Taxation of Business Entities C16-1 Chapter 16 Introduction to the Taxation of Individuals...

C16-C16-11Taxation of Business EntitiesTaxation of Business Entities

Chapter 16Chapter 16

Introduction to the Taxation of Individuals

Introduction to the Taxation of Individuals

Copyright ©2010 Cengage Learning

Taxation of Business Entities


Tax Formula (slide 1 of 2)Tax Formula (slide 1 of 2)

Income (broadly conceived) $x,xxxLess:Exclusions (x,xxx)Gross Income $x,xxxLess:Deductions for AGI (x,xxx)Adjusted Gross Income (AGI) $x,xxxLess:The greater of-

Total itemized deductionsor the standard deduction (x,xxx)Personal & dependency exemptions (x,xxx)

Taxable Income $x,xxx

Income (broadly conceived) $x,xxxLess:Exclusions (x,xxx)Gross Income $x,xxxLess:Deductions for AGI (x,xxx)Adjusted Gross Income (AGI) $x,xxxLess:The greater of-

Total itemized deductionsor the standard deduction (x,xxx)Personal & dependency exemptions (x,xxx)

Taxable Income $x,xxxFIGURE 16–1


Tax Formula (slide 2 of 2)Tax Formula (slide 2 of 2)

Tax on taxable income (see Tax Tables or Tax Rate Schedules) $ x,xxxLess: Tax credits (including income taxes withheld and prepaid) (xxx)Tax due (or refund) $ xxx

Tax on taxable income (see Tax Tables or Tax Rate Schedules) $ x,xxxLess: Tax credits (including income taxes withheld and prepaid) (xxx)Tax due (or refund) $ xxx

FIGURE 16.1


Income -Broadly ConceivedIncome -Broadly Conceived

• Includes all the taxpayer’s income, both taxable and nontaxable– Essentially equivalent to gross receipts

• It does not include a return of capital or receipt of borrowed funds

• Includes all the taxpayer’s income, both taxable and nontaxable– Essentially equivalent to gross receipts

• It does not include a return of capital or receipt of borrowed funds


Partial List of Exclusions from Gross Income

Partial List of Exclusions from Gross Income

• Accident insurance proceeds• Annuities (cost element)• Bequests• Child support payments• Cost-of-living allowance (for military)• Damages for personal injury or sickness• Gifts received• Group term life insurance, premium

paid by employer (for coverage up to $50,000)

• Inheritances• Interest from state and local (i.e.,

municipal) bonds• Life insurance paid on death

• Accident insurance proceeds• Annuities (cost element)• Bequests• Child support payments• Cost-of-living allowance (for military)• Damages for personal injury or sickness• Gifts received• Group term life insurance, premium

paid by employer (for coverage up to $50,000)

• Inheritances• Interest from state and local (i.e.,

municipal) bonds• Life insurance paid on death

• Meals and lodging (if furnished for employer’s convenience)

• Military allowances• Minister’s dwelling rental value

allowance• Railroad retirement benefits (to a

limited extent)• Scholarship grants (to a limited extent)• Social Security benefits (to a limited

extent)• Veterans’ benefits• Welfare payments• Workers’ compensation benefits

• Meals and lodging (if furnished for employer’s convenience)

• Military allowances• Minister’s dwelling rental value

allowance• Railroad retirement benefits (to a

limited extent)• Scholarship grants (to a limited extent)• Social Security benefits (to a limited

extent)• Veterans’ benefits• Welfare payments• Workers’ compensation benefits

Exhibit 16-1


Gross IncomeGross Income

• The Internal Revenue Code defines gross income broadly as ‘‘except as otherwise provided . . . , all income from whatever source derived’’

• Gross income does not include unrealized gains

• The Internal Revenue Code defines gross income broadly as ‘‘except as otherwise provided . . . , all income from whatever source derived’’

• Gross income does not include unrealized gains


Partial List of Gross Income Items (slide 1 of 2)


• Alimony• Annuities (income element)• Awards• Back pay• Bargain purchase from employer• Bonuses• Breach of contract damages• Business income• Clergy fees• Commissions• Compensation for services• Death benefits• Debts forgiven• Director’s fees

• Alimony• Annuities (income element)• Awards• Back pay• Bargain purchase from employer• Bonuses• Breach of contract damages• Business income• Clergy fees• Commissions• Compensation for services• Death benefits• Debts forgiven• Director’s fees

• Hobby income• Interest• Jury duty fees• Living quarters, meals (unless

furnished for employer’s convenience)

• Mileage allowance• Military pay (unless combat pay)• Notary fees• Partnership income• Pensions• Prizes• Professional fees• Punitive damages

• Hobby income• Interest• Jury duty fees• Living quarters, meals (unless

furnished for employer’s convenience)

• Mileage allowance• Military pay (unless combat pay)• Notary fees• Partnership income• Pensions• Prizes• Professional fees• Punitive damages

Exhibit 16-2




• Dividends• Embezzled funds• Employee awards (in certain cases)• Employee benefits (except certain

fringe benefits)• Estate and trust income• Farm income• Fees• Gains from illegal activities• Gains from sale of property• Gambling winnings• Group term life insurance,

premium paid by employer (for coverage over $50,000)

• Dividends• Embezzled funds• Employee awards (in certain cases)• Employee benefits (except certain

fringe benefits)• Estate and trust income• Farm income• Fees• Gains from illegal activities• Gains from sale of property• Gambling winnings• Group term life insurance,

premium paid by employer (for coverage over $50,000)

• Rents• Rewards• Royalties• Salaries• Severance pay• Strike and lockout benefits• Supplemental unemployment

benefits• Tips and gratuities• Travel allowance (in certain cases)• Wages

• Rents• Rewards• Royalties• Salaries• Severance pay• Strike and lockout benefits• Supplemental unemployment

benefits• Tips and gratuities• Travel allowance (in certain cases)• Wages

Exhibit 16-2


Deductions - Individual TaxpayersDeductions - Individual Taxpayers

• Individual taxpayers have two categories of deductions: – Deductions for adjusted gross income (AGI) – Deductions from adjusted gross income

• Individual taxpayers have two categories of deductions: – Deductions for adjusted gross income (AGI) – Deductions from adjusted gross income


Deductions For AGI (slide 1 of 2)Deductions For AGI (slide 1 of 2)

• Sometimes known as above-the-line deductions – On the tax return, they are taken before the

‘‘line’’ designating AGI

• Sometimes known as above-the-line deductions – On the tax return, they are taken before the

‘‘line’’ designating AGI


Deductions For AGI (slide 2 of 2)Deductions For AGI (slide 2 of 2)

• Deductions for AGI include:– Ordinary and necessary expenses incurred in a trade or

business– One-half of self-employment tax paid– Alimony paid– Certain payments to an IRA and Health Savings

Account– Moving expenses– Forfeited interest penalty for premature withdrawal of

time deposits– The capital loss deduction, and – Others

• Deductions for AGI include:– Ordinary and necessary expenses incurred in a trade or

business– One-half of self-employment tax paid– Alimony paid– Certain payments to an IRA and Health Savings

Account– Moving expenses– Forfeited interest penalty for premature withdrawal of

time deposits– The capital loss deduction, and – Others


Adjusted Gross Income (AGI)Adjusted Gross Income (AGI)

• AGI is an important subtotal – Serves as the basis for computing percentage

limitations on certain itemized deductions such as• Medical expenses

• Charitable contributions

• Certain casualty losses

– e.g., Medical expenses are deductible only to the extent they exceed 7.5% of AGI

• This limitation might be described as a 7.5% “floor” under the medical expense deduction

• AGI is an important subtotal – Serves as the basis for computing percentage

limitations on certain itemized deductions such as• Medical expenses

• Charitable contributions

• Certain casualty losses

– e.g., Medical expenses are deductible only to the extent they exceed 7.5% of AGI

• This limitation might be described as a 7.5% “floor” under the medical expense deduction


Deductions From AGI (slide 1 of 3)Deductions From AGI (slide 1 of 3)

• Deductions from AGI include:– The greater of:

• Itemized deductions, or

• The standard deduction

– Personal and dependency exemptions

• Deductions from AGI include:– The greater of:

• Itemized deductions, or

• The standard deduction

– Personal and dependency exemptions



• A partial list of itemized deductions includes:– Medical expenses (in excess of 7.5% of AGI)– Certain taxes and interest– Charitable contributions– Deductions for expenses related to

• The production or collection of income, and• The management of property held for the production

of income

• A partial list of itemized deductions includes:– Medical expenses (in excess of 7.5% of AGI)– Certain taxes and interest– Charitable contributions– Deductions for expenses related to

• The production or collection of income, and• The management of property held for the production

of income



• The standard deduction is the sum of two components: – Basic standard deduction

• Amount allowed is based on taxpayer’s filing status

– Additional standard deductions• Available for taxpayers who are

– Age 65 or over, and

– Blind

• Two additional standard deductions are allowed for a taxpayer who is age 65 or over and blind

• Amount allowed depends on filing status

• The standard deduction is the sum of two components: – Basic standard deduction

• Amount allowed is based on taxpayer’s filing status

– Additional standard deductions• Available for taxpayers who are

– Age 65 or over, and

– Blind

• Two additional standard deductions are allowed for a taxpayer who is age 65 or over and blind

• Amount allowed depends on filing status


Standard Deduction (slide 1 of 2)

Standard Deduction (slide 1 of 2)

• The basic standard deduction (BSD) amount depends on filing status of taxpayer

• The basic standard deduction (BSD) amount depends on filing status of taxpayer

Filing status 2008 2009 .Single $5,450 $5,700MFJ, SS 10,900 11,400HH 8,000 8,350MFS 5,450 5,700


