Deductions & Credits

$15,750

$31,500

deduction reduces taxable income benefit of deduction = deduction amount × marginal rate credit reduces tax liability credit benefit is dollar for dollar

$200,000

$400,000

$7,000 $8,000 age 50 or older

$150,000 full phaseout at $165,000

Traditional IRA — contributions may be deductible, withdrawals are taxed as ordinary income Roth IRA — contributions are not deductible, qualified withdrawals are tax-free

$2,500 per eligible student 40% refundable

$80,000 $90,000

$750,000 $375,000 for MFS

Educator expenses ($300) HSA contributions 50% of self-employment tax Self-employed retirement plan contributions (SEP, SIMPLE) Student loan interest (up to $2,500)

Death or disability Substantially equal periodic payments (72t) IRS levy Qualified medical expenses over 7.5% AGI Qualified higher education expenses First-time home purchase (up to $10,000) Birth or adoption (up to $5,000)

$8,046

The converted amount is included in gross income as ordinary income. Nondeductible contributions are tax-free on conversion. The 10% early withdrawal penalty does NOT apply to conversions.

$2,500

$2,000

$80,000 $90,000 Single $160,000 $180,000 MFJ

$2,000 per return 20% $10,000 qualified expenses nonrefundable

92.35% — multiply net SE income by 92.35% before applying the 15.3% SE tax rate (accounts for employer-equivalent portion)

50% of SE tax (employer-equivalent portion). The 0.9% additional Medicare tax is NOT deductible.

Simplified method — $5 per square foot up to 300 sq ft ($1,500 maximum) Regular method — allocate actual expenses based on percentage of home used exclusively for business

SEP-IRA: 25% of net earnings, up to $70,000 SIMPLE IRA: employee $16,500 + catch-up $3,500 Solo 401(k): employee deferral $23,500 + profit-sharing up to $70,000 total

$5,000 immediate deduction (phaseout $5K–$55K), remainder amortized over 180 months

Unreimbursed medical expenses exceeding 7.5% of AGI

Interest on up to $750,000 of acquisition debt ($375,000 MFS). Loan must be secured by main home or one second home. Home equity debt only deductible if used to buy, build, or substantially improve the home.

Only federally declared disaster losses deductible. $100 per casualty floor + 10% of AGI. Qualified Disaster Losses: $500 per event, no 10% AGI floor, may be added to standard deduction.

NRAs cannot take standard deduction. Limited Schedule A: state/local income taxes, US charitable contributions, casualty losses in presidentially declared disasters. Cannot deduct mortgage interest or medical.

Age 40 or under: $480 41-50: $900 51-60: $1,800 61-70: $4,810 71+: $6,020 Deductible as medical expense (subject to 7.5% AGI floor)

State and local tax deduction — ADD BACK (disallowed for AMT) Standard deduction — ADD BACK (disallowed for AMT)

Charitable contributions — fully allowed Mortgage interest (acquisition debt) — fully allowed

Prior-year AMT generates a credit carried forward indefinitely to offset regular tax in future years when regular tax exceeds tentative minimum tax. No carryback.

1. Pay 90% of current year tax 2. Pay 100% of prior year tax (110% if AGI >$150K / $75K MFS) 3. Owe less than $1,000 after withholding/credits 4. Had $0 tax liability in prior year

24% flat rate (30% for NRAs). Triggered when taxpayer fails to provide valid TIN, IRS notifies of incorrect TIN or prior underreporting, or taxpayer fails to certify not subject to backup withholding. Not a penalty — credited against tax.

Adjusted Basis = Original Cost + Improvements − Accumulated Depreciation − Prior §179 Deductions − Casualty/Theft Losses Already Deducted

Rented <15 days: rental income NOT taxable, no deductions (except mortgage interest/property tax on Schedule A). Rented ≥15 days + personal use >14 days or >10% rental days: classified as residence, deduct expenses only up to rental income. Rented ≥15 days + personal use ≤14 days or ≤10%: treated as rental property.

NOL deduction cannot exceed 80% of taxable income computed before the NOL deduction and before the §199A QBI deduction. Carryforward is indefinite. No carryback (except farming).

COD is recognized when it becomes clear the debt will never be repaid — typically the earliest of: 1099-C issuance date, debt forgiveness agreement date, or expiration of statute of limitations on collection.

COD excluded if discharge occurs in a Title 11 bankruptcy case and is granted by the court. No dollar limit, no residence basis reduction. But tax attributes (NOLs, capital losses, credits, asset basis) are reduced per §108(b).

