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This course has been updated to include content on the Emergency Economic Stabilization Act of 2008
This outstanding course covers the more difficult aspects of individual federal tax returns. It is the perfect follow up for the primer “Nuts and Bolts” course. These two courses comprise the individual tax review series, which provide the latest practical insights from nationally recognized tax experts. Both courses will not only drill down on the critical tax areas, but they will also cover the latest tax developments. You will learn how to apply the latest changes when preparing federal individual income tax returns and advise clients on new developments and tax-saving ideas for individuals. Many key tax return issues are covered in this course.
Objectives:
Prerequisite: None
733631
Chapter 4
Adjustments to Income
Learning Objectives
After completing this chapter, you should be
Introduction
This chapter covers the adjustments to total income that are deductible "above-the-line" on page one of Form 1040.
Adjustments to Income
Summary of Adjustments
A number of adjustments to total income are deductible "above-the-line" on page one of Form 1040. Several of these adjustments are discussed in this chapter.
Educator Expenses
Overview
An eligible educator is allowed an above-the-line deduction in arriving at AGI of up to $250 for classroom expenses [~§~62(a)(2)(D)]. The Tax Relief and Health Care Act of 2006 (TRHCA) retroactively reinstated this deduction for tax years beginning in 2006 and 2007. This deduction is set to expire as of December 31, 2007. However, it has been reinstated several times in the past.
Eligible Educator
An eligible educator is a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide in a K-12 school for at least 900 hours during a school year.
Eligible Expenses
Eligible expenses for the deduction include books, supplies (other than non-athletic supplies for courses of instruction in health or physical education), computer equipment (including related software and services), and other equipment and supplementary materials used by the educator in the classroom. These expenses must meet the definition of ~§~162 ordinary and necessary employee business expenses.
The statute also provides that expenses are allowed only to the extent they are not otherwise reimbursed through a tax-free withdrawal from a ~§~529 plan, a ~§~530 Coverdell Education Savings account, or a ~§~135 tax-free savings bond redemption. However, an educator's personal continuing education expenses that might be reimbursed under one of these three arrangements would be unlikely to overlap with the definition of eligible K-12 classroom supplies.
In addition, qualified expenses must be reduced by any employer reimbursements not reported in Box 1 of Form W-2.
733631
Customer Service
Customer Service
Customer Service
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