Standard Deduction(slide 2 of 2)

Standard Deduction(slide 2 of 2)

• Additional standard deduction (ASD)– For taxpayers age 65 or older and/or legally

blind

• Additional standard deduction (ASD)– For taxpayers age 65 or older and/or legally

blind

Filing Status 2008 2009 .Single $1,350 $1,400MFJ, SS 1,050 1,100HH 1,350 1,400MFS 1,050 1,100

TABLE 3–2


Determining Standard DeductionDetermining Standard Deduction

• Examples (2009 tax year):– Taxpayer is single, blind, and age 65 or older

• SD = $5,700 (BSD) + $1,400 (ASD) + $1,400 (ASD) = $8,500

– Taxpayers are married, filing jointly, one blind, and both age 65 or older

• SD = $11,400 (BSD) + $1,100 (ASD) + $1,100 (ASD) + $1,100 (ASD) = $14,700

• Examples (2009 tax year):– Taxpayer is single, blind, and age 65 or older

• SD = $5,700 (BSD) + $1,400 (ASD) + $1,400 (ASD) = $8,500

– Taxpayers are married, filing jointly, one blind, and both age 65 or older

• SD = $11,400 (BSD) + $1,100 (ASD) + $1,100 (ASD) + $1,100 (ASD) = $14,700


ARRTA of 2009 - Two New Standard Deductions

ARRTA of 2009 - Two New Standard Deductions

• ARRTA of 2009 provides two new tax incentives to stimulate home ownership and sale of autos– Provisions allow nonitemizers to deduct real property

taxes and sales tax paid on purchase of autos as special standard deduction

– Property taxes on a personal residence and sales taxes on a personal auto normally are deductions from AGI

• Thus, the standard deductions alternative is a tax windfall for taxpayers who do not itemize

• ARRTA of 2009 provides two new tax incentives to stimulate home ownership and sale of autos– Provisions allow nonitemizers to deduct real property

taxes and sales tax paid on purchase of autos as special standard deduction

– Property taxes on a personal residence and sales taxes on a personal auto normally are deductions from AGI

• Thus, the standard deductions alternative is a tax windfall for taxpayers who do not itemize


ARRTA of 2009 - Standard Deduction For Real Property Taxes

ARRTA of 2009 - Standard Deduction For Real Property Taxes

• This temporary standard deduction for real property taxes is available for 2008 and 2009 tax returns– The amount allowed is the lesser of

• The amount paid, or

• $500 ($1,000 on a joint return)

• This temporary standard deduction for real property taxes is available for 2008 and 2009 tax returns– The amount allowed is the lesser of

• The amount paid, or

• $500 ($1,000 on a joint return)


ARRTA of 2009 - Sales Tax Paid On The Purchase Of Autos

ARRTA of 2009 - Sales Tax Paid On The Purchase Of Autos

• This temporary standard deduction is available for auto sales tax paid on purchases that occur from Feb. 17 through Dec. 31, 2009– Deduction cannot exceed tax on first $49,500 of

purchase price

– Deduction is phased-out when taxpayer’s AGI exceeds $125,000 ($250,000 on a joint return)

– Purchased vehicle (e.g., cars, SUVs, light trucks, motorcycles) cannot exceed gross weight of 8,500 lbs.

– Original use must commence with the taxpayer

• This temporary standard deduction is available for auto sales tax paid on purchases that occur from Feb. 17 through Dec. 31, 2009– Deduction cannot exceed tax on first $49,500 of

purchase price

– Deduction is phased-out when taxpayer’s AGI exceeds $125,000 ($250,000 on a joint return)

– Purchased vehicle (e.g., cars, SUVs, light trucks, motorcycles) cannot exceed gross weight of 8,500 lbs.

– Original use must commence with the taxpayer


Taxpayers Ineligible For Standard Deduction

Taxpayers Ineligible For Standard Deduction

• Certain taxpayers cannot use the SD:– Married, filing separately, when either spouse

itemizes deductions– Nonresident aliens– Individual filing return for tax year of less than

12 months because of change in annual accounting period

• Certain taxpayers cannot use the SD:– Married, filing separately, when either spouse

itemizes deductions– Nonresident aliens– Individual filing return for tax year of less than

12 months because of change in annual accounting period


SD Limit For Person Claimed as DependentSD Limit For Person Claimed as Dependent

• Individual claimed as dependent has a BSD in 2009 limited to the greater of:– $950 or – $300 plus earned income (but not exceeding

normal BSD)

• ASD amount(s) still available

• Individual claimed as dependent has a BSD in 2009 limited to the greater of:– $950 or – $300 plus earned income (but not exceeding

normal BSD)

• ASD amount(s) still available


Examples of SD Limit (slide 1 of 2)Examples of SD Limit (slide 1 of 2)

• Dependent’s SD (2009 tax year):– A blind child who earns $200 and is claimed by

parents as a dependency exemption• SD = $950 (BSD) + $1,400 (ASD) = $2,350

– A child who earns $1,500 and is claimed by parents as a dependency exemption

• SD = $1,800 [BSD equal to greater of $950 or ($300 + $1,500 earned income)]

• Dependent’s SD (2009 tax year):– A blind child who earns $200 and is claimed by

parents as a dependency exemption• SD = $950 (BSD) + $1,400 (ASD) = $2,350

– A child who earns $1,500 and is claimed by parents as a dependency exemption

• SD = $1,800 [BSD equal to greater of $950 or ($300 + $1,500 earned income)]


Examples of SD Limit (slide 2 of 2)Examples of SD Limit (slide 2 of 2)

• Examples of dependent’s SD (2009 tax year)– A child who earns $6,000 and is claimed by

parents as a dependency exemption• SD = $5,700 [BSD limited to normal amount]

• Examples of dependent’s SD (2009 tax year)– A child who earns $6,000 and is claimed by

parents as a dependency exemption• SD = $5,700 [BSD limited to normal amount]


Personal and Dependency Exemption Amounts

Personal and Dependency Exemption Amounts

• Amounts– 2008: $3,500 per exemption– 2009: $3,650 per exemption

• Personal and dependency exemptions– One per taxpayer (two personal exemptions

when married, filing jointly) and for each dependent

• Exception: Individual claimed as dependent by another taxpayer does not receive a personal exemption

• Amounts– 2008: $3,500 per exemption– 2009: $3,650 per exemption

• Personal and dependency exemptions– One per taxpayer (two personal exemptions

when married, filing jointly) and for each dependent

• Exception: Individual claimed as dependent by another taxpayer does not receive a personal exemption


Personal and Dependency Exemptions In Year Of Death

Personal and Dependency Exemptions In Year Of Death

• Personal exemption allowed on joint return for spouse who dies during the year– Example: Tom and Betty were married in 1990.

Tom dies on February 1, 2008. A personal exemption may be claimed for Tom on the taxpayers’ 2008 joint return.

• Personal exemption allowed on joint return for spouse who dies during the year– Example: Tom and Betty were married in 1990.

Tom dies on February 1, 2008. A personal exemption may be claimed for Tom on the taxpayers’ 2008 joint return.


Dependency Exemptions (slide 1 of 2)Dependency Exemptions (slide 1 of 2)

• A dependency exemption is available for one who is either a qualifying child or a qualifying relative– A qualifying child must meet the following

tests:• Relationship• Abode• Age, and • Support

• A dependency exemption is available for one who is either a qualifying child or a qualifying relative– A qualifying child must meet the following

tests:• Relationship• Abode• Age, and • Support


Dependency Exemptions (slide 2 of 2)Dependency Exemptions (slide 2 of 2)

• One objective of the Working Families Tax Relief Act of 2004 (WFTRA of 2004)– Establish a uniform definition of qualifying

child for purposes of the:• Dependency exemption• Head-of-household filing status• Earned income tax credit• Child tax credit• Credit for child and dependent care expenses

• One objective of the Working Families Tax Relief Act of 2004 (WFTRA of 2004)– Establish a uniform definition of qualifying

child for purposes of the:• Dependency exemption• Head-of-household filing status• Earned income tax credit• Child tax credit• Credit for child and dependent care expenses


Relationship TestRelationship Test

• The child must be the taxpayer’s: – Son or daughter– Stepson or stepdaughter– Brother or sister– Stepbrother or stepsister– Half brother or half sister, or – A descendant of such individual (e.g., grandchildren,

nephews, nieces)• A child who has been adopted, or whose adoption

is pending, qualifies• A foster child may also qualify

• The child must be the taxpayer’s: – Son or daughter– Stepson or stepdaughter– Brother or sister– Stepbrother or stepsister– Half brother or half sister, or – A descendant of such individual (e.g., grandchildren,

nephews, nieces)• A child who has been adopted, or whose adoption

is pending, qualifies• A foster child may also qualify


Abode Test Abode Test

• A qualifying child must live with the taxpayer for more than half of the year– Temporary absences from the household due to

special circumstances (e.g., illness, education) are not considered

• A qualifying child must live with the taxpayer for more than half of the year– Temporary absences from the household due to

special circumstances (e.g., illness, education) are not considered


Age TestAge Test

• The child must be under age 19 or under age 24 in the case of a student– A student is a child who, during any part of five

months of the year, is enrolled full time at a school or government-sponsored on-farm training course

– Individuals who are disabled are not subject to the age test

• The child must be under age 19 or under age 24 in the case of a student– A student is a child who, during any part of five

months of the year, is enrolled full time at a school or government-sponsored on-farm training course

