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Individual Tabs 1-17
Business Tabs 18-26
1 What’s New2 2021 Federal Tax Table & EIC Table3 1040 Line InstructionsFastTaxFacts: Dependents4 Itemized Deductions, A5 Sole Proprietorships and Farmers, C, F, SE6 Investment Income, B, D, 47977 Rental, Passive, and At-Risk, E8 Business Deductions9 Depreciation, 456210 Automobiles and Listed Property11 Tax Credits12 Children, College, and Family13 Retirement, Social Security, and Medicare14 Other 1040 Topics15 IRS, Penalties, and Audits16 Where to File and ToolsFastTaxFacts: 1099/W-2 Roadmap17 States
18 C Corporations, 112019 S Corporations, 1120S20 Partnerships and LLCs, 106521 Estates, Trusts, and Fiduciaries, 1041,706, 70922 Employee Benefits23 Payroll and Labor Laws, 940, 94124 Business Tools and Worksheets25 Other Business Topics26 What’s New Business
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Individual Forms: 1040, 2441, 4562, 4684, 4797, 6251, 8283, 8582, 8606, 8829, 8863, 8949Business Forms:1120, 1120S, 1065, 1041, 706, 709, 941, 940, 990Schedules: 1, 2, 3, A, B, C, D, E, EIC, F, H, SE
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All seven of the following tests must be met in order for a taxpayer to claim an-other person as a dependent in 2012. Test numbers 4 through 7 vary depending on whether the person is a qualifying child or a qualifying relative of the taxpayer.1) Taxpayer ineligible if a dependent test. To claim another person as a depen-
dent, the taxpayer, or spouse of taxpayer if filing jointly, cannot be claimed as a dependent on someone else’s tax return.
2) Married filing joint test. A person cannot be treated as a dependent if he or she files a joint return with a spouse. This rule does not apply if the joint return was filed only as a claim for refund and no tax liability would exist for either spouse if they had filed separate returns.
3) Citizen or resident test. The person claimed as a dependent must be either a U.S. citizen, U.S. national, or a resident of the U.S., Canada, or Mexico. An adopted child that lived with the taxpayer all year passes this test if the taxpayer is a U.S. citizen or U.S. national.
Qualifying Child Qualifying Relative4) Relationship test. The child must be the taxpayer’s son, daughter,
stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these, such as the taxpayer’s grandchild, niece, or nephew. Note: If a child meets tests 4 through 7 for more than one taxpayer, see Qualifying Child of More Than One Person,Tab 3 of TheTaxBook, 1040 Edition/Deluxe Edition.
4) Relationship test. A relative of the taxpayer must be:• A son, daughter, stepchild, foster child, or a descendant of any of these (such as a grandchild), or• A brother, sister, or a son or daughter of either of these (such as a niece or nephew), or• A father, mother, or an ancestor or sibling of either of them (such as a grandmother, grandfather,
aunt, or uncle), or• A stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law,
mother-in-law, brother-in-law, or sister-in-law, or• Any other person (other than the taxpayer’s spouse) who lived with the taxpayer all year as a
member of the taxpayer’s household if the relationship does not violate local law.
5) Member of household test. The child must have lived with the taxpayer for more than half of 2012. Exceptions apply.
5) Not a qualifying child test. The relative must not be a qualifying child of any other person in 2012.
6) Age test. The child must be:• Under age 19 at the end of 2012 and younger than the taxpayer
(or spouse if MFJ), or• Under age 24 at the end of 2012, a full time student for any part
of five calendar months during 2012, and younger than the taxpayer (or spouse if MFJ), or
• Any age and permanently and totally disabled.
6) Gross income test. The relative must have gross income of less than $3,650 in 2012.
7) Support test. The child cannot have provided over half of his or her own support during 2012.
7) Support test. The taxpayer must have provided over half of the relative’s support in 2012. This test does not apply for persons who qualify as dependents under the children of divorced or separated parents rule, the multiple support agreements rules, or the rule for kidnapped children.
Note: If a taxpayer’s child is not a dependent under the qualifying child rules, the child may still qualify as a dependent under the qualifying relative rules.
Schedule E Details
At-risk limits. Losses are allowed only up to the amount of the taxpayer’s risk of
financial loss from the activity.
Passive activity loss limits. A taxpayer’s passive activity losses are allowed only up
to the amount of passive activity gains for the year.
Passive activities. Trade or business activities where the taxpayer does not materi-
ally participate (such as an interest in a limited partnership). Rental activities are
passive by statute, with the exception of real estate professionals and specific activi-
ties that are considered non-rental by regulation.
Rental property considered non-rental. Certain activities such as short term rentals,
rentals provided along with significant services, and activities where the rental is in-
cidental to non-rental activities are not considered rental activities for the purposes
of passive loss rules and are therefore not passive activities by default.
$25,000 special loss allowance for rental real estate. A special exception to the pas-
sive loss limits allows a loss of $25,000 for taxpayers who actively participate in the
rental activity and have AGI of $100,000 or less ($50,000 MFS).
Self-employment tax on rental real estate. Income from the rental of real estate is
not subject to SE tax, with the exception of real estate dealers [Reg. §1.1402(a)-4].
Real estate professionals. Taxpayers who materially participated in a real property
trade or business and spent at least 750 hours in the activity during the year are con-
sidered real estate professionals and are not subject to passive loss limits.
Real estate dealers. Income of a real estate dealer is subject to SE tax. A real es-
tate dealer is a person whose primary business is to sell real estate to customers.
Note: An individual who holds real estate for the primary purpose of investment or
speculation is not considered a real estate dealer, even if rental income is derived
from the property.
Working interest in oil or gas property. An interest held directly by the taxpayer or
through an entity that does not limit liability.
Rental Activity Income
Real estate professional?
YesNo
Not subject to passive loss limitsSubject to passive loss limits
Was the rental income from an activity
as a real estate dealer?
No
Yes
Was the rental income from an
activity as a real estate dealer?
YesNo
Not subject to SE taxSubject to SE tax
Partnerships
LossGeneral Partner
Guaranteed payments and/or
distributive share of income
Limited PartnerLoss
Guaranteed Distributive
payments share of income
Subject to SE taxNot subject to SE tax
Material participation?
YesNo
Not subject to
passive loss limits
Working interest in oil or gas
property?
YesNo
Subject to passive loss limits
Dependents 3-1FASTTAXFACTS
Dependency Tests for 2021All seven of the following tests must be met in order for a taxpayer to claim another person as a dependent. Test numbers 4 through 7 vary depending on whether the person is a qualifying child or a qualifying relative.1) Dependent taxpayer test. To claim another person as a dependent,
the taxpayer, or spouse of the taxpayer if fi ling jointly, cannot be eligible to be claimed as a dependent on someone else’s tax return.
2) Joint return test. A person cannot be treated as a dependent if he or she fi les a joint return with a spouse. This rule does not apply if the joint return was fi led only to claim a refund of withheld income tax or estimated tax paid.
3) Citizen or resident test. The person claimed as a dependent must be either a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico. An adopted child (or child lawfully placed for legal adoption) that lived with the taxpayer all year passes this test if the taxpayer is a U.S. citizen or U.S. national.
Qualifying Child Qualifying Relative
4) Relationship test. The child must be the taxpayer’s son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of these, such as a grandchild, niece, or nephew.
Note: If a child meets tests 4 through 7 for more than one taxpayer, see Qualifying Child of More Than One Person, page 3-3.
4) Relationship or member of household test. A relative of the taxpayer must be:• A son, daughter, stepchild, foster child, or a descendant of any of these (such as a grandchild),• A brother, sister, half brother, half sister, or a son or daughter of either of these (such as a niece or
nephew),• A father, mother, or a direct ancestor or sibling of either of them (such as a grandmother, grand father, aunt,
or uncle), but not foster parent,• A stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law,
brother-in-law, or sister-in-law, or• Any other person (other than the spouse) who lived with the taxpayer all year as a member of the
taxpayer’s household if the relationship does not violate local law. See Exceptions to Time Lived With Taxpayer, below.
5) Residency test. The child must have lived with the taxpayer for more than half of the year. See Exceptions to Time Lived With Taxpayer, below.
5) Not a qualifying child test. The relative must not be a qualifying child of any other taxpayer for the year. For this purpose, a person is not a taxpayer if he or she is not required to fi le a tax return and either does not fi le a return or only fi les a return to get a refund of withheld income tax or estimated tax paid.
6) Age test. The child must be:• Under age 19 at the end of the year and
younger than the taxpayer (or spouse, if MFJ), or
• A student under age 24 at the end of the year and younger than the taxpayer (or spouse, if MFJ), see Student, below, or
• Permanently and totally disabled at any time during the year, regardless of age. See Permanently and Totally Disabled, below.
6) Gross income test. The relative must have gross income of less than $4,300 in 2020.Gross income defi ned. Gross income is all income (money, property, services) that is not exempt from tax.
Gross income includes all taxable unemployment compensation, taxable Social Security benefi ts, and certain scholarship and fellowship grants. Scholarships received by degree candidates that are used for tuition, fees, supplies, books, and equipment required for particular courses are generally not included in gross income. See Exception to Gross Income Test, below.
7) Support test. The child cannot provide over half of his or her own support during the year.Note: Third party payments (welfare, TANF, etc.) and scholarships received by a student are not considered support provided by the child.
