Enrolled Agent > EA - Part 1: Individuals > Unit 12: Standard Deduction and Itemized Deductions > Flashcards

Unit 12: Standard Deduction and Itemized Deductions Flashcards

Compare standard and itemized deductions to determine the most beneficial approach for the taxpayer. (80 cards)

Study These Flashcards
1
Q

What is the standard deduction for a single filer in 2025?

A

$15,750

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Who is eligible for an additional standard deduction?

A
  • Taxpayers 65 or older
  • Taxpayers who are blind or partially blind
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the additional standard deduction amount for unmarried taxpayers who are 65 or older or blind in 2025?

A

$2,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

True or False:

A taxpayer who dies before their 65th birthday can still receive the higher standard deduction for being 65.

A

False

The higher standard deduction for being 65 does not apply if the taxpayer dies before their 65th birthday.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the standard deduction for dependents in 2025?

A

The greater of $1,350 or earned income plus $450, not exceeding the basic standard deduction for their filing status.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Which taxpayers are required to itemize deductions and cannot take the standard deduction?

A
  • MFS filers whose spouses itemize
  • Nonresident Aliens
  • Taxpayers with a short tax year due to a change in accounting methods
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the AGI threshold for deducting medical expenses?

A

7.5% of adjusted gross income

(AGI)

Only unreimbursed medical expenses exceeding this threshold can be deducted.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What types of expenses qualify as deductible medical expenses?

A
  • Fees paid to doctors and hospitals
  • Treatment for alcohol or drug addiction
  • Insulin and prescription drugs (but not over-the-counter meds)
  • Dental and vision care (including eyeglasses and contact lenses)
  • Veterinary care for service animals
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is required for a taxpayer to qualify for the additional deduction for blindness?

A

A statement from an eye doctor stating that their vision cannot be corrected to better than 20/200 or that their peripheral vision is limited to 20 degrees.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Are long-term care insurance premiums deductible as a medical expense?

A

Yes

Qualified long-term care insurance premiums are deductible as medical expenses, but only up to annual limits based on the taxpayer’s age at the end of the year. These amounts are adjusted annually and are subject to the 7.5% AGI threshold.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

True or False:

Medical expenses reimbursed out of a health savings account (HSA) are deductible.

A

False

Contributions to HSAs may be deducted as an adjustment to gross income, and withdrawals from an HSA are tax-free if used for qualifying medical costs.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the deductibility limit for long-term care premiums based on age in 2025?

A
  • 40 or less: $480
  • More than 40 but not more than 50: $900
  • More than 50 but not more than 60: $1,800
  • More than 60 but not more than 70: $4,810
  • More than 70: $6,020
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Under what condition is the entire cost of a nursing home stay deductible as a medical expense?

A

If the primary reason for being in the nursing home is medically related.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Can legal fees for the management of a guardianship estate be deducted as medical expenses?

A

No

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

When can an executor elect to treat medical expenses of a deceased taxpayer as if paid by the taxpayer?

A

Within one year after the taxpayer’s death.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

True or False:

Cosmetic surgery is deductible if it is purely for enhancement of appearance.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the deductible standard mileage rate for medical expenses in 2025?

A

21 cents per mile

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the maximum deductible amount for lodging per night for medical travel?

A

$50 per night per person, up to $100 if a person is traveling with the patient.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What types of capital improvements can be deductible as medical expenses?

A
  • Wheelchair ramps
  • Lowering of kitchen cabinets
  • Railings and support bars
  • Elevators
  • Special lift equipment
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What are deductible taxes under the SALT cap?

A
  • State, local, and foreign income taxes
  • State and local sales taxes
  • Real estate taxes (not for foreign real estate)
  • Personal property taxes
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is the temporary SALT deduction cap through 2025?

A

$40,000 ($20,000 for married taxpayers filing separately)

The SALT deduction before phasing dow once MAGI exceeds $500,000 and cannot drop below $10,000.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Can taxpayers deduct both sales/use taxes and state/local income taxes?

