Mary B Pearson, CPA Assistant Professor of Accounting Personal Income Tax Mary B Pearson, CPA Assistant Professor of Accounting

Topics Discussed: New Income Tax Legislation & Falsities Q&A IRS Tax Scams Tax Brackets Individual Capital Gains Standard Deduction/Exemption Itemized Deductions/Sch A HSA Accounts Tax Credits Earned Income Credit Child Tax Credit Education Credit Student Loan Interest Deduction Retirement Questions Q&A

IRS Tax Scams The IRS does not contact you by phone, email or text message. The IRS does not threaten lawsuits, imprisonment or enforcement action. The IRS does not demand payment by debit card, gift card or wire transfer on the phone or in writing. The IRS system was hacked in 2014 and over 1,000,000 of individuals information was compromised.

IRS Tax Scams Filing your tax return early does not guarantee refunds, or a likelihood your tax return will not be audited. By filing electronically you are decreasing the time to receive your refund and decreasing common errors found on paper prepared tax returns.

2016 Tax Brackets

Capital Gains Tax Rates Long Term Capital Gains tax is imposed on sale of investment assets (stocks, land, rental property) where the sales price exceeds your basis. Still favorable tax treatment on sale of personal residences!

Exemption/Standard Deduction Amounts Exemption amount = $4,050 per dependent

Itemized Deductions Medical and Dental Expenses in excess of 10% of AGI (Not expenses paid out of HSA funds) State Income Tax paid in 2016 or General Sales Tax Real Estate Tax Personal Property Tax if not a Utah Resident

More Itemized Deductions Mortgage Interest & Points paid on Primary Residence 1st and 2nd Mortgage & Mortgage Interest on Second Home. Mortgage Insurance Premiums Cash & Non-Cash Charitable Gifts & Mileage deductible at 14 cents per mile

More Itemized Deductions Employee Business Expenses in excess of 2% of AGI Mileage at .54 cents per mile Publications, Books, Supplies Conferences Travel Expenses Tax Return Preparation Fees

Medical Expense Deduction Take Advantage of Health Savings Accounts (HSA) New threshold for medical and dental deduction is 10% for taxpayers under 65 makes it harder to deduct expenses as an itemized deduction.

Taxes?!

What tax credits can I take? Child & Dependent Care Credit Retirement Savings Credit: Eligible if you contribute to a Retirement Account and AGI is less than $61,500. (10% credit) Child Tax Credit: $1,000 for each eligible dependent under the age of 17. AGI cannot be greater than $130,000 MFJ. Residential Energy Credits Solar Credit = 30% of the expenditure, not refundable. Adoption Credit: $13,460

What Education Expenses can I deduct? Item Education Amount Covered Expenses Income Phase Out American Opportunity Credit 4 years of Post Secondary Education $2,500 per yr & student 40% of credit is refundable Tuition, Fees, Books, and Supplies $180,000 MFJ $90,000 Single Lifetime Learning Credit Post Secondary $2,000 per taxpayer 20% of expenses $122,000 MFJ $61,000 Single Tuition & Fees Deduction $4,000 per year Qualified Tuition & Fees $160,000 MFJ $80,000 Single/Hof H

Can I deduct Student Loan Interest? Student Loan Interest: Can deduct up to $2500 if AGI is less than $75,000 Single, $150,000 MGJ

Earned Income Credit

Can I contribute to a Roth IRA? Roth IRA: Non Deductible Can contribute up to $5500 if under 50 and $6500 if over 50 and: AGI is less than $194,000 MFJ AGI is less than $132,000 Single

Other Great Information! Taxes Due April 18 2017 No refunds relating to Earned Income Credit or Child Tax Credits will be disbursed until after February 15th. If you claim any education or child tax credits and you are not eligible, you may not be able to claim them for 10 years. Standard Mileage rate = .54 per mile Medical Mileage rate = .19 per mile