Question

) Amy has an AGI of $10,000. She made cash contribution of $8,000 to the Food Bank. How much can she deduct on her income tax return.

I.                    Since she contributed to public charity she can deduct $5,000 II.                  The remaining $3,000 can be carried forward up to 5 years.

A)     Only I is correct B)      Both are correct C)      Neither is correct D)     Only II is correct

8) Which of the following taxes can be deducted?

A)     Federal Income Tax

B)      Personal Property Tax

C)      State & Local Inheritance Taxes

D)     Non-business gasoline tax.

9) What is the maximum itemized deduction on student loan interest for a married filing jointly couple?

A)     5000

B)      2,500

C)      2,000

D)     0

10) Jana, a flight attendant, had an AGI of $50,000 for the year and itemized her deductions. She has the following expenses for the year. What was her total deductible misc. item deduction (after any limitations)?

Legal Fees Relating to her Divorce: $3,000 Flight Attendant Uniform: $200 Flight Attendant Union Dues: $500 Subscription to Skymall: $30

A)     $0 B)      $2,730 C)      $2,030 D)     $2,700

6) Barbara had the following medical expenses in 2015:

Bladder Surgery: 2,400 Over the counter aspirin: 200 Teeth Whitening: 800

Her insurance reimbursed her for $500 for the bladder surgery. Her AGI was $12,000. How much is she allowed to deduct? A)     $700 B)      $3400 C)      $900 D)     $0

Answer 1

7) Ans - (A)

She Can Deduct only 5000 and she can't carry forward the Contribution over Cap Limit of 50%

8) Ans - (B)

Explanation

(A)You cannot deduct federal taxes on your federal return, with the exception of estimated taxes you paid to the IRS.

(B) Individuals can deduct personal property taxespaid during the year as an itemized deduction on Schedule A. Personal property taxes are taxes that are imposed by a state or local tax authority based on the value of an individual's personal property.

(C) You can't deduct these taxes. However, you can increase the cost basis of your property by the amount of the assessment. Local benefits taxes are deductible only if they're for maintenance, repair, or interest charges related to those benefits.

(D) You can't Deduct Non-business gasoline tax

9.) Ans - (B) - 2,500

You can deduct up to $2,500 of student loan interest paid in a given year. As with many tax rules, there is an income limit to this deduction. Your modified adjusted gross income cannot be more than $80,000 (or $160,000 for married couples filing jointly).

10) Ans - (A) - 0

Explanation : Legal Fees paid to relating to her Divorce is not eligible for deduction as Misc Item Deduction

2% of AGI = 1000

Total Misc Expenditure = 730 (200+500+30)

Since 730<1000, Jana is not eligible for Misc itemized deduction

only Expenditure above 2% is Eligible for Deduction as Misc Item Deduction

6.) Ans - (A) - 700

Explanation: Over the Counter and Teeth Whitering Expense are Not ELigible for Decution as Medical Expenses

Bladder Surgery Expenses = 2400-Reimbursement Exp 500 = 1900

10% of AGI = 1200 (12000*10%

So Medical Expenses Eligible to Deduct = Over the 10% of AGI = 1900-1200 = 700