No — portion allocable to tax-exempt compensatory damages is nondeductible under §265. Portion allocable to taxable punitive damages is NOT deductible for individuals 2018–2025 (miscellaneous itemized deductions suspended under §67(g)).

If you deducted medical expenses in a prior year and later receive a lawsuit settlement reimbursing those same expenses, the previously-deducted amount must be REPORTED AS INCOME. You cannot double-dip on the tax benefit.

Payments for caring for a disabled person living in the SAME household are EXCLUDED from income. If provider does NOT live with disabled person, payments are TAXABLE. Taxpayer may ELECT to include payments in income to qualify for EITC or ACTC.

A state/local tax refund is taxable ONLY if the taxpayer itemized deductions in the prior year AND received a tax benefit. If the taxpayer took the standard deduction, the refund is NOT taxable. Federal refunds are never taxable.

One-time $1,000 government contribution for each eligible US-citizen child born 2025-2028. Nongovernmental contributions: up to $5,000/year in aggregate, including up to $2,500 from an employer. Contributions cannot begin before July 4, 2026. Withdrawals are generally restricted until the year the beneficiary turns 18; afterward the account generally follows traditional IRA rules.

529 plans allow up to $10,000 per year per beneficiary for K-12 tuition. 529-to-Roth IRA rollover: up to $35,000 lifetime if the 529 has been open ≥15 years and contributions/earnings from the prior 5 years are not eligible. Rollover counts toward the annual Roth IRA contribution limit.

No. Tax preparation fees are NOT deductible as a miscellaneous itemized deduction for individuals for tax years 2018-2025. OBBBA permanently eliminates the 2%-of-AGI miscellaneous itemized deductions after 2025. Business tax preparation fees remain deductible on Schedule C (self-employed).

$750,000 ($375,000 MFS). The QPRI exclusion expires for discharges after December 31, 2025.

QPRI takes precedence by default per §108(a)(2)(C). The taxpayer must affirmatively ELECT on the return to use insolvency instead — and would almost never do so, since insolvency burns NOLs and credits while QPRI only reduces home basis.

NO loss deduction is allowed. The previously taxed compensation income is permanently lost. Only a capital loss for the amount actually PAID for the stock (not the previously recognized income) may be available.

NSOs are taxable at EXERCISE (not grant or vesting). Compensation income = FMV at exercise minus the strike price. The employer gets a deduction equal to the employee's compensation income.

180 days after leaving the combat zone (or last day of hospitalization for combat injuries). Extends to military members, Red Cross personnel, accredited journalists, civilian contractors, AND their spouses.

FUTA rate is 6% on the first $7,000 of wages (offset by state credits up to 5.4%, making the net rate as low as 0.6%). The FUTA trigger is $1,000+ paid to any household employee in any calendar quarter.

Yes. Taxpayers can ELECT to treat excluded combat pay as earned income for EITC, Child Tax Credit, and IRA contribution eligibility. This is an optional election made per return, per year.

Form W-7A. ATIN is valid for 2 years (extension via Form 15100). Cannot be used to claim EITC, CTC, or AOTC.

No. Cannot use both AOTC and §529 tax-free treatment for the same expenses. Strategy: use 529 for room/board or excess costs, and use AOTC for $4,000 of tuition to maximize both benefits.

Reckless/intentional disregard: 2-year ban. Fraud: 10-year ban. After the disallowance period, the taxpayer must file Form 8862 to reclaim the credit.

$2,500,000 maximum deduction, phaseout begins at $4,000,000 of qualified property placed in service, fully eliminated at $6,500,000.

$34,700. Base $31,500 + $1,600 (spouse 1, 65+) + $1,600 (spouse 2, 65+) = $34,700 for MFJ both 65+.

$5. Yes, FIVE dollars. The MFS filer must take $0 standard deduction — but technically the MFS base is $5 in this situation. (If the spouse does NOT itemize, MFS gets $15,750.)

$7,000 base contribution limit for both Traditional and Roth IRAs. Catch-up (age 50+): $1,000 additional, for a total of $8,000.

RMDs begin at age 73 (for those born 1951-1959; age 75 for those born after 1959). The penalty is 25% of the amount not distributed (reduced to 10% if corrected within 2 years).

$108,000 from a traditional or Roth IRA directly to a qualified charity, for taxpayers age 70.5 or older. QCD counts toward RMD, is excluded from income, and is NOT deductible as a charitable contribution.