– Individuals who are disabled are not subject to the age test


SupportSupport

• To be a qualifying child, the individual must not be self-supporting– Cannot provide more than one-half of his or her

own support– In the case of a full-time student, scholarships

are not considered to be support

• To be a qualifying child, the individual must not be self-supporting– Cannot provide more than one-half of his or her

own support– In the case of a full-time student, scholarships

are not considered to be support


Tiebreaker RulesTiebreaker Rules

• In situations where a child may be a qualifying child for more than one person– Tiebreaker rules specify which person has

priority in claiming the dependency exemption

• In situations where a child may be a qualifying child for more than one person– Tiebreaker rules specify which person has

priority in claiming the dependency exemption


Qualifying RelativeQualifying Relative

• In order to claim a dependency exemption for a qualifying relative, the following tests must be met:– Relationship – Gross income– Support

• In order to claim a dependency exemption for a qualifying relative, the following tests must be met:– Relationship – Gross income– Support


Relationship TestRelationship Test

• The relationship test for a qualifying relative is more expansive than for a qualifying child. Also included are the following relatives:– Lineal ascendants (e.g., parents, grandparents)– Collateral ascendants (e.g., uncles, aunts)– Certain in-laws (e.g., son-, daughter-, father-, mother-,

brother-, and sister-in-law)

• The relationship test also includes unrelated parties who live with the taxpayer

• The relationship test for a qualifying relative is more expansive than for a qualifying child. Also included are the following relatives:– Lineal ascendants (e.g., parents, grandparents)– Collateral ascendants (e.g., uncles, aunts)– Certain in-laws (e.g., son-, daughter-, father-, mother-,

brother-, and sister-in-law)

• The relationship test also includes unrelated parties who live with the taxpayer


Gross Income TestGross Income Test

• Dependent’s gross income must be less than the exemption amount ($3,650 for 2009)

• Dependent’s gross income must be less than the exemption amount ($3,650 for 2009)


Support TestSupport Test

• Taxpayer must provide more than 50% of the qualifying relative’s support– Only amounts expended are considered in the support

test

– Scholarships are not considered in the support test

• Two exceptions to the support test:– Multiple support agreements

– Children of divorced parents

• Taxpayer must provide more than 50% of the qualifying relative’s support– Only amounts expended are considered in the support

test

– Scholarships are not considered in the support test

• Two exceptions to the support test:– Multiple support agreements

– Children of divorced parents


Multiple Support AgreementsMultiple Support Agreements

• Allows one member of a group providing > 50% of support to claim individual even though no one person provides > 50% support– Eligible parties must provide > 10% of support

– Each eligible party must meet all other dependency requirements

• Example - Allows children of elderly parent to claim exemption for parent when none individually meets the 50% support test

• Allows one member of a group providing > 50% of support to claim individual even though no one person provides > 50% support– Eligible parties must provide > 10% of support

– Each eligible party must meet all other dependency requirements

• Example - Allows children of elderly parent to claim exemption for parent when none individually meets the 50% support test


Children of Divorced ParentsChildren of Divorced Parents

• Special rules apply if the parents meet the following conditions:– They would have been entitled to the dependency exemption had

they been married and filed a joint return– They have custody (either jointly or singly) of the child for more

than half of the year

• Under the general rule, the parent having custody of the child for the greater part of the year (i.e., the custodial parent) is entitled to the dependency exemption– General rule does not apply if

• A multiple support agreement is in effect• Custodial parent issues a waiver in favor of the noncustodial parent

• Special rules apply if the parents meet the following conditions:– They would have been entitled to the dependency exemption had

they been married and filed a joint return– They have custody (either jointly or singly) of the child for more

than half of the year

• Under the general rule, the parent having custody of the child for the greater part of the year (i.e., the custodial parent) is entitled to the dependency exemption– General rule does not apply if

• A multiple support agreement is in effect• Custodial parent issues a waiver in favor of the noncustodial parent


Other Rules for Dependency Exemptions

Other Rules for Dependency Exemptions

• In addition to fitting into either the qualifying child or the qualifying relative category, a dependent must also meet:– The joint return, and – The citizenship or residency tests

• In addition to fitting into either the qualifying child or the qualifying relative category, a dependent must also meet:– The joint return, and – The citizenship or residency tests


Joint Return TestJoint Return Test

• Dependent cannot file a joint return with spouse unless:– Filing solely for refund of tax withheld– No tax liability exists for either spouse – Neither spouse required to file return

• Dependent cannot file a joint return with spouse unless:– Filing solely for refund of tax withheld– No tax liability exists for either spouse – Neither spouse required to file return


Citizen or Residency TestCitizen or Residency Test

• Dependent must be a U.S. citizen or a resident of U.S., Canada, or Mexico for some part of the calendar year in which the taxpayer’s tax year begins– An exception provides that an adopted child

need not be a citizen or resident of the U.S. (or a contiguous country) as long as his or her principal abode is with a U.S. citizen

• Dependent must be a U.S. citizen or a resident of U.S., Canada, or Mexico for some part of the calendar year in which the taxpayer’s tax year begins– An exception provides that an adopted child

need not be a citizen or resident of the U.S. (or a contiguous country) as long as his or her principal abode is with a U.S. citizen


Phase-out of Exemptions (slide 1 of 2)Phase-out of Exemptions (slide 1 of 2)

Applies when taxpayer’s AGI in 2009 exceeds:• $250,200 for married, filing jointly, or surviving spouse

• $208,500 for head of household

• $166,800 for single

• $125,100 for married, filing separately

• The phase-out of exemptions is being repealed in two stages and will not be complete until 2010– The exemption phaseout remains at two-thirds for 2006

and 2007 and at one-third for 2008 and 2009

Applies when taxpayer’s AGI in 2009 exceeds:• $250,200 for married, filing jointly, or surviving spouse

• $208,500 for head of household

• $166,800 for single

• $125,100 for married, filing separately

• The phase-out of exemptions is being repealed in two stages and will not be complete until 2010– The exemption phaseout remains at two-thirds for 2006

and 2007 and at one-third for 2008 and 2009


Phase-out of Exemptions (slide 2 of 2)Phase-out of Exemptions (slide 2 of 2)

• Exemptions deduction is reduced by 2% for every $2,500 ($1,250 for MFS), or part thereof, that AGI exceeds threshold amounts– The amount of the phased-out exemptions is

then multiplied by 1/3 (the reduction-of-phaseout fraction) for tax years 2008 and 2009

• Exemptions deduction is reduced by 2% for every $2,500 ($1,250 for MFS), or part thereof, that AGI exceeds threshold amounts– The amount of the phased-out exemptions is

then multiplied by 1/3 (the reduction-of-phaseout fraction) for tax years 2008 and 2009


Filing Requirements (slide 1 of 2)Filing Requirements (slide 1 of 2)

• General Rule: Tax return must be filed if gross income is ≥ the sum of the standard deduction and exemption amount

• ASD for blind does not apply for this determination

– Special rules apply for dependents and self-employed taxpayers

• General Rule: Tax return must be filed if gross income is ≥ the sum of the standard deduction and exemption amount

• ASD for blind does not apply for this determination

– Special rules apply for dependents and self-employed taxpayers


Filing Requirements (slide 2 of 2)Filing Requirements (slide 2 of 2)

• Tax return of an individual is due on or before the 15th day of the 4th month after taxpayer’s year end– Most individuals are calendar year taxpayers, thus, due

date is April 15

• May obtain a 6 month extension of time to file– Excuses a taxpayer from penalty for failure to file, not

from penalty for failure to pay• If more tax is owed, extension request (Form 4868) should be

accompanied by check for balance of tax due

• Tax return of an individual is due on or before the 15th day of the 4th month after taxpayer’s year end– Most individuals are calendar year taxpayers, thus, due

date is April 15

• May obtain a 6 month extension of time to file– Excuses a taxpayer from penalty for failure to file, not

from penalty for failure to pay• If more tax is owed, extension request (Form 4868) should be

accompanied by check for balance of tax due


Filing StatusFiling Status

• There are 5 filing statuses– Single

– Married, filing jointly

– Surviving spouse (qualifying widow or widower)

– Head of household

– Married, filing separately

• Filing status affects tax rate brackets, standard deduction, and other amounts

• There are 5 filing statuses– Single

– Married, filing jointly

– Surviving spouse (qualifying widow or widower)

– Head of household

– Married, filing separately

• Filing status affects tax rate brackets, standard deduction, and other amounts


Single Filing StatusSingle Filing Status

• Includes a taxpayer who is unmarried or separated from spouse by a divorce decree or separate maintenance agreement and does not qualify for another filing status – Marital status is determined as of the last day of

the tax year• When a spouse dies during the year, marital status is

determined as of the date of death

• Includes a taxpayer who is unmarried or separated from spouse by a divorce decree or separate maintenance agreement and does not qualify for another filing status – Marital status is determined as of the last day of

the tax year• When a spouse dies during the year, marital status is

determined as of the date of death


Married Filing Jointly (MFJ) Filing Status

Married Filing Jointly (MFJ) Filing Status

• Married as of last day of taxable year, or

• Spouse dies during taxable year

• Married as of last day of taxable year, or

• Spouse dies during taxable year


Surviving Spouse Filing StatusSurviving Spouse Filing Status

• Same tax rate brackets as married, filing jointly

• File as surviving spouse for 2 years after death of spouse if taxpayer maintains a home in which a dependent child lives

• Same tax rate brackets as married, filing jointly

• File as surviving spouse for 2 years after death of spouse if taxpayer maintains a home in which a dependent child lives