A

No

Taxpayers can deduct either sales/use taxes or state/local income taxes, whichever is larger.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What conditions must personal property taxes meet to be deductible?

A
  • Charged on personal property
  • Based on the value of the property
  • Charged on a yearly basis
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What is the maximum amount of qualified acquisition indebtedness for a full mortgage interest deduction in 2025?

A

$750,000

($375,000 for MFS)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
What is required for **home mortgage interest** to be **deductible**?
The loan must be **secured by the home** and used to **acquire**, **build**, or **substantially improve** the home.
26
What is the **maximum period** for which **mortgage interest** can be **deducted** on a **home under construction**?
**Up to 24 months** from when construction begins. ## Footnote The home must meet the requirements of a qualified home once it is ready to be lived in.
27
Are late fees and pre-payment penalties on a mortgage loan deductible?
Yes ## Footnote They are deductible as mortgage interest on Schedule A.
28
What is the **limit** on **deducting mortgage interest** for **personal homes**?
A taxpayer **cannot deduct mortgage interest** on **more than two** personal homes. ## Footnote Real estate taxes can potentially be deducted on more than two properties, subject to the SALT cap.
29
What are '**points**' in the context of **mortgage interest**?
**Interest charges** a borrower **pays up-front** to obtain a **loan**. ## Footnote Points may be called loan origination fees, premium charges, loan discount points, or prepaid interest.
30
Under what conditions can points be **deducted in the year paid**?
* Mortgage must be secured by the **main home** * Loan used to **buy, build, or improve** the home * Points must **not** be **excessive** or unusual * Points must **not** exceed **unborrowed** funds * Points must be a **percentage** of the loan principal * Points must be listed on the **closing disclosure**
31
How are **points** paid on a **refinance mortgage** treated?
They are generally **not fully deductible in the year paid** and must be **deducted over the life of the loan** unless used to improve a main home.
32
What is **investment interest expense**?
**Interest paid** on loans used to purchase **taxable investments**. ## Footnote Commonly associated with margin interest from brokerage accounts.
33
Can investment interest expense be deducted if it exceeds net investment income?
No ## Footnote It is limited to the net investment income earned in a given year, but unused portions can be carried over to the following year.
34
Is interest incurred from borrowing against a life insurance policy deductible as investment interest?
No
35
What is the **AGI limit** for **cash contributions** to **public charities** in 2025?
60% of adjusted gross income. ## Footnote This limit only applies to cash contributions to 501(c)(3) organizations.
36
What are the **AGI limits** for **noncash charitable contributions**?
* 50% for most noncash contributions to public charities. * 30% for appreciated capital gain property. * 20% for gifts of appreciated capital gain property to most private nonoperating foundations.
37
Can charitable contributions create a net operating loss?
No
38
What type of **expenses** related to **charitable work** are **deductible**?
* **Unreimbursed** expenses directly related to services provided. * **Transportation** expenses like bus fare, parking fees, and tolls. * **Out-of-pocket** expenses related to volunteer work.
39
What are the criteria for deducting expenses incurred while traveling to perform services for a charitable organization?
Only **unreimbursed, out-of-pocket** expenses are deductible. ## Footnote The trip must be primarily for charity. Travel expenses cannot be deducted if there's a significant element of personal pleasure, recreation or vacation.
40
# True or False: Volunteer hours can be assigned a monetary value for tax purposes and taken as a charitable deduction?
False ## Footnote Individuals can claim deductions for any out-of-pocket expenses related to volunteer work for eligible organizations.
41
What is a **Qualified Charitable Distribution**? | (QCD)
A donation of up to $108,000 for 2025 directly from a traditional IRA by donors age 70½ or older. ## Footnote The distribution is not included in taxable income, but no charitable deduction can be claimed for the amounts given via the QCD.