7) Support test. The taxpayer must provide over half of the relative’s total support during the year. This test does not apply for persons who qualify as dependents under the children of divorced or separated parents rule, the multiple support agreements rules, and the rule for kidnapped children.
See Dependent Parent Special Rule, below.
Note: If a taxpayer’s child is not a dependent under the qualifying child rules, the child may still qualify as a dependent under the qualifying relative rules. However, claiming the child as a dependent under the qualifying relative rules will not qualify the taxpayer for the Earned Income Credit or the Child Tax Credit.
Exceptions to Time Lived With Taxpayer
Temporary absences for special circumstances, such as school, vacation, business, medical care, military service, or detention in a juvenile facil-ity, count as time the person lived in the home. A child who was born or died during the year is treated as having lived with the taxpayer for more than half of the year if the taxpayer’s home was the child’s home for more than half the time he or she was alive. A stillborn child does not qualify as a dependent. A child kidnapped by a non-family member may still be a qualifying child. See Kidnapped Child, page 3-2.
Student A student must be enrolled full-time during some part of each of any fi ve calendar months during the year at a school, or taking a full-time on-farm training course given by a school, or a state, county, or local government agency. See School Defi ned, page 3-2.
Permanently and Totally Disabled
A person is permanently and totally disabled if, at any time during the year, he or she cannot engage in any substantial gainful activity because of a physical or mental condition, and a doctor has determined that this condition has lasted, or can be expected to last, continuously for at least a year or can be expected to lead to death.
Exception to Gross Income Test
If the taxpayer’s qualifying relative is permanently and totally disabled at any time during the year, certain income for services performed at a sheltered workshop is excluded for this test.
Dependent Parent Special Rule
If the taxpayer’s qualifying person is the taxpayer’s father or mother, the taxpayer may be eligible to fi le as Head of Household even if the father or mother does not live with the taxpayer. However, the taxpayer must be able to claim the father or mother as a dependent and pay more than half the cost of keeping up a home that was the main home for the entire year for the father or mother. This includes paying more than half the cost of keeping the parent in a rest home or home for the elderly.
HOW A CHILD OR OTHER QUALIFYING PERSON AFFECTS A CLIENT’S TAX RETURN FAST ANSWER CHARTS 2021TAX
YEAR
DEPENDENTS
FASTTAXFACTS
stepbrother, stepsister, or a descendant of any of these, such as a grandchild, niece, or nephew.
If a child meets tests 4 through 7 for more than one taxpayer, see Than One Person,
• A father, mother, or a direct ancestor or sibling of either of them (such as a grandmother, grand father, aunt, or uncle), but not foster parent,
• A stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law,
Residency test. the taxpayer for more than half of the year. See Exceptions to Time Lived With Taxpayer,
Age test. The child must be:• Under age 19 at the end of the year and
younger than the taxpayer (or spouse, if MFJ),
• A student under age 24 at the end of the year and younger than the taxpayer (or spouse, if MFJ), see Student,
• Permanently and totally disabled at any time during the year, regardless of age. See Permanently and Totally Disabled,
Support test. The child cannot provide over half of his or her own support during the year.
Third party payments (welfare, TANF, etc.) and scholarships received by a student are not considered support provided by the child.
If a taxpayer’s child is not a dependent under the qualifying child rules, the child may still qualify as a dependent under the qualifying relative rules. However, claiming the child as a dependent under the qualifying relative rules will not qualify the taxpayer for the Earned Income Credi
Exceptions to Time Lived With
Permanently and Totally
Exception to Gross Income
Dependent Parent Special
FASTTAXFACTS
than one taxpayer, see Than One Person,
• A stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law, mother-in-law,
The child must have lived with the taxpayer for more than half of the year. See Exceptions to Time Lived With Taxpayer,
The child must be:• Under age 19 at the end of the year and
younger than the taxpayer (or spouse, if MFJ),
• A student under age 24 at the end of the year and younger than the taxpayer (or spouse, if
Student,• Permanently and totally disabled at any
time during the year, regardless of age. See Permanently and Totally Disabled,
The child cannot provide over half of his or her own support during the year.
Third party payments (welfare, TANF, etc.) and scholarships received by a student are not considered support provided by the child.
If a taxpayer’s child is not a dependent under the qualifying child rules, the child may still qualify as a dependent under the qualifying relative rules. However, claiming the child as a dependent under the qualifying relative rules will not qualify the taxpayer for the Earned Income Credi
All seven of the following tests must be met in order for a taxpayer to claim an-other person as a dependent in 2012. Test numbers 4 through 7 vary depending on whether the person is a qualifying child or a qualifying relative of the taxpayer.1) Taxpayer ineligible if a dependent test. To claim another person as a depen-
dent, the taxpayer, or spouse of taxpayer if filing jointly, cannot be claimed as a dependent on someone else’s tax return.
2) Married filing joint test. A person cannot be treated as a dependent if he or she files a joint return with a spouse. This rule does not apply if the joint return was filed only as a claim for refund and no tax liability would exist for either spouse if they had filed separate returns.
3) Citizen or resident test. The person claimed as a dependent must be either a U.S. citizen, U.S. national, or a resident of the U.S., Canada, or Mexico. An adopted child that lived with the taxpayer all year passes this test if the taxpayer is a U.S. citizen or U.S. national.
Qualifying Child Qualifying Relative4) Relationship test. The child must be the taxpayer’s son, daughter,
stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these, such as the taxpayer’s grandchild, niece, or nephew. Note: If a child meets tests 4 through 7 for more than one taxpayer, see Qualifying Child of More Than One Person,Tab 3 of TheTaxBook, 1040 Edition/Deluxe Edition.
4) Relationship test. A relative of the taxpayer must be:• A son, daughter, stepchild, foster child, or a descendant of any of these (such as a grandchild), or• A brother, sister, or a son or daughter of either of these (such as a niece or nephew), or• A father, mother, or an ancestor or sibling of either of them (such as a grandmother, grandfather,
aunt, or uncle), or• A stepbrother, stepsister, stepfather, stepmother, son-in-law, daughter-in-law, father-in-law,
mother-in-law, brother-in-law, or sister-in-law, or• Any other person (other than the taxpayer’s spouse) who lived with the taxpayer all year as a
member of the taxpayer’s household if the relationship does not violate local law.
5) Member of household test. The child must have lived with the taxpayer for more than half of 2012. Exceptions apply.
5) Not a qualifying child test. The relative must not be a qualifying child of any other person in 2012.
6) Age test. The child must be:• Under age 19 at the end of 2012 and younger than the taxpayer
(or spouse if MFJ), or• Under age 24 at the end of 2012, a full time student for any part
of five calendar months during 2012, and younger than the taxpayer (or spouse if MFJ), or
• Any age and permanently and totally disabled.
6) Gross income test. The relative must have gross income of less than $3,650 in 2012.
7) Support test. The child cannot have provided over half of his or her own support during 2012.
7) Support test. The taxpayer must have provided over half of the relative’s support in 2012. This test does not apply for persons who qualify as dependents under the children of divorced or separated parents rule, the multiple support agreements rules, or the rule for kidnapped children.
Note: If a taxpayer’s child is not a dependent under the qualifying child rules, the child may still qualify as a dependent under the qualifying relative rules.
on whether the person is a qualifying child or a qualifying relative of the taxpayer.1)
Qualifying Child4)
5)
6)
7)
Note:
Schedule E Details
At-risk limits. Losses are allowed only up to the amount of the taxpayer’s risk of
financial loss from the activity.
Passive activity loss limits. A taxpayer’s passive activity losses are allowed only up
to the amount of passive activity gains for the year.
Passive activities. Trade or business activities where the taxpayer does not materi-
ally participate (such as an interest in a limited partnership). Rental activities are
passive by statute, with the exception of real estate professionals and specific activi-
ties that are considered non-rental by regulation.
Rental property considered non-rental. Certain activities such as short term rentals,
rentals provided along with significant services, and activities where the rental is in-
cidental to non-rental activities are not considered rental activities for the purposes
of passive loss rules and are therefore not passive activities by default.
$25,000 special loss allowance for rental real estate. A special exception to the pas-
sive loss limits allows a loss of $25,000 for taxpayers who actively participate in the
rental activity and have AGI of $100,000 or less ($50,000 MFS).
Self-employment tax on rental real estate. Income from the rental of real estate is
not subject to SE tax, with the exception of real estate dealers [Reg. §1.1402(a)-4].
Real estate professionals. Taxpayers who materially participated in a real property
trade or business and spent at least 750 hours in the activity during the year are con-
sidered real estate professionals and are not subject to passive loss limits.
Real estate dealers. Income of a real estate dealer is subject to SE tax. A real es-
tate dealer is a person whose primary business is to sell real estate to customers.
Note: An individual who holds real estate for the primary purpose of investment or
speculation is not considered a real estate dealer, even if rental income is derived
from the property.
Working interest in oil or gas property. An interest held directly by the taxpayer or
through an entity that does not limit liability.
Rental Activity Income
Real estate professional?
YesNo
Not subject to passive loss limitsSubject to passive loss limits
Was the rental income from an activity
as a real estate dealer?
No
Yes
Was the rental income from an
activity as a real estate dealer?
YesNo
Not subject to SE taxSubject to SE tax
Partnerships
LossGeneral Partner
Guaranteed payments and/or
distributive share of income
Limited PartnerLoss
Guaranteed Distributive
payments share of income
Subject to SE taxNot subject to SE tax
Material participation?