Married Filing Separately Filing StatusMarried Filing Separately Filing Status

• Married but not filing a return with spouse and not abandoned spouse

• Married but not filing a return with spouse and not abandoned spouse


Head of Household (HH) Filing StatusHead of Household (HH) Filing Status

• Must be unmarried as of end of year or an abandoned spouse

• Must pay > half the cost of maintaining a household which is the principal home of a dependent for more than half of tax year

• Must be unmarried as of end of year or an abandoned spouse

• Must pay > half the cost of maintaining a household which is the principal home of a dependent for more than half of tax year


Abandoned SpouseAbandoned Spouse

• Allows married taxpayer to file as Head of Household if taxpayer:

– Does not file a joint return– Paid > half the cost of maintaining a home– Spouse did not live in home during last 6

months of tax year– Home was principal residence of taxpayer’s

child for > half of year– Can claim child as a dependent

• Allows married taxpayer to file as Head of Household if taxpayer:

– Does not file a joint return– Paid > half the cost of maintaining a home– Spouse did not live in home during last 6

months of tax year– Home was principal residence of taxpayer’s

child for > half of year– Can claim child as a dependent


Tax RatesTax Rates

• Prior to recent legislation, tax rates were 15%, 28%, 31%, 36%, and 39.6%

• Effective January 1, 2003 – Tax rates are 10%, 15%, 25%, 28%, 33%, and

35%

• Prior to recent legislation, tax rates were 15%, 28%, 31%, 36%, and 39.6%

• Effective January 1, 2003 – Tax rates are 10%, 15%, 25%, 28%, 33%, and

35%


Kiddie Tax (slide 1 of 4)Kiddie Tax (slide 1 of 4)

• Net unearned income (NUI) of child is taxed at parents’ rate– Child must be under age 18 at end of year– NUI generally equals unearned income less

$1,900 (2009 tax year)

• Net unearned income (NUI) of child is taxed at parents’ rate– Child must be under age 18 at end of year– NUI generally equals unearned income less

$1,900 (2009 tax year)



• Unearned income includes:– Taxable interest– Dividends– Capital gains– Rents– Royalties– Pension and annuity income, and – Unearned income from trusts

• Unearned income includes:– Taxable interest– Dividends– Capital gains– Rents– Royalties– Pension and annuity income, and – Unearned income from trusts



• Computing NUI for Kiddie Tax for 2009:Unearned income

Less: $950

Less: The greater of:

i) $950, or

ii) Allowable itemized deductions connected with production of unearned income

Equals: net unearned income

• Computing NUI for Kiddie Tax for 2009:Unearned income

Less: $950

Less: The greater of:

i) $950, or

ii) Allowable itemized deductions connected with production of unearned income

Equals: net unearned income



• Net unearned income taxed at parents’ rate– Remainder of taxable income taxed at child’s rate

• Two options for computing the tax – A separate return may be filed for the child

• The tax on net unearned income (referred to as the allocable parental tax) is computed as though the income had been included on the parents’ return

– Form 8615 is used to compute the tax

– The parents may elect to report child’s income on their own return

• Certain requirements must be met

• Net unearned income taxed at parents’ rate– Remainder of taxable income taxed at child’s rate

• Two options for computing the tax – A separate return may be filed for the child

• The tax on net unearned income (referred to as the allocable parental tax) is computed as though the income had been included on the parents’ return

– Form 8615 is used to compute the tax

– The parents may elect to report child’s income on their own return

• Certain requirements must be met


Alimony and Separate Maintenance Payments (slide 1 of 3)


• Alimony is:– Deductible by payor– Includible in gross income of recipient

• Alimony is:– Deductible by payor– Includible in gross income of recipient




• Property settlements– Transfer of property to former spouse– No deduction or recognized gain or loss for

payor– No gross income and carryover of payor’s

basis for recipient

• Property settlements– Transfer of property to former spouse– No deduction or recognized gain or loss for

payor– No gross income and carryover of payor’s

basis for recipient




• Child support payments– Payments made to satisfy legal obligation to support

child of taxpayer– Nondeductible by payor and not taxed to recipient (or

child)

• May be difficult to determine whether an amount received is alimony or child support– If amount of payment would be reduced due to some

future event related to the child (e.g., child reaches age 21), such reduction is deemed child support

• Child support payments– Payments made to satisfy legal obligation to support

child of taxpayer– Nondeductible by payor and not taxed to recipient (or

child)

• May be difficult to determine whether an amount received is alimony or child support– If amount of payment would be reduced due to some

future event related to the child (e.g., child reaches age 21), such reduction is deemed child support


Prizes and AwardsPrizes and Awards

• General rule: FMV of item is included in income

• Exceptions:• Taxpayer designates qualified organization to

receive prize or award (subject to other requirements)

• Employee achievement awards of tangible personal property made in recognition of length of service or safety achievement

• General rule: FMV of item is included in income

• Exceptions:• Taxpayer designates qualified organization to

receive prize or award (subject to other requirements)

• Employee achievement awards of tangible personal property made in recognition of length of service or safety achievement


Unemployment CompensationUnemployment Compensation

• Prior to 2009, unemployment compensation was taxable in full

• Under ARRTA of 2009 the first $2,400 of unemployment compensation is excluded from gross income– This relief from taxation is limited to 2009

• Prior to 2009, unemployment compensation was taxable in full

• Under ARRTA of 2009 the first $2,400 of unemployment compensation is excluded from gross income– This relief from taxation is limited to 2009


Social Security BenefitsSocial Security Benefits

• 50% to 85% of benefits may be taxable

• Taxability is based on taxpayer’s modified adjusted gross income (MAGI)

• 50% to 85% of benefits may be taxable

• Taxability is based on taxpayer’s modified adjusted gross income (MAGI)


Gifts and Inheritances (slide 1 of 3)


• Gifts are nontaxable to donee if:– Transfer is voluntary without adequate

consideration, and– Made because of affection, respect, admiration,

charity, or donative intent

• Gifts are nontaxable to donee if:– Transfer is voluntary without adequate

consideration, and– Made because of affection, respect, admiration,

charity, or donative intent




• Inheritances are nontaxable to beneficiary

• Income earned on gifts or inheritances is taxable under normal rules– Example: Father gifts corporate bond to

daughter. Gift is excluded from daughter’s gross income, but interest income earned after gift date is taxable to her.

• Inheritances are nontaxable to beneficiary

• Income earned on gifts or inheritances is taxable under normal rules– Example: Father gifts corporate bond to

daughter. Gift is excluded from daughter’s gross income, but interest income earned after gift date is taxable to her.




• Transfers by employers to employees do not qualify as excludible gifts– May be excludible under other provisions, e.g.,

employee achievement awards

• Transfers by employers to employees do not qualify as excludible gifts– May be excludible under other provisions, e.g.,

employee achievement awards


Scholarships and FellowshipsScholarships and Fellowships

• An amount paid to or for the benefit of a student to aid in pursuing a degree at an educational institution– Nontaxable to extent of tuition and related

expenses (e.g., fees, books, supplies, and equipment required for courses)

• Amounts received for room and board are taxable

• An amount paid to or for the benefit of a student to aid in pursuing a degree at an educational institution– Nontaxable to extent of tuition and related

expenses (e.g., fees, books, supplies, and equipment required for courses)

• Amounts received for room and board are taxable


Damages (slide 1 of 3)Damages (slide 1 of 3)

• Tax consequences of receipt of damages– Depends on type of harm taxpayer experienced– The taxpayer may seek damages for:

• Loss of income

• Expenses incurred

• Property destroyed

• Personal injury

• Tax consequences of receipt of damages– Depends on type of harm taxpayer experienced– The taxpayer may seek damages for:

• Loss of income

• Expenses incurred

• Property destroyed

• Personal injury



• Tax treatment of damages received for: – Loss of income

• Generally, taxed the same as the income replaced– Exceptions exist related to personal injury

– Reimbursement for expenses incurred• Not income, unless the expense was deducted

– Damages that are a recovery of the taxpayer’s previously deducted expenses are generally taxable under the tax benefit rule

• Tax treatment of damages received for: – Loss of income

• Generally, taxed the same as the income replaced– Exceptions exist related to personal injury

– Reimbursement for expenses incurred• Not income, unless the expense was deducted

– Damages that are a recovery of the taxpayer’s previously deducted expenses are generally taxable under the tax benefit rule



• Tax treatment of damages received for: – Property destroyed

• Treated as an amount received in a sale or exchange of the property

– Thus, taxpayer has realized gain if damage payments exceed property’s basis

– Personal injury• Receives special treatment

• Tax treatment of damages received for: – Property destroyed

• Treated as an amount received in a sale or exchange of the property

– Thus, taxpayer has realized gain if damage payments exceed property’s basis

– Personal injury• Receives special treatment


Compensation for Injuries and Sickness (slide 1 of 3)


• Personal injury damages– Compensatory damages received on account of

physical personal injury or physical illness are excludible

• Includes amounts received for loss of income associated with the physical personal injury or physical sickness

– All other personal injury damages are taxable• Compensatory damages for nonphysical injury• All punitive damages

• Personal injury damages– Compensatory damages received on account of

physical personal injury or physical illness are excludible

• Includes amounts received for loss of income associated with the physical personal injury or physical sickness

– All other personal injury damages are taxable• Compensatory damages for nonphysical injury• All punitive damages




