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

2. 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

3. IRS Tax Scams
The IRS does not contact you by phone, 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.

4. 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.

5. 2016 Tax Brackets

6. 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!

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

8. 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

9. 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

10. 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

11. 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.

12. Taxes?!

13. 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

14. 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

15. 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

16. Earned Income Credit

17. 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

18. Other Great Information!
Taxes Due April
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