YesNo
Not subject to
passive loss limits
Working interest in oil or gas
property?
YesNo
Subject to passive loss limits
1099/W-2 Roadmap 2-1FASTTAXFACTS
W-2, Wage and Tax StatementBox Description Report On
1 Wages, tips, other compensation
Wages, tips, and other compensation subject to federal income tax. Includes value of taxable fringe benefits.Does not include elective deferrals such as employee contributions to 401(k) plans.Statutory employees: Includes payments subject to Social Security and Medicare taxes but not subject to federal income tax withholding.
Line 1, Form 1040.
Statutory employees: Line 1, Schedule C and check the box.
2 Federal income tax withheld
Total federal income tax withheld from the employee’s wages for the year. Line 25a, Form 1040.
3 Social Security wages Wages subject to withholding of Social Security tax. Maximum applicable wages $137,700 (2020). Includes elective deferrals such as employee contributions to a 401(k) plan. Does not include Social Security tips or allocated tips.
Not reported on Form 1040.(Line 8a, Schedule SE, if also self-employed.)
4 Social Security tax withheld
Total employee Social Security tax (6.2%) withheld on wages (box 3) and tips (box 7). Maximum Social Security tax withholding is $8,537.40 (2020). Excess withholding for employees with two or more jobs is reported as a refundable credit on Form 1040.
Line 10, Schedule 3, only if maximum withholding is exceeded.
5 Medicare wages and tips Wages and tips subject to withholding of Medicare tax. There is no maximum limit of wages subject to Medicare tax.
Not reported on Form 1040.(Line 1, Form 8959, if subject to additional Medicare tax.)
6 Medicare tax withheld Medicare tax rate of 1.45% applied to Medicare wages and tips (box 5). Additional Medicare tax withheld at 0.9% on Medicare wages over $200,000.
Line 19, Form 8959, Additional Medicare Tax, if applicable.
7 Social Security tips Tips the employee reported to the employer. Already included in box 1 and box 5, Form W-2.
8 Allocated tips Tips allocated to an employee by certain food and beverage establishments. This amount is not included in boxes 1, 3, 5, or 7, and no tax is withheld from these tips. Form 4137, Social Security and Medicare Tax on Unreported Tip Income, is used to compute the Social Security and Medicare tax owed on allocated tips.
Line 1, Form 1040.Line 1, Form 4137.
10 Dependent care benefits Benefits received under an employer’s dependent care assistance program. Any amount over $5,000 is also included in box 1. If benefits do not exceed actual expenses, none of the benefits are taxable. If benefits exceed qualified expenses for dependent care, the excess is added to wages.
Line 12, Part III, Form 2441, Child and Dependent Care Expenses.
11 Nonqualified plans Distributions from a nonqualified plan or nongovernmental section 457(b) plan. Used by SSA to determine if amounts in boxes 1, 3, and/or 5 were earned in a prior year.
Already included in wages in box 1 (or box 3 and/or box 5), Form W-2.
12 Codes Letter codes indicating a variety of taxable and nontaxable items. For an explanation of Form W-2 codes, see 2020 Form W-2 Codes and Form 1099-R Codes, Tools for Tax Pros, www.thetaxbook.com/tools.
Various.
13 Checkboxes Checkboxes indicating pay as a statutory employee (see box 1 above), enrollment in an employer retirement plan, or third-party sick pay.
Various.
14 Other Reports other information to the employee such as state disability insurance taxes withheld, union dues, nontaxable income, educational assistance payments, and railroad retirement (RRTA) compensation.
Various.
15 – 20 State and local State and local income tax information. Used to report wages and taxes for multiple states and localities.
Various.
W-2G, Certain Gambling WinningsBox Description Report On
1 Reportable winnings Gambling winnings of $1,200 or more from bingo or slot machines, $1,500 or more in winnings (reduced by wager) from keno, more than $5,000 in winnings (reduced by wager or buy-in) from a poker tournament, $600 or more in other gambling winnings, or any other gambling winnings subject to federal income tax withholding. Gambling losses up to the amount of gambling winnings are deductible as an other itemized deduction.
Line 8, Schedule 1, for winnings.Line 16, Schedule A, Itemized Deductions, for losses.
Note: Unless indicated, all schedules refer to Form 1040, U.S. Individual Income Tax Return.
EXPLANATIONS AND WHERE TO REPORT 1099 AND W-2 ITEMS ON THE TAX RETURN FAST ANSWER CHARTS 2020TAX
YEAR
1099/W-2 ROADMAP
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Individual Tabs 1-17
1 What’s New2 2021 Federal Tax Table
and EIC Table3 1040 Line Instructions4 Itemized Deductions, A5 Sole Proprietorships
and Farmers, C, F, SE6 Investment Income, B,
D, 47977 Rental, Passive, and At-Risk, E
8 Business Deductions9 Depreciation, 456210 Automobiles & Listed Property11 Tax Credits12 Children, College, and Family13 Retirement, Social
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Business Tabs 18-3418 C Corporations, 112019 S Corporations, 1120S20 Partnerships & LLCs,106521 Estates, Trusts, and
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940, 94124 Business Tools &
Worksheets25 Other Business Topics26 What’s New Business27 Starting a Business, Sch M-1/M-3
28 Sales, Dispositions, Liquidations
29 Small Business Retirement
30 Employee Health Benefits
31 Business Credits32 Tax-Exempt Orgs33 Business Audit
Strategies34 States Business Tax
Summary
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INDIVIDUAL2019TAX
YEARINDIVIDUAL PREPARATION FAST ANSWER CHARTS2019 Federal Tax Rate Schedule
Single Taxable Income $ 0 to 9,700 × 10.0% minus $ 0.00 = Tax 9,701 to 39,475 × 12.0% minus 194.00 = Tax 39,476 to 84,200 × 22.0% minus 4,141.50 = Tax 84,201 to 160,725 × 24.0% minus 5,825.50 = Tax 160,726 to 204,100 × 32.0% minus 18,683.50 = Tax 204,101 to 510,300 × 35.0% minus 24,806.50 = Tax 510,301 and over × 37.0% minus 35,012.50 = Tax
MFJ or QW Taxable Income $ 0 to 19,400 × 10.0% minus $ 0.00 = Tax 19,401 to 78,950 × 12.0% minus 388.00 = Tax 78,951 to 168,400 × 22.0% minus 8,283.00 = Tax 168,401 to 321,450 × 24.0% minus 11,651.00 = Tax 321,451 to 408,200 × 32.0% minus 37,367.00 = Tax 408,201 to 612,350 × 35.0% minus 49,613.00 = Tax 612,351 and over × 37.0% minus 61,860.00 = Tax
MFS Taxable Income $ 0 to 9,700 × 10.0% minus $ 0.00 = Tax 9,701 to 39,475 × 12.0% minus 194.00 = Tax 39,476 to 84,200 × 22.0% minus 4,141.50 = Tax 84,201 to 160,725 × 24.0% minus 5,825.50 = Tax 160,726 to 204,100 × 32.0% minus 18,683.50 = Tax 204,101 to 306,175 × 35.0% minus 24,806.50 = Tax 306,176 and over × 37.0% minus 30,930.00 = Tax
HOH Taxable Income $ 0 to 13,850 × 10.0% minus $ 0.00 = Tax 13,851 to 52,850 × 12.0% minus 277.00 = Tax 52,851 to 84,200 × 22.0% minus 5,562.00 = Tax 84,201 to 160,700 × 24.0% minus 7,246.00 = Tax 160,701 to 204,100 × 32.0% minus 20,102.00 = Tax 204,101 to 510,300 × 35.0% minus 26,225.00 = Tax 510,301 and over × 37.0% minus 36,431.00 = Tax
2019 Standard DeductionSingle or MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,200MFJ or QW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,400HOH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,350Additional age 65 or older, or blind, per person, per event:MFJ, QW, or MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,300Single or HOH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,650
Dependents. The standard deduction is the greater of $ 1,100 or earned income plus $350, up to regular standard deduction.
2019 Personal Exemption DeductionPersonal exemption deduction per person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0Qualifying relative income limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,200
Penalty for Not Having Health InsuranceEffective 2019, the penalty tax under the Affordable Care Act (ACA) for not having minimum essential health insurance coverage is zero.
2019 Standard Mileage RatesBusiness . . . . . . . . . . . . . . . . . . . . . . . 58.0¢ Depreciation . . . . . . . . . . . . . . . . . . 26.0¢Charitable . . . . . . . . . . . . . . . . . . . . . . 14.0¢ Medical and Moving . . . . . . . 20.0¢
2019 Earned Income Credit — Maximum Income Limits No Children 1 Child 2 Children 3 ChildrenMFJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 21,370 . . . . . . $ 46,884 . . . . . . $ 52,493 . . . . . . . $ 55,952Single, HOH, QW.. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,570 . . . . . . $ 41,094 . . . . . . $ 46,703 . . . . . . . $ 50,162Investment income limit: $ 3,600
2019 Filing Requirements — for Most TaxpayersIf filing And at the end of 2018, Then file a return if grossstatus is: taxpayer was: income was at least:Single . . . . . . . . . . . . . . . . Under age 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,000 Age 65 or older . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,600MFJ . . . . . . . . . . . . . . . . . . . Under age 65 (both spouses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,000 Age 65 or older (one spouse) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,300 Age 65 or older (both spouses) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,600MFS . . . . . . . . . . . . . . . . . . . Any age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 5HOH . . . . . . . . . . . . . . . . . . . Under age 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,000 Age 65 or older . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,600QW . . . . . . . . . . . . . . . . . . . . Under age 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,000 Age 65 or older . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,300
Social Security and Medicare TaxesMaximum earnings subject to: Social Security tax . . . . . . . . . . . . . . . . . $132,900 Medicare tax . . . . . . . . . . . . . . . . . . . . . . . . . No Limit
Social Security tax rate: Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.20% Self-employed . . . . . . . . . . . . . . . . . . . . . . . . . 12.40%
Maximum Social Security tax: Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,239.80 Self-employed . . . . . . . . . . . . . . . . . . . . $16,479.60
Medicare tax rate: Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.45% Self-employed . . . . . . . . . . . . . . . . . . . . . . . . . . 2.90%
2019 Phaseouts Based on Modified AGIItemized Deductions / ExemptionsThe phaseouts do not apply for tax years 2018 through 2025.