• Workers’ compensation– Although may be payment for loss of wages,

workers’ compensation is specifically excluded from gross income

• Workers’ compensation– Although may be payment for loss of wages,

workers’ compensation is specifically excluded from gross income




• Accident and health insurance benefits– Benefits received under policy purchased by

taxpayer are excludible• Even if benefits are substitute for income

– Different rules apply if the accident and health insurance protection was purchased by the individual’s employer

• Accident and health insurance benefits– Benefits received under policy purchased by

taxpayer are excludible• Even if benefits are substitute for income

– Different rules apply if the accident and health insurance protection was purchased by the individual’s employer


Educational Savings BondsEducational Savings Bonds

• Interest on Series EE U.S. Savings Bonds may be excluded from income if:– Proceeds used to pay for qualified higher

educational expenses– Bonds issued after 12/31/89, and– Bonds issued to person at least 24 years old

• Exclusion is phased-out once modified AGI exceeds threshold amount

• Interest on Series EE U.S. Savings Bonds may be excluded from income if:– Proceeds used to pay for qualified higher

educational expenses– Bonds issued after 12/31/89, and– Bonds issued to person at least 24 years old

• Exclusion is phased-out once modified AGI exceeds threshold amount


Itemized Deductions(slide 1 of 2)


• Personal expenditures that are deductible from AGI as itemized deductions include: – Medical expenses– Taxes– Interest– Charitable Contributions– Miscellaneous itemized deductions

• Personal expenditures that are deductible from AGI as itemized deductions include: – Medical expenses– Taxes– Interest– Charitable Contributions– Miscellaneous itemized deductions




• Itemized deductions provide a tax benefit only to extent that, in total, they exceed the standard deduction amount for the taxpayer

• Itemized deductions provide a tax benefit only to extent that, in total, they exceed the standard deduction amount for the taxpayer


Medical Expenses (slide 1 of 6)


• Expenditures for the diagnosis, cure, mitigation, treatment, prevention of disease, or for purpose of affecting any structure or function of the body of the taxpayer, spouse, or dependents– Includes prescription drugs and insulin

• Expenditures for the diagnosis, cure, mitigation, treatment, prevention of disease, or for purpose of affecting any structure or function of the body of the taxpayer, spouse, or dependents– Includes prescription drugs and insulin




• Does not include the cost of items such as :– Elective cosmetic surgery– General health items– Nonprescription drugs

• Does not include the cost of items such as :– Elective cosmetic surgery– General health items– Nonprescription drugs




• Medical expenditures are deductible in year paid – Includes payment by check or credit card

• Medical expenditures are deductible in year paid – Includes payment by check or credit card




• Medical expenses are deductible to the extent unreimbursed medical expenses, in total, exceed 7.5% of AGI

• Medical expenses are deductible to the extent unreimbursed medical expenses, in total, exceed 7.5% of AGI




• Example of medical expense deduction limitation:– Amy has AGI of $10,000 and medical expenses

of $1,000– Amy’s medical expense deduction = $250

[$1,000 – ($10,000 × 7.5%)]

• Example of medical expense deduction limitation:– Amy has AGI of $10,000 and medical expenses

of $1,000– Amy’s medical expense deduction = $250

[$1,000 – ($10,000 × 7.5%)]




• Example of medical expense deduction limitation:– Bob has AGI of $4,000 and medical expenses

of $1,000– Bob’s medical expense deduction = $700

[$1,000 – ($4,000 × 7.5%)]

• Example of medical expense deduction limitation:– Bob has AGI of $4,000 and medical expenses

of $1,000– Bob’s medical expense deduction = $700

[$1,000 – ($4,000 × 7.5%)]


Nursing Home ExpendituresNursing Home Expenditures

• If primary reason for being in nursing home is medical, costs (including meals and lodging) qualify

• If primary purpose of placement in home is personal, only specific medical costs qualify (no meals or lodging)

• If primary reason for being in nursing home is medical, costs (including meals and lodging) qualify

• If primary purpose of placement in home is personal, only specific medical costs qualify (no meals or lodging)


Capital Medical ExpendituresCapital Medical Expenditures

• May include a pool, air conditioners if they do not become permanent improvements, dust elimination systems, elevators, etc.

• Must be medical necessity, advised by a physician, used primarily by patient, and expense is reasonable

• Full amount of cost is medical expense in year paid

• Maintenance on capital expenditures also medical expense

• May include a pool, air conditioners if they do not become permanent improvements, dust elimination systems, elevators, etc.

• Must be medical necessity, advised by a physician, used primarily by patient, and expense is reasonable

• Full amount of cost is medical expense in year paid

• Maintenance on capital expenditures also medical expense


Capital Improvement to HomeCapital Improvement to Home

• Deductible medical expense only to extent that cost of improvement exceeds increase in value of home– Exception: removal of structural barriers to

home of handicapped are deemed to add no value to home. Thus, full amount is a medical expense.

• Deductible medical expense only to extent that cost of improvement exceeds increase in value of home– Exception: removal of structural barriers to

home of handicapped are deemed to add no value to home. Thus, full amount is a medical expense.


Medical Care of Spouse and Dependents

Medical Care of Spouse and Dependents

• Taxpayer may deduct cost of medical care for spouse and dependents– Dependents need not meet gross income or

joint return tests– Medical expenses of children of divorced

parents can be deducted by non-custodial parent even though child is dependent of custodial parent

• Taxpayer may deduct cost of medical care for spouse and dependents– Dependents need not meet gross income or

joint return tests– Medical expenses of children of divorced

parents can be deducted by non-custodial parent even though child is dependent of custodial parent


Health Insurance PremiumsHealth Insurance Premiums

• Premiums paid for medical care insurance are deductible medical expenses

• For self-employed, 100% of insurance premiums are deductible for AGI

• Premiums paid for medical care insurance are deductible medical expenses

• For self-employed, 100% of insurance premiums are deductible for AGI


Health Savings AccountsHealth Savings Accounts

• Used in conjunction with a high deductible medical insurance policy– Employee contributions to HSA are deductible for AGI

and earnings on funds in account are not taxable – Deductible contributions are limited to the sum of the

monthly limitations. The monthly deductible amount is limited to the lesser of one twelfth of:

• The annual deductible under a high deductible plan or • $3,000 for self-only ($5,950 for family coverage) in 2009

– Withdrawals from HSA are excludible to the extent used for qualified medical expenses

• Used in conjunction with a high deductible medical insurance policy– Employee contributions to HSA are deductible for AGI

and earnings on funds in account are not taxable – Deductible contributions are limited to the sum of the

monthly limitations. The monthly deductible amount is limited to the lesser of one twelfth of:

• The annual deductible under a high deductible plan or • $3,000 for self-only ($5,950 for family coverage) in 2009

– Withdrawals from HSA are excludible to the extent used for qualified medical expenses


Taxes(slide 1 of 4)

Taxes(slide 1 of 4)

• State, local, and foreign income and real property taxes are deductible in the year paid

• State and local personal property taxes based on value (ad valorem) are deductible in the year paid

• State, local, and foreign income and real property taxes are deductible in the year paid

• State and local personal property taxes based on value (ad valorem) are deductible in the year paid


Taxes(slide 2 of 4)

Taxes(slide 2 of 4)

• Other taxes such as FICA, excise, etc., are not deductible– May be deductible if incurred in business or

production of income activity

• Fees are not deductible as tax

• Other taxes such as FICA, excise, etc., are not deductible– May be deductible if incurred in business or

production of income activity

• Fees are not deductible as tax


Taxes(slide 3 of 4)

Taxes(slide 3 of 4)

• A new provision allows homeowners to deduct their real estate taxes even if they do not itemize– Applies to 2008 and 2009 income tax returns– Property tax paid is treated as an additional standard

deduction amount• Limited to $1,000 for married couples filing jointly and $500

for other filers

• Real estate taxes for year property is sold must be apportioned between the buyer and the seller– Failure to correctly apportion requires offsetting

adjustments to seller’s amount realized and buyer’s adjusted basis

• A new provision allows homeowners to deduct their real estate taxes even if they do not itemize– Applies to 2008 and 2009 income tax returns– Property tax paid is treated as an additional standard

deduction amount• Limited to $1,000 for married couples filing jointly and $500

for other filers

• Real estate taxes for year property is sold must be apportioned between the buyer and the seller– Failure to correctly apportion requires offsetting

adjustments to seller’s amount realized and buyer’s adjusted basis


Taxes(slide 4 of 4)

Taxes(slide 4 of 4)

• Can elect to deduct either state & local income taxes or sales/use taxes– For state and local income taxes, deduct amounts paid during year:

• Amounts withheld• Estimated tax payments• Amounts paid in current year for prior year’s liability

– For sales/use taxes, deduct either:• Actual sales/use tax payments or • Amount from an IRS table

– Table amount may be increased by sales tax paid on certain specific items (e.g., Purchase of motor vehicles, boats, etc.)

• If deduction is taken for sales/use taxes paid rather than state income taxes, the new standard deduction for qualified motor vehicle taxes allowed under ARRTA of 2009 may not also be taken

• Can elect to deduct either state & local income taxes or sales/use taxes– For state and local income taxes, deduct amounts paid during year:

• Amounts withheld• Estimated tax payments• Amounts paid in current year for prior year’s liability

– For sales/use taxes, deduct either:• Actual sales/use tax payments or • Amount from an IRS table

– Table amount may be increased by sales tax paid on certain specific items (e.g., Purchase of motor vehicles, boats, etc.)

