medical expenses paid during the year regardless of when the services were provided. Allowed in excess of 7.5 % of AGI ($total - (AGI*7.5% = allowable deduction) If capital improvements - need to back out increased value to home.

1040 Schedule 1 - Line 10

Education expenses (excluding room & board)

NOLs - Generated Before 12/31/2017

Eligible -Carryback: 2 years -Carryforward: 20 years -Offset % of Taxable Income: 100%

NOLs - 2018-2020

Eligible -Carryback: 5 years -Carryforward: Indefinite -Offset % of Taxable Income: 1 prior to 2021. 80% after 2020

NOLs - 2021 +

Eligible -Carryback: None -Carryforward: Indefinite -Offset % of Taxable Income: 80%

1040 - Line 9

Enter Standard Deduction or Amount from Itemized (from Schedule A)

1040 - Line 24

Estimated tax penalty for owing over $1k.

1040 Schedule 1 - Line 6

Farm Income (Loss) (see Attached Schedule F)

1040 - Line 17

Federal Income Tax withheld from Forms W-2 and 1099 Box 2 on W-2 & 1099

1040 Schedule C - Line 1

Gross receipts or sales

1040 Schedule 1 - Line 12

Health Savings Account

1040 Schedule 1 - Line 19

IRA Deduction Traditional IRA is $6k under the age of 50, increase to $7k if over 50. Per individual (i.e. married filing jointly could be up to $12k or 14k)

1040 - Line 4b

IRA Distribution - Taxable Amount Traditional IRA - taxable & must take distributions by 72. Roth IRA - nontaxable if exists more than 5 years AND includes one of the below: -older than 59 1/2 -Payment to beneficiary or estate after death -Owner qualifies as disabled -Distribution for first time home buyer.

Schedule E - Supplemental Income & Loss

Included in 1040

1040 Schedule B

Interest and Ordinary Dividends

1040 Schedule A

Itemized Deductions

Adjusted Gross Income

Line 8b on 1040. Total Income (including Schedules) - Schedule 1 Adjustments

1040 Schedule B - Part 2

List name and payer for dividends (pull from 1099-DIV, or if no form received)

1040 Schedule B - Part 1

List name and payer for interest (pull from 1099-INT, 1099-OID, or if no form received)

1040 Schedule A -Mortgage Interest

Mortgage debt can't exceed $750k. Includes Mortgage insurance premiums (e.g. PMI) and some HELOC (in some instances) Interest on any remaining debt ( from when $1m is grandfathered in)

Passive Income - Real Estate

Must meet: 1) More than 50% of their personal service rendered to a trade or business involving real estate 2) Atleast 750 hours in a year. Can deduct up to $25k in losses. Limited to reduced by 50% of AGI in excess of $100k. Qualifications: 1) Actively participate in rental 2) own atleast 10%

Charitable Contributions - Political

Not deductible under IRS rules for contributions

Charitable Contributions - Rental

Not deductible under contributions

W-2 Box 4 (SS Tax Withheld) & Box 6 (Medicare Withheld)

Not included on 1040.

1040 - Line 2b

Taxable Interest Includes - savings bonds ( @ maturity or elected to accrued), tax refunds (if itemized in PY), federal obligations ( US Treasury Notes & Bonds), Certain union/bank/investment, private activity bonds Pulls from Schedule B

1040 - Line 3b

Ordinary Dividends Equals - Line 3a Pulls from Schedule B

1040 Schedule 1 - Line 8

Other Income (List type & amount) Gambling winnings (net with losses - cant take loss on gambling)

1040 - Line 7a

Other Income from Schedule 1

1040 Schedule C - Line 6

Other Income, including federal and state gasoline or fuel tax credit or refund

1040 Schedule A - Line 16

Other Itemized Deductions (Include Description) This includes gambling losses

1040 Schedule 1 - Line 4

Other gains & losses ( attach Form 4797)

1040 - Line 4d

Pension & Annuities - Taxable Amount

1040 Schedule C

Profit & Loss From Business (Sole Proprietorship)

1040 - Line 10

Qualified Business Income Deduction (Attach Form 8995)

Charitable Contributions - Allowed Under IRS

Qualified under Section 501(c)(3) - including community chest, corps, trusts, fund or foundations organized and operated exclusively for charitable, religious, educational, scientific or literacy purposes or for the prevention of cruelty to animals or children.

Hobbying Losses

Removed under TCJA

1040 Schedule 1 - Line 5

Rental real estate, royalties, partnership, S-Corp, trusts ( Attach Schedule E)

1040 Schedule C - Line 2

Return & Allowances

1040 Schedule SE

Self Employment Tax

1040 - Line 5b

Social Security Benefits Taxable Excludable: <$32k & filing Married (Jointly) $0 Married (Separately) <$25k for all others Includes - up to 85% of PMTs >$44k Married (Jointly) $0 Married (Separately) > $34k for all others Amounts in between brackets are includible up to 50%

1040 - Line 2a

Tax-Exempt Interest Includes Municipal bonds/state agencies

1040 Schedule A - Line 5A

State and Local taxes withheld on W-2 Boxes 17 & 18 *the higher of state/local tax or sales tax*

1040 Schedule 1 - Line 20

Student Loan Interest Deduction Phases Out at Income of $70 - $85k (single), and $145k if your married.

1040 Schedule E

Supplement Income and Loss - Passive Income Include Net amount on Schedule 1 Line 5

1040 Schedule 1 - Line 1

Taxable refunds, credits, offsets of state and local income tax

Deductibility - Capital Losses

To the extent there is capital gains if negative taxable income

1040 - Line 4a

Total IRA Distribution Includes Traditional and Roth

1040 - Line 4c

Total Pension & Annuities

1040 - Line 3a

Total Qualified Dividends Includes Qualified, capital gains, capital transactions

1040 - Line 5a

Total Social Security Benefits

1040 - Dependent Section & Line 13a

Under 17 at the end of tax year - provides a $2k "Child Tax Credit" each Older than 17 at the end of tax year - tax credit of $500 each "Credit for Other Dependents" *Cant take both*

Unearned Income (Kiddie Tax)

Unearned income of a minor will be taxes at parents rate. Exempt up to $2,200. Can file own tax return but needs to be over $1,100 but not less than $11k

1040 Schedule 1 - Line 7

Unemployment Compensation

1040 - Line 1

Wages (Box 1 on W-2), salaries, tips etc.

1040 Schedule A - Charitable Contributions

limited to 60% of AGI under TCJA. Any excess contributions can be carried forward for the next 5 years. CARES for 2020 & 2021 - extended to 100% deductible for cash donations up to 100% of AGI.

Tax Credit vs. Tax Deduction

tax credit directly reduces your taxes by x amount tax deduction reduces your taxable income; actual taxes reduction depends on tax bracket