1. Lesson 4 Deductions and Tax Computations

2. OBJECTIVES Identify the correct standard deduction. Calculate and accurately report itemized deductions on Schedule A. Identify the miscellaneous deductions reported on Schedule A, lines 22 through 22 that are subject to the 2% AGI limitation. Complete the Qualified Dividends and Capital Gain Tax Worksheet. Explain the process to calculate and report tax liability.

3. Intake/Interview Process Form 13614 – Intake and Interview Sheet – Credits Section

4. Standard Deduction Based on the following factors: – Filing Status – Dependency Status – Blindness – Age

5. Taxable Income Computation Taxable income less than $100,000

6. Itemized Deductions Standard Deduction vs Itemized Deductions When MFS taxpayer must itemize deductions

7. Medical Expenses Whose expenses What expenses –Deductible –Nondeductible Long-Term Care Premiums New tax law –Medical standard mileage rate

8. Taxes State and Local Income Taxes Real Estate Tax Personal Property Tax

9. Interest Home Mortgage Points Investment

10. Contributions Recipient Deductible Nondeductible

11. Miscellaneous Deductions on Schedule A Expenses subject to the 2% Adjusted Gross Income (AGI) limitation vs. expenses not subject to the 2% AGI limitation

12. Total Itemized Deductions Work Exercise 6

13. Taxable Income Computation Taxable income less than $100,000 Qualified Dividends and Capital Gain Tax Worksheet

14. Quality Review (QR) Form 8158 – Quality Review Checklist Adjustments, Deductions, and Credits Section

15. Lesson Summary Standard Deduction or Itemized Medical Expenses, Taxes, Interest, Contributions, Miscellaneous Deductions Tax Charts Qualified Dividends and Capital Gains worksheet

16. Travel Expenses Fully reimbursed Accountable Plan Adequate records Form 2106

17. Deductible Expenses Away from home Local travel Meals Reimbursable Expenses

18. Reservists Temporary Active Duty More than 100 miles Form 2106

19. Other Miscellaneous Deductions Worn off-duty? Uniform allowances Insignia of rank, corps devices, epaulets, aiguillettes, and swords Professional society dues

20. Educational Expenses Qualifications Deductible Expenses Education Credits

21. Business Travel Expenses Travel Expenses Deductible Expenses –Car, Meal, Home Leave How To Report Form 2106 Foreign Earned Income Exclusion

22. Military/International Summary Travel Expenses Uniforms Professional dues Education Home Leave