• If deduction is taken for sales/use taxes paid rather than state income taxes, the new standard deduction for qualified motor vehicle taxes allowed under ARRTA of 2009 may not also be taken


Interest ExpenseInterest Expense

• Deduction of interest expense is limited to:– Interest on qualified student loans– Investment interest – Qualified residence (home mortgage) interest– Business interest

• Personal interest expense is not deductible

• Deduction of interest expense is limited to:– Interest on qualified student loans– Investment interest – Qualified residence (home mortgage) interest– Business interest

• Personal interest expense is not deductible


Interest on Qualified Education Loans

Interest on Qualified Education Loans

• Deductible for AGI, subject to limits– Maximum deduction is $2,500 per year – Deduction is phased out for taxpayers with

modified AGI (MAGI) between $60,000 and $75,000 ($120,000 and $150,000 on joint returns)

– Not allowed for those claimed as a dependent or for married filing separate returns

• Deductible for AGI, subject to limits– Maximum deduction is $2,500 per year – Deduction is phased out for taxpayers with

modified AGI (MAGI) between $60,000 and $75,000 ($120,000 and $150,000 on joint returns)

– Not allowed for those claimed as a dependent or for married filing separate returns


Investment Interest(slide 1 of 5)


• Investment interest on loans whose proceeds are used to purchase investment property may be deductible– e.g., Investment property may include stock, bonds, and

land held for investment• Deduction of investment interest expense is

limited to net investment income

• Investment interest on loans whose proceeds are used to purchase investment property may be deductible– e.g., Investment property may include stock, bonds, and

land held for investment• Deduction of investment interest expense is

limited to net investment income




• Net investment income:– Investment income less investment expenses

• Net investment income:– Investment income less investment expenses




• Investment income:– Gross income from interest, dividends,

annuities, and royalties not derived from business

– Net capital gains and qualified dividends are treated as investment income only if elected

• Amount elected as investment income is not eligible for the 15%/0% rates that otherwise apply to net capital gain and qualifying dividends

• Investment income:– Gross income from interest, dividends,

annuities, and royalties not derived from business

– Net capital gains and qualified dividends are treated as investment income only if elected

• Amount elected as investment income is not eligible for the 15%/0% rates that otherwise apply to net capital gain and qualifying dividends




• Investment expenses:– All expenses (other than interest) directly

related to investment income that are allowed as a deduction

– Application of 2% AGI floor for some investment expenses must be considered in computing amount of net investment income

• Investment expenses:– All expenses (other than interest) directly

related to investment income that are allowed as a deduction

– Application of 2% AGI floor for some investment expenses must be considered in computing amount of net investment income




• Investment interest not used in current year due to limitation is carried forward to future years until ultimately used– Deductibility subject to net investment income

limitation in carryover years

• Investment interest not used in current year due to limitation is carried forward to future years until ultimately used– Deductibility subject to net investment income

limitation in carryover years


Qualified Residence Interest (slide 1 of 4)


• Interest on indebtedness secured by the principal residence and one other residence (qualified residences)

• Interest must be on acquisition or home equity indebtedness

• Interest on indebtedness secured by the principal residence and one other residence (qualified residences)

• Interest must be on acquisition or home equity indebtedness




• Acquisition indebtedness: amounts incurred to acquire, construct, or substantially improve the qualified residences– Interest paid on aggregate acquisition

indebtedness of $1 million or less ($500,000 for married filing separate) is deductible as qualified residence interest

• Acquisition indebtedness: amounts incurred to acquire, construct, or substantially improve the qualified residences– Interest paid on aggregate acquisition

indebtedness of $1 million or less ($500,000 for married filing separate) is deductible as qualified residence interest




• Home equity indebtedness: loans secured by qualified residences

• Interest is deductible only on portion of home equity loan that does not exceed the lesser of:– $100,000 ($50,000 for married, filing separate),

or– FMV of home - acquisition indebtedness

• Home equity indebtedness: loans secured by qualified residences

• Interest is deductible only on portion of home equity loan that does not exceed the lesser of:– $100,000 ($50,000 for married, filing separate),

or– FMV of home - acquisition indebtedness




• Thus, maximum loans on qualified residences that will produce qualified residence interest is $1.1 million

• Interest on mortgage debt exceeding $1.1 million or on mortgage debt relating to nonqualified residence (e.g., second vacation home) is nondeductible personal interest

• Thus, maximum loans on qualified residences that will produce qualified residence interest is $1.1 million

• Interest on mortgage debt exceeding $1.1 million or on mortgage debt relating to nonqualified residence (e.g., second vacation home) is nondeductible personal interest


Interest Paid for Services(slide 1 of 2)


• “Points” paid for the use or forbearance of money qualify as deductible interest– Cannot be a service charge if they are to qualify

as deductible interest

• Points generally must be capitalized and amortized over the life of loan

• “Points” paid for the use or forbearance of money qualify as deductible interest– Cannot be a service charge if they are to qualify

as deductible interest

• Points generally must be capitalized and amortized over the life of loan




• Exception: Points paid in the acquisition or improvement of personal residence– Entire amount of such points are deductible in

the year paid– Points paid to refinance an existing home

mortgage must be capitalized and amortized over the life of the new loan

• Exception: Points paid in the acquisition or improvement of personal residence– Entire amount of such points are deductible in

the year paid– Points paid to refinance an existing home

mortgage must be capitalized and amortized over the life of the new loan


Mortgage Insurance PaymentsMortgage Insurance Payments

• Mortgage insurance premiums are deductible as interest if they relate to a qualified residence of the taxpayer– The deduction begins to phase out for taxpayers

with AGI in excess of $100,000 ($50,000 for married taxpayers filing separately)

• Mortgage insurance premiums are deductible as interest if they relate to a qualified residence of the taxpayer– The deduction begins to phase out for taxpayers

with AGI in excess of $100,000 ($50,000 for married taxpayers filing separately)


Classification of Interest ExpenseClassification of Interest Expense

• Whether interest is deductible for AGI or as an itemized deduction (from AGI) depends on purpose of indebtedness – If related to a business or the production of rent or

royalty income• Interest is deductible for AGI

– If incurred for personal use, such as qualified residence interest

• Deduction is reported on Schedule A, Form 1040 if taxpayer itemizes

• However, interest on a student loan is a deduction for AGI– If the taxpayer incurs debt in relation to his or her

employment• Interest is considered to be personal, or consumer, interest

• Whether interest is deductible for AGI or as an itemized deduction (from AGI) depends on purpose of indebtedness – If related to a business or the production of rent or

royalty income• Interest is deductible for AGI

– If incurred for personal use, such as qualified residence interest

• Deduction is reported on Schedule A, Form 1040 if taxpayer itemizes

• However, interest on a student loan is a deduction for AGI– If the taxpayer incurs debt in relation to his or her

employment• Interest is considered to be personal, or consumer, interest


Charitable Contributions(slide 1 of 3)


• Individuals and corporations may deduct contributions made to qualified domestic organizations

• Contributor must have donative intent and expect nothing in return– If contributor receives tangible benefit, the

FMV of such benefit must be deducted from the amount of the contribution

• Individuals and corporations may deduct contributions made to qualified domestic organizations

• Contributor must have donative intent and expect nothing in return– If contributor receives tangible benefit, the

FMV of such benefit must be deducted from the amount of the contribution




• Exception to tangible benefit rule– Allows deduction of 80% of amount paid for

the right to purchase athletic tickets from colleges and universities

• Exception to tangible benefit rule– Allows deduction of 80% of amount paid for

the right to purchase athletic tickets from colleges and universities




• Contribution must be to qualified domestic nonprofit organization or state or possession of U.S. or any subdivisions thereof– Many(but not all) qualified domestic charities

are listed in IRS Publication #78

• Contribution must be to qualified domestic nonprofit organization or state or possession of U.S. or any subdivisions thereof– Many(but not all) qualified domestic charities

are listed in IRS Publication #78


Contribution of ServicesContribution of Services

• No deduction is allowed for the contribution of services– Unreimbursed expenses related to the services are

deductible

– Out-of-pocket transportation costs or a standard mileage rate of 14 cents per mile are deductible

– Deductions are also permitted for transportation, reasonable expenses for lodging, and the cost of meals while away from home incurred in performing the donated services

• No deduction is allowed for the contribution of services– Unreimbursed expenses related to the services are

deductible

– Out-of-pocket transportation costs or a standard mileage rate of 14 cents per mile are deductible

– Deductions are also permitted for transportation, reasonable expenses for lodging, and the cost of meals while away from home incurred in performing the donated services


Nondeductible ItemsNondeductible Items

• The following items may not be deducted as charitable contributions:– Dues, fees, or bills paid to country clubs, lodges,

fraternal orders, or similar groups– Cost of raffle, bingo, or lottery tickets– Cost of tuition– Value of blood given to a blood bank– Donations to homeowners associations– Gifts to individuals– Rental value of property used by a qualified charity

• The following items may not be deducted as charitable contributions:– Dues, fees, or bills paid to country clubs, lodges,

fraternal orders, or similar groups– Cost of raffle, bingo, or lottery tickets– Cost of tuition– Value of blood given to a blood bank– Donations to homeowners associations– Gifts to individuals– Rental value of property used by a qualified charity


Record-Keeping RequirementsRecord-Keeping Requirements

• No deduction is allowed for charitable contributions unless the taxpayer has appropriate documentation and substantiation– The specific type of documentation required depends on

the amount of the contribution and whether the contribution is made in cash or noncash property

– Special rules may apply to gifts of certain types of property (e.g., used automobiles) where Congress has noted taxpayer abuse in the past

• No deduction is allowed for charitable contributions unless the taxpayer has appropriate documentation and substantiation– The specific type of documentation required depends on

the amount of the contribution and whether the contribution is made in cash or noncash property