Traditional IRA Covered By EmployerMFJ, QW . . . . . . . . . . . . . $103,000 to $ 123,000Single, HOH . . . . . . . . . . $64,000 to $ 74,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $ 10,000Spouse not covered by employer . . . . . . . . . $193,000 to $ 203,000
Student Loan InterestMFJ . . . . . . . . . . . . . . . . . . . . $ 140,000 to $ 170,000Single, HOH, QW . . . $ 70,000 to $ 85,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Does not qualify Roth IRA
MFJ, QW . . . . . . . . . . . . $ 193,000 to $ 203,000Single, HOH . . . . . . . . $ 122,000 to $ 137,000MFS . . . . . . . . . . . . . . . . . . . $ 0 to $ 10,000
American Opportunity CreditMFJ . . . . . . . . . . . . . . . . . . . . $ 160,000 to $ 180,000Single, HOH, QW . . . $ 80,000 to $ 90,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Does not qualify Retirement Savings Contributions
Credit—AGI up to: Single, Rate MFJ HOH QW, MFS
50% $ 38,500 $ 28,875 $ 19,250 20% $ 41,500 $ 31,125 $ 20,750 10% $ 64,000 $ 48,000 $ 32,000 0% $ 64,001 $ 48,001 $ 32,001
Lifetime Learning Credit MFJ . . . . . . . . . . . . . . . . . . . . $ 116,000 to $ 136,000Single, HOH, QW . . . $ 58,000 to $ 68,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Does not qualify
Child Tax Credit/Family CreditPhaseout begins at:MFJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 400,000Single, HOH, MFS, QW . . . . . . . . . . . . $ 200,000
Adoption Credit or ExclusionMFJ, Single, HOH, QW . . . $211,160 to $251,160
Additional Medicare Tax 0.9% additional tax on combined wages, compensation, and self-employment income above threshold amount.Filing Status Single, HOH, QW MFJ MFSThreshold Amount $200,000 $250,000 $125,000
FASTTAXFACTSIndividual 1-6
Full Retirement Age — Social SecurityA person reaches full retirement age as follows: Born prior to 1938. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 65 Born in 1938 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 65 and 2 months Born in 1939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 65 and 4 months Born in 1940 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 65 and 6 months Born in 1941 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 65 and 8 months Born in 1942 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 65 and 10 months Born in 1943 through 1954 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 66 Born in 1955 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 66 and 2 months Born in 1956 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 66 and 4 months Born in 1957 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 66 and 6 months Born in 1958 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 66 and 8 months Born in 1959 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 66 and 10 months Born after 1959 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Age 67
Birthday on January 1. Individuals born on January 1 of any year should refer to the previous year in this chart.
3-, 5-, 7-, 10-, 15-, and 20-Year Property — Regular MACRS Half-Year Convention
YearDepreciation rate for recovery period
200DB 3-year
200DB 5-year
200DB 7-year
200DB 10-year
150DB 15-year
150DB 20-year
12345
33.33%44.4514.817.41
20.00%32.0019.2011.5211.52
14.29%24.4917.4912.498.93
10.00%18.0014.4011.529.22
5.00%9.508.557.706.93
3.750%7.2196.6776.1775.713
678910
5.76 8.928.934.46
7.376.556.556.566.55
6.235.905.905.915.90
5.2854.8884.5224.4624.461
1112131415
3.28 5.915.905.915.905.91
4.4624.4614.4624.4614.462
1617181920
2.95 4.4614.4624.4614.4624.461
21 2.231
Summary of Recovery Periods Under MACRSThese property classes are also listed under column (a) in Section B, Part III, Form 4562, Depreciation and Amortization.3-Year Property
• Tractor units for over-the-road use. • Any race horse over two years old when placed in service.
(All race horses placed in service after December 31, 2008, and before January 1, 2018, are deemed to be 3-year property, regardless of age.) 1
• Any other horse (other than a race horse) over 12 years old when placed in service.
• Qualified rent-to-own property.5-Year Property
• Automobiles, taxis, buses, and trucks.• Computers and peripheral equipment. • Office machinery (such as typewriters, calculators, and copiers). • Any property used in research and experimentation.• Breeding cattle and dairy cattle.• Appliances, carpets, furniture, etc., used in a residential rental
real estate activity.• Certain geothermal, solar, and wind energy property.• Any new (original use) machinery equipment (other than any
grain bin, cotton ginning asset, fence, or other land improvement) used in a farming business and placed in service after December 31, 2017.
7-Year Property
• Office furniture and fixtures (such as desks, files, shelving, display cases, and safes).
• Agricultural machinery and equipment (used).• Any property that does not have a class life and has not been
designated by law as being in any other class.• Certain motorsports entertainment complex property placed in
service before January 1, 2018. 1• Any natural gas gathering line original use of which commences
after April 11, 2005.• Any race horse two years old or younger placed in service after
December 31, 2017. 1
10-Year Property
• Vessels, barges, tugs, and similar water transportation equipment.
• Any single purpose agricultural or horticultural structure.• Any tree or vine bearing fruits or nuts.
15-Year Property
• Certain improvements made directly to land or added to it (such as shrubbery, fences, roads, and bridges).
• Any retail motor fuels outlet, such as a convenience store.• Any municipal wastewater treatment plant.• Initial clearing and grading land improvements for gas utility
property.• Qualified leasehold improvement property, qualified restaurant
property, and qualified retail improvement property placed in service after 2009 and before January 1, 2018.
• Qualified improvement property placed in service after December 31, 2017 (once technical correction is made).2
20-Year Property
• Farm buildings (other than single purpose agricultural or horticultural structures).
• Municipal sewers not classified as 25-year property.• Initial clearing and grading land improvements for electric
utility transmission and distribution plants.25-Year Property
• Property that is an integral part of the gathering, treatment, or commercial distribution of water, and that, without regard to this provision, would be 20-year property.
• Municipal sewers.27.5-Year Residential Rental Property
This is any building or structure, such as a rental home, if 80% or more of its gross rental income for the tax year is from dwelling units. A dwelling does not include a unit in a hotel, motel, or other establishment where more than half the units are used on a transient basis. If the taxpayer occupies any part of the building or structure for personal use, its gross rental income includes the fair rental value of the part occupied by the taxpayer.
39-Year Nonresidential Real Property
This is IRC section 1250 property, such as an office building, store, or warehouse, that is neither residential rental property nor property with a class life of less than 27.5 years.
1 This provision is currently expired for tax years after 2017. See What’s New, Tab 1, The-TaxBook 1040 Edition/Deluxe Edition for information about late-breaking legislation.
2 Effective for 2018, qualified improvement property is 39-year property without a legisla-tive technical correction.
Business Use of Home MethodsSimplified Method Regular Method
Regular/exclusive use tests Same rules. Same rules.Maximum square footage allowed for business.
300 square feet. No maximum.
Expenses allowed $5 per square foot. Actual expenses determined and records
maintained.Depreciation deduction. No. Yes.Depreciation recapture on sale of home.
No. Yes.
Deduction cannot exceed gross income limitation.
Same rules. Same rules.
Carryover of expenses in excess of gross income limitation.
No. Yes.*
Home-related itemized deductions (i.e. mortgage interest and real estate taxes).
Claimed in full on Schedule A (Form 1040).
Allocated between Schedule A (Form 1040) and business schedule.
* Loss carryover from use of regular method in prior year may not be claimed in a year the simplified method is used. The loss is carried over until the next year the regular method is used again.
Employees. No deduction allowed. The business use of home deduction for employ-ees is suspended for tax years 2018 through 2025.
Individual 1-5
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Dependency Test for 2019All seven of the following tests must be met in order for a taxpayer to claim an-other person as a dependent in 2018. Test numbers 4 through 7 vary depending on whether the person is a qualifying child or a qualifying relative of the taxpayer.1) Taxpayer ineligible if a dependent test. To claim another person as a depen-
dent, the taxpayer, or spouse of taxpayer if filing jointly, cannot be claimed as a dependent on someone else’s tax return.
2) Married filing joint test. A person cannot be treated as a dependent if he or she files a joint return with a spouse. This rule does not apply if the joint return was filed only as a claim for refund of income tax withheld or estimated tax paid, and no tax liability would exist for either spouse if they had filed separate returns.