42
Which organizations **do not qualify** for deductible charitable contributions?
* Civic leagues, social and sports clubs, Chambers of Commerce * Political groups, candidates, or organizations * Homeowner’s associations * Direct donations to individuals * Raffle, bingo, or lottery tickets * Country clubs or similar groups * Labor unions * Blood donations (except mileage) * Contributions benefiting the taxpayer
43
What must a **donor** have to **claim a deduction** for any cash contribution?
At least a **bank record** or a **written receipt from a charity** before claiming a charitable deduction.
44
What **additional documentation** is required for **cash donations** of **$250 or more**?
A **receipt or written acknowledgment** specifying the **cash** **amount**, **date**, and whether any **goods or services** were received in return.
45
What form must be filed if a taxpayer's **total deduction** for all **noncash contributions exceeds $500**?
**Form 8283**, Noncash Charitable Contributions
46
What is required for **noncash donations over $5,000**?
A **qualified appraisal** and completion of **Form 8283, Section B**. ## Footnote The appraisal itself is not attached unless the donation includes artwork valued over $20,000 or property over $500,000.
47
What is your deduction if you claim **over $500** for a **vehicle** (car, boat, or airplane) that the **charity sells**?
The **smaller** of the **charity’s sale proceeds** or the vehicle’s **fair market value**.
48
What is the **deduction limit** for **conservation easements**?
Generally **50% of adjusted gross income**, up to 100% for qualified farmers or ranchers.
49
What is the **carryforward period** for a **conservation easement donation**?
Fifteen years
50
What is the **deduction limit** for **personal casualty** and **theft losses** under the **Tax Cuts and Jobs Act**?
Only losses derived from **federally declared disaster areas** are deductible.
51
What are the new special rules for **casualty losses** under the **Federal Disaster Tax Relief Act of 2023**?
* Losses are reduced by $500. * Loss amount can be added to the standard deduction. * Applies to major disasters declared by the President between January 1, 2020, and February 10, 2025.
52
# True or False: Nonresident aliens can claim the standard deduction on Form 1040-NR.
False ## Footnote Nonresident aliens cannot claim the standard deduction and have specific limitations on itemized deductions.
53
Which **miscellaneous itemized deductions** are still **deductible** under the **Tax Cuts and Jobs Act**?
* Amortizable premium on taxable bonds * Casualty and theft losses from "income-producing" or "investment" property * Losses from Ponzi-type investment schemes * Federal estate tax on income "in respect of a decedent" (IRD) * Gambling losses to the extent of gambling winnings * Impairment-related work expenses of persons with disabilities * Excess deductions of an estate or trust in the entity’s final tax year * Repayments of more than $3,000 under a claim of right * Unrecovered investment in an annuity
54
# Fill in the blank: The IRS deems the 'disaster year' for a casualty loss to be the year when it becomes certain that the taxpayer will not be fully \_\_\_\_\_\_\_ by their insurance company.
reimbursed
55
How are **Ponzi scheme losses** treated for tax purposes?
They are deducted as a **theft loss**, not limited to the **$3,000 annual limit** for capital losses, and can be offset against **ordinary income**.
56
# True or False: A taxpayer can claim an additional standard deduction for both age and blindness.
True
57
Can a parent deduct **medical expenses** paid for a **dependent child** claimed by the other parent?
Yes
58
What are the requirements for deducting **long-term care services** and **insurance premiums**?
Services must be necessary and provided under a plan of care by a licensed doctor.
59
What are qualified **long-term care services**?
* Necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, and personal care services * Required by a chronically ill individual * Provided under a plan of care by a licensed doctor
60
# True or False: Legal fees for authorizing treatment for mental illness are deductible as medical expenses.
True
61
Under what condition is **cosmetic surgery** deductible as a medical expense?
If it is used to correct a defect or disease.
62