– Special rules may apply to gifts of certain types of property (e.g., used automobiles) where Congress has noted taxpayer abuse in the past


Ordinary Income PropertyOrdinary Income Property

• Defined: assets that would produce ordinary income or short-term capital gain if sold

• Contribution amount– FMV of asset less ordinary income (or STCG)

potential; generally the lower of adjusted basis or FMV

• Defined: assets that would produce ordinary income or short-term capital gain if sold

• Contribution amount– FMV of asset less ordinary income (or STCG)

potential; generally the lower of adjusted basis or FMV


Capital Gain PropertyCapital Gain Property

• Defined: assets that would produce long-term capital gain or Section 1231 gain if sold

• Contribution amount– Generally FMV of asset

• Defined: assets that would produce long-term capital gain or Section 1231 gain if sold

• Contribution amount– Generally FMV of asset


Charitable ContributionLimitations (slide 1 of 4)


• 50% limit– In no case can the charitable contribution

deduction for a year exceed 50% of the taxpayer’s AGI

– Contributions of cash, ordinary income property, and certain capital gain property (where the contribution amount is adjusted basis) are subject to the 50% limit (50% assets)

• 50% limit– In no case can the charitable contribution

deduction for a year exceed 50% of the taxpayer’s AGI

– Contributions of cash, ordinary income property, and certain capital gain property (where the contribution amount is adjusted basis) are subject to the 50% limit (50% assets)




• 30% limit– Charitable contribution deduction for certain

assets cannot exceed 30% of the taxpayer’s AGI• Applies to 30% assets which are:

– Capital gain property for which the contribution amount is FMV

– Certain contributions to private nonoperating foundations

• 30% limit– Charitable contribution deduction for certain

assets cannot exceed 30% of the taxpayer’s AGI• Applies to 30% assets which are:

– Capital gain property for which the contribution amount is FMV

– Certain contributions to private nonoperating foundations




• 30% limit– Taxpayer can elect to treat capital gain property

as 50% assets by limiting the amount of such contributions to their adjusted bases

– Referred to as the reduced deduction election• Enables the taxpayer to move from the 30%

limitation to the 50% limitation

• 30% limit– Taxpayer can elect to treat capital gain property

as 50% assets by limiting the amount of such contributions to their adjusted bases

– Referred to as the reduced deduction election• Enables the taxpayer to move from the 30%

limitation to the 50% limitation




• 20% limit– Certain contributions of capital gain property to

private nonoperating foundations

• 20% limit– Certain contributions of capital gain property to

private nonoperating foundations


Charitable Contributions Carryover

Charitable Contributions Carryover

• Contributions that cannot be taken in current year due to limitations may be carried forward for 5 years– When using carryovers, current contributions

are used first, then carryovers used on a FIFO basis

• Contributions that cannot be taken in current year due to limitations may be carried forward for 5 years– When using carryovers, current contributions

are used first, then carryovers used on a FIFO basis


Example of Charitable Contribution AGI LimitsExample of Charitable

Contribution AGI Limits

• Taxpayer, AGI $100,000, contributed $40,000 cash and long-term stocks with a FMV of $35,000 and a basis of $8,000 to a University

• 50% limit = $50,000 30% limit = $30,000– Amount of deduction = $50,000 (40,000 cash + 10,000

stock)

– Contribution carryforward = $25,000 stock (as 30% asset)

• Taxpayer, AGI $100,000, contributed $40,000 cash and long-term stocks with a FMV of $35,000 and a basis of $8,000 to a University

• 50% limit = $50,000 30% limit = $30,000– Amount of deduction = $50,000 (40,000 cash + 10,000

stock)

– Contribution carryforward = $25,000 stock (as 30% asset)


Miscellaneous Itemized Deductions

Miscellaneous Itemized Deductions

• Some expenditures are deductible only to the extent they exceed 2% of AGI

• Examples include:– Professional dues– Uniforms– Tax return prep fees– Job-hunting costs– Certain investment expenses– Hobby losses– Unreimbursed employee expenses

• Some expenditures are deductible only to the extent they exceed 2% of AGI

• Examples include:– Professional dues– Uniforms– Tax return prep fees– Job-hunting costs– Certain investment expenses– Hobby losses– Unreimbursed employee expenses


Misc. Itemized Deductions Not Subject to 2% of AGI Floor

Misc. Itemized Deductions Not Subject to 2% of AGI Floor

• Examples include:– Gambling losses to the extent of gambling winnings

– Impairment-related work expenses of a handicapped person

– Deduction for repayment of amounts under a claim of right if more than $3,000

– Unrecovered investment in a annuity contract when annuity ceases by reason of death

• Examples include:– Gambling losses to the extent of gambling winnings

– Impairment-related work expenses of a handicapped person

– Deduction for repayment of amounts under a claim of right if more than $3,000

– Unrecovered investment in a annuity contract when annuity ceases by reason of death


Overall Limitation on Itemized Deductions (slide 1 of 3)


• Taxpayers with AGI in excess of the specified threshold will lose part of their benefits from certain itemized deductions– Threshold amount in 2009 is $166,800

($83,400 if married, filing separately)

• Taxpayers with AGI in excess of the specified threshold will lose part of their benefits from certain itemized deductions– Threshold amount in 2009 is $166,800

($83,400 if married, filing separately)




• Itemized deductions subject to possible reduction include:– Taxes, home mortgage interest, charitable

contributions, and miscellaneous itemized deductions subject to the 2% of AGI floor

• Medical, investment interest, casualty & theft losses, and gambling losses are not subject to reduction

• Itemized deductions subject to possible reduction include:– Taxes, home mortgage interest, charitable

contributions, and miscellaneous itemized deductions subject to the 2% of AGI floor

• Medical, investment interest, casualty & theft losses, and gambling losses are not subject to reduction




• This overall limitation is being phased out over a four-year period, beginning in 2006

• Limitation is calculated using a 2-step process• Step 1: Amount of reduction is lesser of:

• (AGI – threshold) × 3%, or• 80% × total itemized deductions subject to reduction

• Step 2: Multiply the amount computed in Step 1 by the fraction that applies to the tax year involved– For 2006 and 2007: phaseout equals 2/3 of the Step 1 amount– For 2008 and 2009: phaseout equals 1/3 of the Step 1 amount

• This overall limitation is being phased out over a four-year period, beginning in 2006

• Limitation is calculated using a 2-step process• Step 1: Amount of reduction is lesser of:

• (AGI – threshold) × 3%, or• 80% × total itemized deductions subject to reduction

• Step 2: Multiply the amount computed in Step 1 by the fraction that applies to the tax year involved– For 2006 and 2007: phaseout equals 2/3 of the Step 1 amount– For 2008 and 2009: phaseout equals 1/3 of the Step 1 amount


Adoption Expenses Credit (slide 1 of 2)


• Credit for qualified adoption expenses incurred in adoption of eligible child– Examples of expenses: adoption fees, court

costs, attorney fees

• Maximum credit is $12,150 (in 2009) – Credit is phased-out ratably for modified AGI

between $182,180 and $222,180

• Credit for qualified adoption expenses incurred in adoption of eligible child– Examples of expenses: adoption fees, court

costs, attorney fees

• Maximum credit is $12,150 (in 2009) – Credit is phased-out ratably for modified AGI

between $182,180 and $222,180




• Eligible child is one that is – Less than 18 years of age, or– Physically or mentally handicapped

• Nonrefundable credit– Excess may be carried forward for five years

• Married taxpayers must file jointly to claim

• Eligible child is one that is – Less than 18 years of age, or– Physically or mentally handicapped

• Nonrefundable credit– Excess may be carried forward for five years

• Married taxpayers must file jointly to claim


Child Tax Credit (slide 1 of 2)


• Credit amount is $1,000 per child

• Eligible children are:– Under age 17,– US citizen, and– Claimed as dependent on taxpayer’s tax return

• Credit amount is $1,000 per child

• Eligible children are:– Under age 17,– US citizen, and– Claimed as dependent on taxpayer’s tax return




• Credit is phased out by $50 for each $1,000 of AGI above specified levels– $110,000 for joint filers– $55,000 for married filing separately– $75,000 for single

• Credit is phased out by $50 for each $1,000 of AGI above specified levels– $110,000 for joint filers– $55,000 for married filing separately– $75,000 for single


Child and Dependent Care Credit

(slide 1 of 4)


(slide 1 of 4)

• General qualifications for credit– Must have employment related care costs for a

• Dependent under age 13, or

• Dependent or spouse who is physically or mentally incapacitated and who lives with the taxpayer for more than one-half of the year

• General qualifications for credit– Must have employment related care costs for a

• Dependent under age 13, or

• Dependent or spouse who is physically or mentally incapacitated and who lives with the taxpayer for more than one-half of the year



(slide 2 of 4)


(slide 2 of 4)

• Credit amount– Eligible care costs x applicable percentage– Applicable percentage ranges from 20% to 35%

depending on AGI

• Married taxpayers must file a joint return to obtain credit

• Credit amount– Eligible care costs x applicable percentage– Applicable percentage ranges from 20% to 35%

depending on AGI

• Married taxpayers must file a joint return to obtain credit



(slide 3 of 4)


(slide 3 of 4)

• Eligible care costs defined– Costs for care of qualified individual within

taxpayer’s home or outside home• If outside home, handicapped dependent or spouse

must spend at least 8 hours a day within taxpayer’s home

– Amount of costs that qualify is the lesser of actual costs or $3,000 for one qualified individual, and $6,000 for two or more qualified individuals