3) Citizen or resident test. The person claimed as a dependent must be either a U.S. citizen, U.S. national, or a resident of the U.S., Canada, or Mexico. An adopted child that lived with the taxpayer all year passes this test if the taxpayer is a U.S. citizen or U.S. national.
Qualifying Child Qualifying Relative4) Relationship test. The child must be the taxpayer’s son, daughter,
stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of these, such as the taxpayer’s grandchild, niece, or nephew. Note: If a child meets tests 4 through 7 for more than one taxpayer, see Qualifying Child of More Than One Person, Tab 3, TheTaxBook, 1040 Edition/Deluxe Edition.
4) Relationship test. A relative of the taxpayer must be:• A son, daughter, stepchild, foster child, or a
descendant of any of these (such as a grandchild), • A brother, sister, or a son or daughter of either of
these (such as a niece or nephew),• A father, mother, or an ancestor or sibling of either
of them (such as a grandmother, grandfather, aunt, or uncle),
• A stepbrother, stepsister, stepfather, step-mother, son-in-law, daughter-in-law, fa-ther-in-law, mother-in-law, brother-in-law, or sister-in-law, or
• Any other person (other than the taxpayer’s spouse) who lived with the taxpayer all year as a member of the taxpayer’s household if the relationship does not violate local law.
5) Member of household test. The child must have lived with the taxpayer for more than half of 2018. Exceptions apply.
5) Not a qualifying child test. The relative must not be a qualifying child of any other person in 2018.
6) Age test. The child must be:
• Under age 19 at the end of 2018 and younger than the taxpayer (or spouse if MFJ),
• Under age 24 at the end of 2018, a full-time student for any part of five calendar months during 2018, and younger than the taxpayer (or spouse if MFJ), or
• Any age and permanently and totally disabled.
6) Gross income test. The relative must have gross income of less than $4,150 in 2018. Gross income defined. Gross income is all income that is not exempt from tax. Gross income includes all taxable unemployment compensation and certain scholarship and fellow-
ship grants. Scholarships received by degree candidates that are used for tuition, fees, supplies, books, and equipment required for particular courses are generally not included in gross income.
7) Support test. The child cannot have provided over half of his or her own support during 2018. Note: Third-party payments and scholarships are not considered support provided by child.
7) Support test. The taxpayer must have provided over half the relative’s support in 2018. This test does not apply for persons who qualify as dependents under the children of divorced or separated parents rule, the multiple support agreements rules, or the rule for kidnapped children.
Note: If a taxpayer’s child is not a dependent under the qualifying child rules, the child may still qualify as a dependent under the qualifying relative rules.
Refund StatusStatus of a taxpayer’s refund can be obtained by phone at 1-800-829-1040, or at www.irs.gov, and click on “Refund Status.” Taxpayer’s SSN, filing status, and refund amount is required to obtain information. Taxpayers should wait 24 hours from the acknowledgement of an e-filed return, or four weeks after mailing a paper return, to check on the status of a refund.
Day Care ProvidersStandard Meal and Snack Rates: 2018Continental U.S.
Breakfast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.31Lunch and Dinner (each). . . . . . . . . . . . . $ 2.46Snacks (each/up to 3) . . . . . . . . . . . . . . . . . $ 0.73
AlaskaBreakfast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.09Lunch and Dinner (each). . . . . . . . . . . . . $ 3.99Snacks (each/up to 3) . . . . . . . . . . . . . . . . . $ 1.19
HawaiiBreakfast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.53Lunch and Dinner (each). . . . . . . . . . . . . $ 2.88Snacks (each/up to 3) . . . . . . . . . . . . . . . . . $ 0.85
2019 Dependent CreditsChild Tax Credit• $2,000 per child (nonrefundable
and limited by tax liability).• Phased out at $400,000 MFJ
($200,000 all others).
Additional Child Tax Credit — Schedule 8812 (Form 1040)• $1,400 per child maximum
(refundable).• Earned income threshold is
$2,500.
Credit for Other Dependents• $500 (nonrefundable) per
qualifying dependent other than a qualifying child.
Adoption Credit/Exclusion — Form 8839• $13,810 per eligible child limit.• Phases out with MAGI $207,140–
$247,140.
Dependent Care Credit/Exclusion — Form 2441• $3,000 ($6,000 if two or more
qualifying persons) dollar limit.• No income limit.
2019 Tax Rates: Capital Gain and Dividend IncomeIf income is… Maximum
tax rate %If asset is held…
Gain from the sale of collectibles 28% More than 1 year
Taxable portion of gain on qualified small business stock (section 1202 exclusion)
28% More than 5 years
Unrecaptured section 1250 gain 25% More than 1 year
Long-term capital gain See below More than 1 year
Qualified dividend income See below More than 60 days
Taxable IncomeSingle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $38,600MFJ/QW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $77,200MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $38,600HOH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $51,700Estates and trusts. . . . . . . . . . . . . . . . . . . . . . $0 to $2,600
0%
Taxable IncomeSingle . . . . . . . . . . . . . . . . . . . . . . . . . . . . $38,601 to $425,800MFJ/QW . . . . . . . . . . . . . . . . . . . . . . . . $77,201 to $479,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $38,601 to $239,500HOH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $51,701 to $452,400Estates and trusts. . . . . . . . . . . . . . $2,601 to $12,700
15%
Taxable IncomeSingle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$425,801 and overMFJ/QW . . . . . . . . . . . . . . . . . . . . . . . . . .$479,001 and overMFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$239,501 and overHOH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$452,401 and overEstates and trusts. . . . . . . . . . . . . . $12,701 and over
20%
Short-term capital gain 37% 1 year or less
Ordinary dividend income 37% 60 days or less
Net Investment Income Tax (NIIT) 3.8% additional tax on investment income if MAGI above threshold amount
Filing status Single, HOH MFJ, QW MFS
Threshold amount $200,000 $250,000 $125,000
1040 and Small Business
1
Individual 1-1FASTTAXFACTS
Federal Tax Rate Schedule Single Taxable Income $ 0 to 9,875 × 10.0% minus $ 0.00 = Tax 9,876 to 40,125 × 12.0% minus 197.50 = Tax 40,126 to 85,525 × 22.0% minus 4,210.00 = Tax 85,526 to 163,300 × 24.0% minus 5,920.50 = Tax 163,301 to 207,350 × 32.0% minus 18,984.50 = Tax 207,351 to 518,400 × 35.0% minus 25,205.00 = Tax 518,401 and over × 37.0% minus 35,573.00 = Tax
Married Filing Jointly (MFJ) or Qualifying Widower (QW) Taxable Income
$ 0 to 19,750 × 10.0% minus $ 0.00 = Tax 19,751 to 80,250 × 12.0% minus 395.00 = Tax 80,251 to 171,050 × 22.0% minus 8,420.00 = Tax 171,051 to 326,600 × 24.0% minus 11,841.00 = Tax 326,601 to 414,700 × 32.0% minus 37,969.00 = Tax 414,701 to 622,050 × 35.0% minus 50,410.00 = Tax 622,051 and over × 37.0% minus 62,851.00 = Tax Married Filing Separately (MFS) Taxable Income $ 0 to 9,875 × 10.0% minus $ 0.00 = Tax 9,876 to 40,125 × 12.0% minus 197.50 = Tax 40,126 to 85,525 × 22.0% minus 4,210.00 = Tax 85,526 to 163,300 × 24.0% minus 5,920.50 = Tax 163,301 to 207,350 × 32.0% minus 18,984.50 = Tax 207,351 to 311,025 × 35.0% minus 25,205.00 = Tax 311,026 and over × 37.0% minus 31,425.50 = Tax Head of Household (HOH) Taxable Income $ 0 to 14,100 × 10.0% minus $ 0.00 = Tax 14,101 to 53,700 × 12.0% minus 282.00 = Tax 53,701 to 85,500 × 22.0% minus 5,652.00 = Tax 85,501 to 163,300 × 24.0% minus 7,362.00 = Tax 163,301 to 207,350 × 32.0% minus 20,426.00 = Tax 207,351 to 518,400 × 35.0% minus 26,646.50 = Tax 518,401 and over × 37.0% minus 37,014.50 = Tax
Standard DeductionSingle or MFS . . . . . . . . . . . . . $12,400MFJ or QW . . . . . . . . . . . . . . . . . $24,800HOH . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,650
Additional age 65 or older, or blind, per person, per event:MFJ, QW, or MFS . . . . . . . . . . $1,300Single or HOH . . . . . . . . . . . . . . . $1,650
Dependents. The standard deduction is the greater of $ 1,100 or earned income plus $350, up to regular standard deduction.
Personal Exemption DeductionPersonal exemption deduction per person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0Qualifying relative gross income limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,300
Kiddie TaxApplies to children with unearned income over $2,200.
Earned income. Up to $12,400 not taxed. Over $12,400 taxed at child’s rate.
Unearned income. Taxed at parents’ tax rates if over $2,200.