# Fill in the blank: Capital improvements for medical reasons are deductible if their main purpose is to provide \_\_\_\_\_\_\_ \_\_\_\_\_\_\_.
medical care
63
What type of **real estate taxes** are not deductible on Schedule A?
Real estate taxes imposed to finance **improvements of property**, such as local assessments for streets, sidewalks, and sewer lines.
64
# True or False: Interest on personal loans is deductible as investment interest.
False ## Footnote Interest on personal loans is not deductible as investment interest, except for qualified passenger vehicle loans originated after 2024.
65
What is the maximum deduction for **qualified passenger vehicle loan interest**?
$10,000 ## Footnote The deduction applies per return for tax years 2025 through 2028 and is reduced by $200 for each $1,000 by which the taxpayer’s MAGI exceeds $100,000 ($200,000 for MFJ).
66
What is the **AGI limit** for deductible contributions to certain **nonprofit organizations**?
Either 30% or 20% of AGI. ## Footnote The 30% limit applies to private nonoperating foundations, veterans’ organizations, fraternal benefit societies, and nonprofit cemeteries. The 20% limit applies to contributions of capital gain property to organizations subject to the 30% limit.
67
How long can a taxpayer carry over **unused charitable contribution** deductions?
Five years ## Footnote Any carryover amounts that cannot be deducted within five years due to AGI limits are lost.
68
What is the **maximum deduction** for a vehicle donation if Form 1098-C is not attached?
$500 ## Footnote Form 1098-C must show the gross proceeds from the sale of the vehicle donated.
69
Under what conditions can a donor deduct the **fair market value** of a donated vehicle?
* The charity keeps the vehicle for its own use. * The charity gives the vehicle directly to a needy person.
70
For which **type of losses** does the 10% AGI limitation not apply?
Qualified Disaster Losses | (QDL) ## Footnote QDLs also reduce the loss by $500 per event instead of $100, and the loss can be added to the standard deduction.
71
What must a taxpayer do to deduct **gambling losses**?
Keep a **written record** of their losses. ## Footnote Gambling losses are deductible up to the total amount of gambling winnings.
72
What type of expenses can be deducted as **impairment-related** work expenses?
Expenses that enable a disabled person to work ## Footnote These include special equipment or attendant care services at their workplace.
73
What is a '**repayment under claim of right**'?
Repayment of income included in a **previous** year’s tax return. ## Footnote This occurs when the taxpayer thought they had an unrestricted right to the income.
74
What options does a taxpayer have if they **repay more than $3,000** under a claim of right?
* Deduct the repayment as an itemized deduction on Schedule A. * Elect to take a tax credit against their tax for the year of repayment.
75
How should **excess deductions** from an estate or trust be reported by beneficiaries?
As **adjustments** to gross income on Schedule 1 or **itemized deductions** on Schedule A.
76
What are the **allowable itemized deductions** for nonresident aliens on Form 1040-NR?
* State and local income taxes. * Qualifying charitable contributions to U.S. nonprofit organizations. * Casualty and theft losses in a presidentially declared disaster area. * Some miscellaneous itemized deductions.
77
Which deductions are nonresident aliens **restricted from claiming** on Form 1040-NR?
* Mortgage interest * Most other itemized deductions
78
Are **nonresident aliens** allowed to itemize deductions connected with U.S. trade or business?
Yes, they can claim deductions only to the extent they are connected with income related to their U.S. trade or business.
79
Is mortgage interest on a **vacant piece of land** deductible?
No ## Footnote Mortgage interest becomes deductible only if a house is constructed on the land that qualifies as a home ready to be lived in, with deductions allowed up to 24 months from the start of construction.
80
What are the deduction rules for **donating vehicles**?
If the charity **sells** the vehicle, the deduction is the **smaller of the sale proceeds** or the **fair market value** on the **donation** date.
EA - Part 1: Individuals
flashcards
Decks in class (19)
# Cards
Brainscape helps you reach your goals faster, through stronger study habits.
© 2026 Bold Learning Solutions. Terms and Conditions