• Eligible care costs defined– Costs for care of qualified individual within

taxpayer’s home or outside home• If outside home, handicapped dependent or spouse

must spend at least 8 hours a day within taxpayer’s home

– Amount of costs that qualify is the lesser of actual costs or $3,000 for one qualified individual, and $6,000 for two or more qualified individuals



(slide 4 of 4)


(slide 4 of 4)

• Earned income limitation– Amount of eligible care costs cannot exceed

lower of taxpayer’s or spouse’s earned income– Full-time student or disabled taxpayer or

spouse are deemed to have earned income up to maximum per month limits

• Earned income limitation– Amount of eligible care costs cannot exceed

lower of taxpayer’s or spouse’s earned income– Full-time student or disabled taxpayer or

spouse are deemed to have earned income up to maximum per month limits


Education Tax Credits(slide 1 of 5)


• 2 education tax credits are available– American Opportunity credit (previously known as the

Hope scholarship credit)– Lifetime learning credit

• Both nonrefundable credits are available for qualifying tuition and related expenses– Books and other course materials are eligible for the

American Opportunity credit (but not the lifetime learning credit)

– Room and board are ineligible for both credits

• 2 education tax credits are available– American Opportunity credit (previously known as the

Hope scholarship credit)– Lifetime learning credit

• Both nonrefundable credits are available for qualifying tuition and related expenses– Books and other course materials are eligible for the

American Opportunity credit (but not the lifetime learning credit)

– Room and board are ineligible for both credits




• Maximum credits– American Opportunity credit maximum per eligible

student is $2,500 per year for first 4 years of postsecondary education

• 100% of the first $2,000 of tuition expenses plus 25% of the next $2,000 of tuition expenses

– Lifetime learning credit maximum per taxpayer is 20% of qualifying expenses (up to $10,000 per year in 2009)

• Cannot be claimed in same year the American Opportunity credit is claimed

• Maximum credits– American Opportunity credit maximum per eligible

student is $2,500 per year for first 4 years of postsecondary education

• 100% of the first $2,000 of tuition expenses plus 25% of the next $2,000 of tuition expenses

– Lifetime learning credit maximum per taxpayer is 20% of qualifying expenses (up to $10,000 per year in 2009)

• Cannot be claimed in same year the American Opportunity credit is claimed




• Eligible individuals include taxpayer, spouse, and taxpayer’s dependents

• To be eligible for American Opportunity credit, student must take at least 1/2 of full-time course load– No such requirement for lifetime learning credit

• Eligible individuals include taxpayer, spouse, and taxpayer’s dependents

• To be eligible for American Opportunity credit, student must take at least 1/2 of full-time course load– No such requirement for lifetime learning credit




• Both education credits are subject to income limitations, which differ for 2009 and 2010– In addition, 40% of the American Opportunity credit is refundable

and the entire credit allowed may be used to offset a taxpayer’s AMT liability

• The lifetime learning credit is neither refundable nor an AMT liability offset

• The American Opportunity credit is phased out, beginning when the taxpayer’s modified AGI reaches $80,000 ($160,000 for married taxpayers filing jointly)– The credit is completely eliminated when modified AGI reaches

$90,000 ($180,000 for married taxpayers filing jointly)

• Both education credits are subject to income limitations, which differ for 2009 and 2010– In addition, 40% of the American Opportunity credit is refundable

and the entire credit allowed may be used to offset a taxpayer’s AMT liability

• The lifetime learning credit is neither refundable nor an AMT liability offset

• The American Opportunity credit is phased out, beginning when the taxpayer’s modified AGI reaches $80,000 ($160,000 for married taxpayers filing jointly)– The credit is completely eliminated when modified AGI reaches

$90,000 ($180,000 for married taxpayers filing jointly)




• The lifetime learning credit amount is phased out when modified AGI reaches $50,000 ($100,000 for MFJ)– The credit is completely eliminated when AGI reaches

$60,000($120,000 for MFJ)

• Taxpayers are prohibited from receiving a double tax benefit associated with qualifying educational expenses– Can’t claim education credit and deduct the same expenses– Can’t claim the credit for amounts that are excluded from income

• e.g., scholarships, employer-paid educational assistance

– May claim an education tax credit and exclude from gross income amounts distributed from a Coverdell Education Savings Account as long as the distribution is not used for the same expenses for which the credit is claimed

• The lifetime learning credit amount is phased out when modified AGI reaches $50,000 ($100,000 for MFJ)– The credit is completely eliminated when AGI reaches

$60,000($120,000 for MFJ)

• Taxpayers are prohibited from receiving a double tax benefit associated with qualifying educational expenses– Can’t claim education credit and deduct the same expenses– Can’t claim the credit for amounts that are excluded from income

• e.g., scholarships, employer-paid educational assistance

– May claim an education tax credit and exclude from gross income amounts distributed from a Coverdell Education Savings Account as long as the distribution is not used for the same expenses for which the credit is claimed


Earned Income Credit (slide 1 of 3)


• General qualifications for credit– Must have earned income from being an

employee or self-employed – For 2009 and 2010, ARRTA of 2009 increases

• Credit percentage for families with three or more children, and

• Increases the phaseout threshold amounts for married taxpayers filing joint returns

• General qualifications for credit– Must have earned income from being an

employee or self-employed – For 2009 and 2010, ARRTA of 2009 increases

• Credit percentage for families with three or more children, and

• Increases the phaseout threshold amounts for married taxpayers filing joint returns




• Credit amount (2009 tax year)– Applicable percentage rate × earned income

• Rate and maximum amount of earned income determined by number of qualifying children

• Phase-out of credit begins when earned income (or AGI) exceeds $21,420 for MFJ with qualifying child ($16,420 for other taxpayers)

• Use IRS tables to calculate exact credit amount

• Credit amount (2009 tax year)– Applicable percentage rate × earned income

• Rate and maximum amount of earned income determined by number of qualifying children

• Phase-out of credit begins when earned income (or AGI) exceeds $21,420 for MFJ with qualifying child ($16,420 for other taxpayers)

• Use IRS tables to calculate exact credit amount




• Credit for taxpayers having no children– Taxpayers aged 25 through 64

• Credit amount for couple filing jointly with no qualifying children (2009 tax year)– 7.65% × earned income (up to $5,970)– Phase-out of credit begins when earned income

(or AGI) exceeds $12,470 for MFJ ($7,470 for others)

• Credit for taxpayers having no children– Taxpayers aged 25 through 64

• Credit amount for couple filing jointly with no qualifying children (2009 tax year)– 7.65% × earned income (up to $5,970)– Phase-out of credit begins when earned income

(or AGI) exceeds $12,470 for MFJ ($7,470 for others)


Recovery Rebate Credit (slide 1 of 2)Recovery Rebate Credit (slide 1 of 2)

• The Economic Stimulus Act of 2008 provides a refundable tax credit for certain taxpayers– The Treasury Department issued rebate checks

to taxpayers in the spring of 2008 to help stimulate the economy

• The credit includes two components—a basic credit and a qualifying child credit

• The Economic Stimulus Act of 2008 provides a refundable tax credit for certain taxpayers– The Treasury Department issued rebate checks

to taxpayers in the spring of 2008 to help stimulate the economy

• The credit includes two components—a basic credit and a qualifying child credit


Recovery Rebate Credit (slide 2 of 2)Recovery Rebate Credit (slide 2 of 2)

• Eligible individuals received a basic credit equal to the greater of:– The taxpayer’s net income tax liability up to a maximum of $600

($1,200 in the case of a joint return), or– $300 ($600 for joint returns) if the individual had:

• At least $3,000 of earned income (plus Social Security benefits), or• Net income tax liability of at least $1 and gross income greater than

the sum of the applicable basic standard deduction amount and one personal exemption (two personal exemptions for a joint return)

• If an individual is eligible for any amount of the basic credit, the individual also may have received a qualifying child credit of $300 for each qualifying child (defined in the same manner as for the child tax credit)

• Eligible individuals received a basic credit equal to the greater of:– The taxpayer’s net income tax liability up to a maximum of $600

($1,200 in the case of a joint return), or– $300 ($600 for joint returns) if the individual had:

• At least $3,000 of earned income (plus Social Security benefits), or• Net income tax liability of at least $1 and gross income greater than

the sum of the applicable basic standard deduction amount and one personal exemption (two personal exemptions for a joint return)

• If an individual is eligible for any amount of the basic credit, the individual also may have received a qualifying child credit of $300 for each qualifying child (defined in the same manner as for the child tax credit)


Making Work Pay CreditMaking Work Pay Credit

• In 2009 and 2010, the ARRTA of 2009 includes a refundable income tax credit of up to $400 ($800 for MFJ)– Calculated at a rate of 6.2% of earned income– Phases out at a rate of 2% of modified AGI

above $75,000 ($150,000 for MFJ)

• Most receive this refundable credit in their paychecks as a reduction in withholding

• In 2009 and 2010, the ARRTA of 2009 includes a refundable income tax credit of up to $400 ($800 for MFJ)– Calculated at a rate of 6.2% of earned income– Phases out at a rate of 2% of modified AGI

above $75,000 ($150,000 for MFJ)

• Most receive this refundable credit in their paychecks as a reduction in withholding


If you have any comments or suggestions concerning this PowerPoint Presentation for South-Western Federal Taxation, please contact:

Dr. Donald R. Trippeer, CPA [email protected]

SUNY Oneonta

If you have any comments or suggestions concerning this PowerPoint Presentation for South-Western Federal Taxation, please contact:

Dr. Donald R. Trippeer, CPA [email protected]

SUNY Oneonta

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