Filing Requirements — for Most TaxpayersIf filing And at the end of 2020, Then file a return if grossstatus is: taxpayer was: income was at least:Single . . . . . . . . . . . . . . . . Under age 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,400 Age 65 or older . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,050MFJ . . . . . . . . . . . . . . . . . . . Under age 65 (both spouses) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,800 Age 65 or older (one spouse) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,100 Age 65 or older (both spouses) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,400MFS . . . . . . . . . . . . . . . . . . . Any age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 5HOH . . . . . . . . . . . . . . . . . . . Under age 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,650 Age 65 or older . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,300QW . . . . . . . . . . . . . . . . . . . . Under age 65 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,800 Age 65 or older . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 26,100
Social Security and Medicare TaxesMaximum earnings subject to: Social Security tax . . . . . . . . . . . . . . . . . $137,700 Medicare tax . . . . . . . . . . . . . . . . . . . . . . . . . No Limit
Social Security tax rate: Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.20% Self-employed . . . . . . . . . . . . . . . . . . . . . . . . . 12.40%
Maximum Social Security tax: Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,537.40 Self-employed . . . . . . . . . . . . . . . . . . . . $17,074.80
Medicare tax rate: Employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.45% Self-employed . . . . . . . . . . . . . . . . . . . . . . . . . . 2.90%
Phaseouts Based on Modified AGIStudent Loan InterestMFJ . . . . . . . . . . . . . . . . . . . . $ 140,000 to $ 170,000Single, HOH, QW . . . $ 70,000 to $ 85,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Does not qualify
Traditional IRA-Covered By EmployerMFJ, QW . . . . . . . . . . . . . $104,000 to $ 124,000Single, HOH . . . . . . . . . . $65,000 to $ 75,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $ 10,000Spouse not covered by
employer . . . . . . . . . $196,000 to $ 206,000American Opportunity CreditMFJ . . . . . . . . . . . . . . . . . . . . $ 160,000 to $ 180,000Single, HOH, QW . . . $ 80,000 to $ 90,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Does not qualify
Roth IRAMFJ, QW . . . . . . . . . . . . $ 196,000 to $ 206,000Single, HOH . . . . . . . . $ 124,000 to $ 139,000MFS . . . . . . . . . . . . . . . . . . . $ 0 to $ 10,000
Lifetime Learning CreditMFJ . . . . . . . . . . . . . . . . . . . . $ 118,000 to $ 138,000Single, HOH, QW . . . $ 59,000 to $ 69,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Does not qualify
Retirement Savings Contributions Credit—AGI up to: Single,Rate MFJ HOH QW, MFS
50% $ 39,000 $ 29,250 $ 19,500 20% $ 42,500 $ 31,875 $ 21,250 10% $ 65,000 $ 48,750 $ 32,500 0% $ 65,001 $ 48,751 $ 32,501
Child Tax Credit/Credit for Other Dependents. Phaseout begins at:MFJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 400,000Single, HOH, MFS, QW . . . . . . . . . . . . $ 200,000
Tuition/Fees DeductionMFJ . . . . . . . . . . . . . . . . . . . . $ 130,000 to $ 160,000Single, HOH, QW ...$ 65,000 to $ 80,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Does not qualify
Adoption Expense Credit or ExclusionMFJ, Single,
HOH, QW . . . . . . . . $ 214,520 to $ 254,520
Additional Medicare Tax The additional Medicare tax is a 0.9% additional tax on combined wages, compensa-tion, and self-employment income above threshold amount.Filing Status Threshold AmountSingle, HOH, QW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $200,000MFJ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $250,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $125,000
Employee. An employer must withhold the additional Medicare tax on wages or compensation it pays to an individual in excess of $200,000 in a calendar year, without regard to the individual’s filing status or wages paid by another employer.
INDIVIDUAL PREPARATION FAST ANSWER CHARTS 2021TAX
YEAR
INDIVIDUAL
Individual 1-6
Business Use of Home MethodsSimplified Method Regular Method
Regular/exclusive use tests. Same rules. Same rules.Maximum square footage allowed for business.
300 square feet. No maximum.
Expenses allowed. $5 per square foot. Actual expenses determined and records
maintained.Depreciation deduction. No. Yes.Depreciation recapture on sale of home.
No. Yes.
Deduction cannot exceed gross income limitation.
Same rules. Same rules.
Carryover of expenses in excess of gross income limitation.
No. Yes.*
Home-related itemized deductions (i.e., mortgage interest and real estate taxes).
Claimed in full on Schedule A
(Form 1040), subject to limitation.
Allocated between Schedule A (Form 1040) and business schedule.
* Loss carryover from use of regular method in prior year may not be claimed in a year the simplified method is used. The loss is carried over until the next year the regular method is used again.
Employees. No deduction allowed. The business use of home deduction for employ-ees is suspended for tax years 2018 through 2025.
Schedule E (Form 1040) DetailsAt-risk limits. Losses are allowed only up to the amount of the taxpayer’s risk of financial loss from the activity.Passive activity loss limits. A taxpayer’s passive activity losses are allowed only up to the amount of passive activity gains for the year.Passive activities. Trade or business activities where the taxpayer does not ma-terially participate (such as an interest in a limited partnership). Rental activities are passive by statute, with the exception of real estate professionals and specific activities that are considered nonrental by regulation.Passive losses in year of disposal. A taxpayer can use accumulated passive activity losses to offset the passive income from the sale of a property, regardless of wheth-er the entity being sold created all losses being utilized.Rental property considered nonrental. Certain activities, such as short term rentals, rentals provided along with significant services, and activities where the rental is incidental to nonrental activities are not considered rental activities for the purposes of passive loss rules and are therefore not passive activities by default.Real estate professionals. Taxpayers who performed more than half of all their pro-fessional services during the year in a real property trade or business, spent at least 750 hours in the activity during the year, and materially participated in the activity.Real estate dealers. Income of a real estate dealer is subject to SE tax. A real estate dealer is a person whose primary business is to sell real estate to customers.
How to Classify Rental Property for Tax Treatment
Personal use for more than the greater of 14 days or 10% of days rented?Yes No
Rented for 14 days or less?Yes No
Personal residence.* Mixed-use property. Rental property.**
* Rental income not reported, expenses not allowed, report real estate taxes and qualified mortgage interest on Schedule A (Form 1040).
** Any rental income must be reported even for periods of 14 days or less.
Rental Real Estate Loss for Individuals
Did the taxpayer actively participate in and own 10% or more of rental real
estate activity?No
Regular passive loss limits apply.
Yes
Modified AGI greater than $100,000? ($50,000 MFS)? No
Up to $25,000 of the rental loss is allowed against non-passive income.
Yes $25,000 loss allowance is reduced by 50% of modified AGI over $100,000,
and phased out completely at $150,000 ($75,000 MFS).
Rental Activity Income
Real estate professional?Yes No
Not subject to passive loss limits Subject to passive loss limits
Was the rental income from an activity as a
real estate dealer? No Yes
Not subject to SE tax Subject to SE tax
Partnerships
Loss General Partner
Guaranteed payments and/or distributive share of income
Limited Partner Loss
Guaranteed Distributivepayments share of income
Subject to SE tax Not subject to SE tax
Material participation?Yes No
Not subject to passive loss limits
Working interest in oil or gas property where the partner has unlimited liability?Yes No
Subject to passive loss limits
Deducting Shareholder’s Suspended Pass-Through LossesCause of Suspended Loss Treatment at Liquidation
Basis limitation. Permanently lost.At-risk limitation. Offset gain recognized from disposition of
stock.Any remaining loss carried over indefinitely.
Passive activity rules. Suspended passive losses allowed.Exception: Loss is not allowed on the sale to a related party.
Excess business loss limitation. Treated as NOL carried over to next year.
Standard Mileage RatesBusiness . . . . . . . . . . . . . . . . . . . . 57.5¢ Medical and Moving . . . . . . . . . . . . . . . 17.0¢Charitable . . . . . . . . . . . . . . . . . . . 14.0¢ Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . 27.0¢
Per Diem Rates—Continental U.S. (CONUS)Effective: 10/1/20–9/30/21 10/1/19–9/30/20M&IE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $55 . . . . . . . . . . . . . . . . . . . . . $55Lodging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $96 . . . . . . . . . . . . . . . . . . . . . $96
Estate and Gift TaxGift tax annual exclusion per donee $15,000Gift tax annual exclusion to noncitizen spouse $157,000Estate and gift tax unified exclusion per decedent $11,580,000
Individual 1-5
Tax Rates: Capital Gain and Dividend IncomeIf income is… Maximum
tax rate %If asset is held…
Gain from the sale of collectibles 28% More than 1 year
Taxable portion of gain on qualified small business stock (section 1202 exclusion)
28% More than 5 years
Unrecaptured section 1250 gain 25% More than 1 year
Long-term capital gain See below More than 1 year
Qualified dividend income See below More than 60 days
Taxable IncomeSingle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $40,000MFJ/QW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $80,000MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $40,000HOH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0 to $53,600Estates and trusts. . . . . . . . . . . . . . . . . . . . . . $0 to $2,650
0%
Taxable IncomeSingle . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,001 to $441,450MFJ/QW . . . . . . . . . . . . . . . . . . . . . . . . $80,001 to $496,600MFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,001 to $248,300HOH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,601 to $469,050Estates and trusts. . . . . . . . . . . . . . $2,651 to $13,150
15%
Taxable IncomeSingle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$441,451 and overMFJ/QW . . . . . . . . . . . . . . . . . . . . . . . . . .$496,601 and overMFS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$248,301 and overHOH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$469,051 and overEstates and trusts. . . . . . . . . . . . . . $13,151 and over
20%
Short-term capital gain 37% 1 year or less
Ordinary dividend income 37% 60 days or less
Household Employee Filing Requirements ChartIf the taxpayer… Then…
Pays cash wages of $2,200 in 2020 to any one household employee (do not count wages paid to spouse, child under age 21, parent, or a nonprofessional employee under age 18 at any time in 2020).
