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© Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.1 Federal Income Tax Overview for Individuals.

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Presentation on theme: "© Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.1 Federal Income Tax Overview for Individuals."— Presentation transcript:

1 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.1 Federal Income Tax Overview for Individuals

2 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.2 Basic Formula

3 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.3 Basic Formula

4 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.4 Basic Formula

5 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.5 Basic Formula

6 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.6 Basic Formula Tables (req if TI < $100,000) Rate Schedules

7 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.7

8 8

9 9 Basic Formula

10 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.10 Basic Formula Prepayments –Withholding –Estimate payments

11 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.11 Source: http://macnelly.com/shoefolder/shoe_archive.asp

12 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.12 Basic Formula Prepayments –Withholding –Estimate payments

13 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.13 Basic Formula Prepayments –Withholding –Estimate payments Credits –Popular –Visible

14 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.14 Which would you prefer? Assume 30% marginal rate –$20 deduction or –$20 credit credit

15 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.15 Which would you prefer? Assume 30% marginal rate –$100 deduction or –$100 credit credit

16 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.16 Which would you prefer? Assume 30% marginal rate –$100 deduction or –$20 credit deduction

17 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.17 Which would you prefer? Assume 30% marginal rate –$100 deduction or –$50 credit credit

18 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.18 Basic Formula

19 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.19 Basic Formula

20 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.20 Business Personal Generally speaking …

21 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.21 More about FROM

22 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.22 Deductions FROM AGI I.Choose LARGER of A.Standard Deduction B.Itemized Deductions

23 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.23 Deductions FROM AGI I.Choose LARGER of A.Standard Deduction B.Itemized Deductions 1.Filing status

24 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.24 Standard Deduction Filing Status See p. 2/10 & front cover Single$6,100 H of H$8,950 M F J$12,200 M F S$6,100

25 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.25

26 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.26 Deductions FROM AGI I.Choose LARGER of A.Standard Deduction B.Itemized Deductions 1.Filing status 2.Extras (TP & Spouse) a.Age b.Blindness

27 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.27 EXTRAS for Age & Blind See page 2/11 Single$1,500 Married$1,200

28 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.28 Listen and consider these situations… Extras –Single$1,500 –Married$1,200 See p. 2/10 & front cover Single$6,100 H of H$8,950 M F J$12,200 M F S$6,100 ???

29 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.29 Listen and consider these situations… Extras –Single$1,500 –Married$1,200 See p. 2/10 & front cover Single$6,100 H of H$8,950 M F J$12,200 M F S$6,100 H (68) W (58) Son (28) (blind) $13,400

30 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.30 Listen and consider these situations… Extras –Single$1,500 –Married$1,200 See p. 2/10 & front cover Single$6,100 H of H$8,950 M F J$12,200 M F S$6,100 H (71) W (67) (blind) $15,800

31 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.31 Listen and consider these situations… Extras –Single$1,500 –Married$1,200 See p. 2/10 & front cover Single$6,100 H of H$8,950 M F J$12,200 M F S$6,100 H (67) (blind) Son (23) (blind) $14,600, $11,950 or $9,100

32 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.32 Deductions FROM AGI I.Choose LARGER of A.Standard Deduction B.Itemized Deductions 1.Filing status 2.Extras (TP & Spouse) a.Age b.Blindness 3.Minimum

33 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.33 Minimum Standard Deduction (when dependents claimed by parents) See page 2/24 $1,000 or Earned Income + $350 $1,000 min $6,100 max

34 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.34 Minimum Standard Deduction (when dependents claimed by parents) Dependent child Earned $6,300 Interest $3,000 Calculate Std Ded $1,000 min $6,100 max

35 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.35 Minimum Standard Deduction (when dependents claimed by parents) Dependent child Earned $300 Interest $3,000 Calculate Std Ded $1,000 min $6,100 max

36 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.36 Minimum Standard Deduction (when dependents claimed by parents) Dependent child Earned $3,000 Interest $1,000 Calculate Std Ded $1,000 min $6,100 max $3,300

37 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.37 Deductions FROM AGI I.Choose LARGER of A.Standard Deduction B. Itemized Deductions 1.Filing status 2.Extras (TP & Spouse) a.Age b.Blindness 3.Minimum

38 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.38 Itemized Deductions Medical Taxes Interest Charitable contributions Casualty Losses Other

39 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.39 Deductions FROM AGI I.Choose LARGER of A.Standard Deduction B. Itemized Deductions 1.Filing status 2.Extras (TP & Spouse) a.Age b.Blindness 3.Minimum

40 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.40 Deductions FROM AGI I. Choose LARGER of A.Standard Deduction B.Itemized Deductions II. Exemptions ($3,900) A.Personal B.Dependents

41 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.41 Deductions FROM AGI I. Choose LARGER of A.Standard Deduction B.Itemized Deductions II. Exemptions ($3,900) A.Personal B.Dependents Five Tests (prior to ’05)

42 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.42 Five Tests for Dependents Support Gross income Exceptions (prior to ’05)

43 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.43 Exceptions to GI Test CHILD –Under 19 or –Full-time student under 24 (prior to ’05)

44 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.44 Five Tests for Dependents Support Gross income Member of Household OR Relationship Citizenship Joint return (prior to ’05)

45 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.45 * (entire year) Personal Dependents (after ’04) REQUIREMENTS FOR ALL qual IDcitizenjoint return claim no other dep CHILDRENOTHERS relationship age support abode (>1/2) relationship * gross income support

46 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.46 Deductions FROM AGI I. Choose LARGER of A.Standard Deduction B.Itemized Deductions II. Exemptions ($3,900) A.Personal B.Dependents

47 © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.47 Federal Income Tax Overview for Individuals

48 48 * (entire year) Personal Dependents (after ’04) REQUIREMENTS FOR ALL qual IDcitizenjoint return claim no other dep CHILDRENOTHERS relationship age support abode (>1/2) relationship * gross income support © Copyright 2006 - 2013 by M. Ray Gregg. All rights reserved.

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