Vocabulary
A credit for qualifying education expenses paid for an eligible student to an eligible educational institution. One restriction is that the expenses must be for the first four years of higher education.
What is the American Opportunity Tax Credit? (AOTC)
A taxpayer using the MFS status may still qualify for the AOTC or lifetime learning credit?
What is false?
An annual tax imposed on certain personal property, such as cars or boats, and based on the value of the property.
What is personal property tax?
The maximum allowed refundable portion of the AOTC?
What is $1000
A _______ is a tax-advantaged retirement savings plan available for employees of the following types of organizations:
What is 403(b) Plan?
Reasonable steps taken by a tax preparer to satisfy compliance with the tax law and ensure that a tax return is correct
What is Due Diligence?
There is no minimum or maximum age limit for contributing to either a traditional or a Roth IRA.
What is true?
Taxpayers of any age who have earned income or taxable compensation are eligible, including a child who is claimed as a dependent on another return or a taxpayer who is working during their retirement.
Gift to a qualified charitable organization, generally deductible on Schedule A. Or Money placed in a retirement fund, such as an individual retirement arrangement or an employer-maintained retirement plan.
What is a contribution?
The _____________ has no requirement that the student attend school on at least a half-time basis. This credit can be taken for one course, as long as it is at an eligible higher educational institution, as well as being a part of a degree program or to acquire or improve job skills.
What is lifetime learning credit?
The age at which a worker qualifies to receive full social security benefits.
A nonrefundable credit equal to 20% of the first $10,000 of qualified higher education tuition and fees paid during the year on behalf of the taxpayer, their spouse, or their dependents.
What is the Lifetime learning credit?
The cost of a smoking cessation program is deductible as a medical expense.
What is true?
The deduction may include the cost of treatment and prescription drugs designed to alleviate the effects of nicotine withdrawal. Costs for nicotine gum and patches not requiring prescriptions are not deductible.
Money or property a taxpayer receives from a retirement plan, such as an individual retirement arrangement (IRA) or an employer-maintained retirement plan.
What is distribution?
The __________ is partially refundable.
What is AOTC?
On form 1099-R, in what box will you find the code for the different types of distributions?
What is Box 7?
The amount at which property would change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell, and both having reasonable knowledge of the relevant facts.
What is the fair market value?
A prior felony conviction for possessing or distributing a controlled substance disqualifies taxpayers from claiming education credits.
What is False?
It disqualifies the taxpayer from claiming the AOTC, but they still may qualify for the lifetime learning credit.
A qualified transfer of funds from one tax-favored account to another, usually of the same type.
What is rollover?
Can a taxpayer claim both the AOTC & Lifetime learning credit on the same return?
What is yes, pending that they are claimed for different students.
Form from an eligible educational institution that shows the total amount of payments received by the institution for the student's qualified expenses.
What is Form 1098-T?
Certain personal expenditures allowed to be deducted from adjusted gross income by the Tax Code. Examples include certain medical expenses, qualified interest on home mortgages, and charitable contributions.
What are itemized deductions?
Membership dues to a gym, health club, or spa are deductible expenses.
What is false?
The cost or other original basis of property reduced by adjustments, such as depreciation allowed or allowable, and increased by capital improvements and other adjustments.
What is adjusted basis?
The ______________ is nonrefundable.
What is the Lifetime learning credit?
What form are social security benefits that taxpayers received during the year reported on?
What is Form SSA-1099?