Withhold and pay Social Security and Medicare taxes on all wages, including the first $2,200.
Pays cash wages of $1,000 or more in any calendar quarter of 2019 or 2020 to household employees (do not count wages paid to spouse, child under age 21, or parent).
Must pay federal unemployment tax (FUTA). Wages over $7,000 a year per employee are not taxable. The employer may also owe state unemployment tax.
File Schedule H (Form 1040), Household Employment Taxes, with tax return.
Net Investment Income Tax 3.8% additional tax on investment income if MAGI above threshold amount.
Filing Status Single, HOH MFJ, QW MFS
Threshold Amount $200,000 $250,000 $125,000
Net Investment Income: Income Not Net Investment Income:
• Interest.• Dividends.• Capital gains from sale of
stock, bonds, mutual funds, investment real estate.
• Capital gain distributions from mutual funds.
• Rental and royalty income.• Nonqualified annuities.• Business income from passive
activities.
• Wages.• Unemployment compensation.• Operating income from a nonpassive
business.• Social Security benefits.• Alimony.• Tax-exempt interest.• Self-employment income.• Alaska Permanent Fund Dividends.• Distributions from qualified plans or IRAs.
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Tax Treatment of Stock OptionsStatutory Stock Option (ISO) 1 Statutory Stock Option (ESPP) Nonstatutory Stock Option
Income subject to…2 Regular tax Regular tax Regular tax
At Grant Date Not subject to tax. Not subject to tax. Not subject to tax unless FMV is readily determined.
At Exercise Date Not subject to tax.Note: Taxpayer will generally receive Form 3921, Exercise of an Incentive Stock Option Under Section 422(b). Use Form 3921 to determine basis when ISO is sold.
Not subject to tax.Note: Taxpayer will generally receive Form 3922, Transfer of Stock Acquired Through an Employee Stock Purchase Plan Under Section 423(c). Use Form 3922 to determine basis when ESPP is sold.
Substantially vested stock: An amount equal to FMV of option minus the exercise price is treated as compensation (generally reported as code V, box 12, Form W-2).Restricted stock: Defer recognition until substantially vested.4
At Date of Sale (Holding period met) 3
• Income subject to capital gain or loss treatment.
• Basis equals exercise price.
• For options granted at a discount (less than FMV), the difference between the option price and the FMV of the stock at the grant date is treated as compensation (Form W-2).
• Excess gain is capital gain.• Loss is a capital loss.
• Holding period requirement not applicable.
• Income is subject to short-term or long-term capital gain or loss treatment.
• Basis equals the amount treated as compensation plus exercise price.
• A same-day exercise/sell transaction typically generates compensation equal to the FMV of the option minus the exercise price and a short-term loss equal to the broker transaction fees.
At Date of Sale (Holding period not met) 3
Gain on sale: An amount equal to the FMV of the option minus the exercise price is treated as compensation (Form W-2); excess gain is capital gain.Loss on sale: The loss is a capital loss.
• An amount equal to the FMV (at exercise date) of the option minus the exercise price is treated as compensation (Form W-2).
• Basis in the stock is increased by the amount included in compensation. Difference between the increased basis and the selling price is a capital gain or loss.
1 AMT adjustment may be required at exercise date and date of sale, unless stock is exercised and sold in same year. 2 Stock options exercised or restricted stock units (RSUs) settled after December 31, 2017, are eligible for a deferral of income election. 3 Required holding period for statutory stock options is one year from the exercise date and two years from the grant date.4 If employee made IRC section 83(b) election, restricted stock is treated the same as substantially vested stock. If no election made, the excess of the stock’s FMV at the
vesting date over the option price when the stock vests is treated as compensation (on Form W-2).
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Tab 6 Investment Income, B, D, 497 Tab 27 Starting a Business, Sch M-1/M-3
Tab 7 Rental, Passive, and At-Risk, E Tab 28 Sales, Dispositions, Liquidations
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Tab 9 Depreciation, 4562 Tab 30 Employee Health Benefi ts
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Tab 12 Children, College, and Family Tab 33 Business Audit Strategies
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Tab 18 C Corporations, 1120 Tab 39 Virtual Currency
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If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take ad-
You can claim more than one education benefit in a tax year as long as you do not use the same expenses for
Qualified expenses used to claim education benefits can also be used to eliminate the 10% penalty
For each student, you can elect for any year only one of the credits. For example, if you elect to claim the Ameri-can Opportunity Credit for the student in 2019, you can-not use that same student’s qualified education expens-
Deductions reduce the amount of income subject to in-come tax. Deductions for education expenses include:Student loan interest deduction up to $2,500 from gross income. Income limitations apply.Business deduction on Schedule C or F. You can de-duct the cost of education related to the business or
Education Tax CreditsTax credits reduce the amount of income tax you may have to pay. Income limitations apply. The education credits are claimed on Form 8863, Education Credits(American Opportunity and Lifetime Learning Credits).
Education Tax Benefits • American Opportunity Credit, $2,500 maximum per student per year.• Lifetime Learning Credit, $2,000 maximum per tax return per year.
Income LimitsThe American Opportunity Credit is phased out at mod-ified AGI between $80,000 and $90,000 ($160,000 and $180,000 MFJ) in 2019.The Lifetime Learning Credit is phased out at modified AGI between $58,000 and $68,000 ($116,000 and $136,000 MFJ) in 2019.
Penalty-Free IRA DistributionsIf you withdraw money from your IRA before you are age 59½, you are generally subject to a penalty of 10% of the distribution, in addition to any tax that may be due on the distribution.• The 10% penalty does not apply to traditional IRA or Roth IRA withdrawals, if you use the money to pay qualified education expenses for yourself, spouse, or for any child or grandchild of yourself or your spouse.• Qualified education expenses include tuition, fees, books, supplies, equipment, and special needs servic-es required for enrollment or attendance at an eligible educational institution. Room and board for students enrolled at least half-time in a degree or certificate program may also qualify.
• Reduce qualified expenses by scholarships and other tax-free assistance the student receives, but not by gifts or inheritances.
Education Tax Benefits2019
TAX YEAR
Portrait
TAX OFFICE123 TAX PREP LANETAX CITY, MN 55555
Education Tax CreditsTax credits reduce the amount of income tax you may have to pay. Income limitations apply. The education credits are claimed on Form 8863, (American Opportunity and Lifetime Learning Credits).
Education Tax CreditsTax credits reduce the amount of income tax you may have to pay. Income limitations apply. The education credits are claimed on Form 8863, (American Opportunity and Lifetime Learning Credits).
Education Tax CreditsTax credits reduce the amount of income tax you may
Education Tax Benefits
2019TAX YEAR
TAX OFFICE123 TAX PREP LANE
TAX CITY, MN 55555
If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your
Education Tax BenefitsIf you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your
If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your
If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your
If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your
Deductions reduce the amount of income subject to income tax. Deductions for education expenses include:Student loan interest deduction up to $2,500 from gross income. Income limitations apply.Business deduction on Schedule C or F. You can deduct the cost of education related to the business or farm activity.
gross income. Income limitations apply.Business deduction on Schedule C or F. You can deduct the cost of education related to the business or farm activity.
gross income. Income limitations apply.Business deduction on Schedule C or F. You can deduct the cost of education related to the business or
gross income. Income limitations apply.Business deduction on Schedule C or F. You can deduct the cost of education related to the business or
gross income. Income limitations apply.Business deduction on Schedule C or F. You can de
farm activity.farm activity.
Deductions reduce the amount of income subject to income tax. Deductions for education expenses include:Student loan interest deduction up to $2,500 from
Deductions reduce the amount of income subject to income tax. Deductions for education expenses include:Student loan interest deduction up to $2,500 from
Deductions reduce the amount of income subject to income tax. Deductions for education expenses include:Student loan interest deduction up to $2,500 from
Deductions reduce the amount of income subject to income tax. Deductions for education expenses include:Student loan interest deduction up to $2,500 from
Deductions reduce the amount of income subject to income tax. Deductions for education expenses include:Student loan interest deduction up to $2,500 from
farm activity.farm activity.
If you pay tuition, fees, and other costs for attendance at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.You can claim more than one education benefit in a tax year as long as you do not use the same expenses for more than one benefit.Exception: Qualified expenses used to claim education benefits can also be used to eliminate the 10% penalty on premature IRA distributions.For each student, you can elect for any year only one of the credits. For example, if you elect to claim the American Opportunity Credit for the student in 2019, you cannot use that same student’s qualified education expenses to figure the Lifetime Learning Credit for 2019.
Exception:benefits can also be used to eliminate the 10% penalty on premature IRA distributions.For each student, you can elect for any year only one of the credits. For example, if you elect to claim the Ameri
Exception:benefits can also be used to eliminate the 10% penalty on premature IRA distributions.For each student, you can elect for any year only one of the credits. For example, if you elect to claim the Ameri
Exception:benefits can also be used to eliminate the 10% penalty on premature IRA distributions.For each student, you can elect for any year only one of the credits. For example, if you elect to claim the Ameri
Exception:benefits can also be used to eliminate the 10% penalty on premature IRA distributions.For each student, you can elect for any year only one of the credits. For example, if you elect to claim the Ameri
at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.You can claim more than one education benefit in a tax year as long as you do not use the same expenses for more than one benefit.Exception: Qualified expenses used to claim education
at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.You can claim more than one education benefit in a tax year as long as you do not use the same expenses for more than one benefit.Exception:
at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.You can claim more than one education benefit in a tax year as long as you do not use the same expenses for more than one benefit.Exception:
at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.You can claim more than one education benefit in a tax year as long as you do not use the same expenses for more than one benefit.Exception:
at an eligible educational institution for yourself, your spouse, or your dependent, you may be able to take advantage of one or more of the education tax benefits.You can claim more than one education benefit in a tax year as long as you do not use the same expenses for more than one benefit.Exception:
the credits. For example, if you elect to claim the American Opportunity Credit for the student in 2019, you cannot use that same student’s qualified education expenses to figure the Lifetime Learning Credit for 2019.
Education Deductions.Deductions reduce the amount of income subject to in
the credits. For example, if you elect to claim the American Opportunity Credit for the student in 2019, you cannot use that same student’s qualified education expenses to figure the Lifetime Learning Credit for 2019.
Education Deductions.Deductions reduce the amount of income subject to in
the credits. For example, if you elect to claim the American Opportunity Credit for the student in 2019, you cannot use that same student’s qualified education expenses to figure the Lifetime Learning Credit for 2019.
Education Deductions.Deductions reduce the amount of income subject to in
the credits. For example, if you elect to claim the American Opportunity Credit for the student in 2019, you cannot use that same student’s qualified education expenses to figure the Lifetime Learning Credit for 2019.
Education Deductions.Deductions reduce the amount of income subject to in
the credits. For example, if you elect to claim the American Opportunity Credit for the student in 2019, you cannot use that same student’s qualified education expenses to figure the Lifetime Learning Credit for 2019.
Education Deductions.Deductions reduce the amount of income subject to in
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Every year we release ten courses covering various professions, specific topics, and unique tax situation. Based on popularity and requests, some courses will rotate yearly. The following courses will be available one year from release date. Take them now before they are gone! All courses released 9/15/21 and available through 9/15/22.
3 HOURS
ADVANCED BUSINESS
TOPICS
1 HOUR
HIGH INCOME
TAXPAYERS
1 HOUR
DATA SECURITY
4 HOURS
SELF- EMPLOYED
4 HOURS
CLIENTSWITH
DEPENDENTS
1 HOUR
INNOCENT OR INJURED
SPOUSE RELIEF
1 HOUR
DEATHOF A
TAXPAYER
1 HOUR
SHARING/GIG ECONOMY
2 HOURS
FOREIGN TAX
ISSUES
2 HOURS
TRUSTS
Non-exempt tax professionals who participate in the Annual Filing Season Program (AFSP) are required to complete the Annual Federal Tax Refresher (AFTR) course. Learn more at www.thetaxbook.com/AFTR.Released 6/15
This course satisfies the CTEC 5 hour California state tax requirement for CRTPs. Content includes rules for individuals, partnerships, LLCs, corporations, estates and trusts, and more.Released 2/1
Several professional credentials require two hours of Ethics each year. We offer three educational and entertaining courses to fulfil your Ethics requirement.Released 9/15
TTB Bundle & Jacob Special
Includes 8 Hours
LIMITED TIME COURSES
COMPLIANCE COURSES5
“TheTaxBook offers some of the best and most affordable CPE courses that I “TheTaxBook offers some of the best and most affordable CPE courses that I have taken. I really like the examples and key facts.”have taken. I really like the examples and key facts.”
Receive free Online CPE hours
for products purchased.
WebLibrary Plus5 Hours
WebLibrary2 Hours
Additional Users1 Hour Per User
TheTaxBook Series1 Hour Per Book
James Bailey, Frederick, MD
10
OnlineCPE
FREE ONLINE CPE HOURS!
14 866-919-5277 • thetaxbook.com • Tax research solutions for time-crunched tax professionals.
WHY
11
Don’t waste time searching the Internet to fi nd answers
to your tax questions.
TheTaxBook is continually voted the #1 tax research solution in the industry.
Providing fast and accurate service to your clients adds credibility to your practice.
Every purchase includes access to coverage of the
latest tax legislation and tax industry news.
100% satisfaction is guaranteed.
Gain access to a stockpile of useful tools including organizers, engagement
letters, and more.
Don’t put your reputation on the line based on search
results from random Internet sites.
Use our message board to interact and ask
questions with fellow tax professionals.
Time is Money
Use the Best
Look Good
Industry News
No Risk
Free Tools
Accuracy
Message Board
G
uarante
e
Satisfaction
Our authors know what you need in a fast-answer tax research book because, like you, they prepare tax returns.
WRITTEN EXCLUSIVELY BY PRACTICING TAX PREPARERS!
Over 100 combined years of fast-answer writing experience!
Over 100 combined years of fast-answer writing experience!
100100++YEARSYEARS
Use TheTaxBook the entire tax season. If it did not meet
your expectations, return it by April 15 for a full refund.
SATISFACTION GUARANTEED
SATISFACTION CUSTOMER
RATINGSATISFACTION
CUSTOMER
RATING
Highest published customer satisfaction rating in the industry.
Guaranteed Coverage of New Tax Law Through December 1! TheTaxBook will contain coverage of any applicable tax law change which
occurs on or before December 1.
ACCURACY MATTERS!
Plus we provide free coverage of new federal tax laws passed after
the books ship.thetaxbook.com/updates
Founded in 2005, TheTaxBook is a small, 100% American-owned company, located in Minnetonka, Minnesota. As a small company, we realize that each dollar you spend was hard earned and must bring true value.
It is our passion to provide the best products at the best prices. Please use our products for the 2021 tax season!Sincerely, the Meyer Family
A TRADITION OFQUALITY & VALUE!
FAMILY OWNED, AMERICAN MADE!
15866-919-5277 • thetaxbook.com • Tax research solutions for time-crunched tax professionals.
FREE SERVICES & QUANTITY DISCOUNT
$$19.50 Retail 19.50 Retail Value PerValue PerCPE HourCPE Hour
Product Free OnlineCPE Hours
Retail Value
TheTaxBook Series 1 hour per book $ 19.50
WebLibrary Plus 1st User 5 hours per 1st user $ 97.50
WebLibrary 1st User 2 hours per 1st user $39.00
Additional Users 1 hour per additional user $19.50
Popular Tools for Tax Pros
Tax Organizers: Individual, Sole Proprietor, LLC, C Corporation, S Corporation
Consent to Disclose Information
Engagement Letter
Estate Inventory Worksheet
Fair Market Value Guide for Noncash Contributions
Depreciation Worksheet
Find coverage of new legislation and industry news.
Purchase any title from TheTaxBook Series, or a WebLibrary User, and receive free Online CPE Hours for each product purchased.
Deluxe Edition PlusDeluxe Supplement1040 EditionSmall Business All States EditionCalifornia Edition
Depreciation Social Security & MedicareWhat’s New Early EditionWhat’s New Tax Season EditionFastTaxFacts
Do you have questions about a client’s tax return? Use our Message Board to ask a fellow tax preparer. The Message Board is exclusive to our customers and not available to the general public.
Find pages in TheTaxBook affected by new tax law. Updates provided in PDF format for easy printing.
5 FREE SERVICES INCLUDED WITH ALL ORDERS
TAX INDUSTRY NEWS
MESSAGE BOARD
THETAXBOOK UPDATES
1
Electronic printable documents tax professionals use to provide disclosures, record keeping, substantiation, and more.
TOOLS FOR TAX PROS3
FREE ONLINE CPE HOURS
THETAXBOOK SERIES
2
4
5
Order 3 items, take$5 OFF per item.
Order 11+ items, take$7 OFF per item.
Quantity Discount
1– 2 Items
3 – 10 Items
11+ Items
N/A$ 5 Off
Per Item$ 7 Off
Per Item
QUANTITY DISCOUNTSThe more you buy, the more you save! Buy 3 or
More and SAVE!
Learn more at: thetaxbook.com/freeservices
16 866-919-5277 • thetaxbook.com • Tax research solutions for time-crunched tax professionals.
Special Offers
Rev. 04/21
HandoutsClient
Deluxe Edition Plus pg 2 $99WebLibrary Plus 1st User pg 7 $2798 Online CPE Hours pg 12 $119Free Shipping $7
Total Retail Value $504
Deluxe Edition Plus pg 2 $99WebLibrary Plus 1st User pg 7 $279Client Handouts pg 10 $ 1498 Online CPE Hours pg 12 $119Free Shipping $7
Total Retail Value $653
WebLibrary OnlineCPE
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WHAT’S NEW PACKAGEStay up-to-date on the latest tax law changes and industry news. Includes coverage of the American Rescue Plan Act of 2021 and the Consolidated Appropriations Act, 2021.
Tabs include: What’s New Summary, Individuals, Employers, Businesses, Retirement Plans, Planning, Miscellaneous Tax Provisions
Early Edition $69Tax Season Edition $69Free Shipping $14
Total Retail Value $152Early Edition / Tax Season Edition
$69 each
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Add a User to the TTB Bundle or Jacob Special for Only $149! Includes Deluxe Edition Plus, WebLibrary Plus Add User, 2 Online CPE Hours & Free Shipping ($290 Retail Value!)
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The Deluxe Edition Plus is our best selling book. The Deluxe Supplement is the perfect complement to the Deluxe Edition Plus and includes expanded small business topics. Purchase both books and save!