The investment income limit is $11,950 for 2025. If a taxpayer's investment income exceeds this amount, they are completely INELIGIBLE for EITC — even if their earned income otherwise qualifies.

Maximum $2,500 per student per year (100% of first $2,000 + 25% of next $2,000). 40% is refundable (up to $1,000). Phaseout: MAGI $80,000-$90,000 (single) / $160,000-$180,000 (MFJ). MFS cannot claim. Available for first 4 years of higher education only.

Taxpayer may elect on Form 982 to reduce basis of depreciable property FIRST (before NOLs, credits, capital losses). This preserves NOLs for future ordinary income offset, which is often more valuable than future depreciation deductions.

$750,000 ($375,000 MFS). The QPRI exclusion expires for discharges after December 31, 2025. After that date, COD becomes fully taxable unless another §108 exclusion applies.

QPRI takes precedence by default. The taxpayer must affirmatively ELECT on Form 982 to use insolvency instead — and would almost never do so, since insolvency burns NOLs and credits while QPRI only reduces home basis.

NO loss deduction is allowed. The previously taxed compensation income is permanently lost. The only allowable loss is a capital loss for the amount actually PAID for the stock — not the previously recognized income.

NSOs are taxable at EXERCISE (not grant, not vesting). Compensation income = FMV at exercise minus strike price. The employer gets a deduction equal to the employee's compensation. Holding period for capital gains starts at exercise.

The ISO gets NSO treatment: the bargain element at exercise (FMV minus strike) becomes ordinary compensation income. The employer then gets a deduction (no deduction for qualifying ISO dispositions).

180 days after leaving the combat zone (or last day of hospitalization for combat injuries). Applies to military members, Red Cross personnel, accredited journalists, civilian contractors serving in a combat zone, AND their spouses.

FUTA rate is 6% on the first $7,000 of wages (offset by state credits up to 5.4%). FUTA is triggered if the employer pays any household employee $1,000 or more in any calendar quarter.

CTC/ACTC and EITC require a valid SSN. Senior (65+) deduction and tips/overtime deductions also require SSN. ODC accepts any TIN (SSN/ITIN/ATIN). AOTC currently accepts ITIN. ITIN holders are excluded from CTC, EITC, and these Schedule 1-A deductions.

No carryback (except farming losses), indefinite carryforward (never expires), and usage limited to 80% of taxable income computed AFTER subtracting the §199A QBI deduction but BEFORE the NOL deduction.

Yes. Taxpayers can ELECT to treat excluded combat pay as earned income for EITC, Child Tax Credit, and IRA contribution eligibility. This is an optional election made per return, per year.

ATIN = Adoption Taxpayer Identification Number for a child pending adoption. Applied via Form W-7A. Valid for 2 years (extension via Form 15100). Cannot claim EITC, CTC, or AOTC with an ATIN. ODC can be claimed with any valid TIN.

No. Cannot double-dip. Use 529 for room/board or excess costs, and AOTC for $4,000 of tuition. You cannot use tax-free 529 AND AOTC on the same qualifying expenses — must coordinate.

Reckless/intentional disregard: 2-year ban. Fraud: 10-year ban. After the disallowance period expires, the taxpayer must file Form 8862 (Due Diligence Checklist) to reclaim EITC.

Maximum §179 deduction: $2,500,000. Phaseout begins when total §179 property placed in service exceeds $4,000,000. Fully eliminated at $6,500,000.

$34,700. Base MFJ: $31,500 + $1,600 (spouse 1, 65+) + $1,600 (spouse 2, 65+) = $34,700. The additional amount for 65+ or blind is $1,600 per spouse for MFJ/MFS; $2,000 for Single/HoH.

$5 (effectively $0). If the spouse itemizes, the MFS filer cannot take the standard deduction. Technically the base is $5, but the practical result is $0 standard deduction. If the spouse does NOT itemize, MFS gets full $15,750.

RMDs begin at age 73 (for those born 1951-1959; age 75 for those born after 1959). The penalty is 25% of the amount not distributed, reduced to 10% if corrected within 2 years. Roth IRAs have NO RMDs during the owner's lifetime.

$11,950 in 2025. If a taxpayer's investment income exceeds this amount, they are COMPLETELY ineligible for EITC — even if earned income and AGI otherwise qualify. Investment income includes taxable interest, dividends, capital gains, royalties, and passive activity income.

Maximum $2,500 per student per year: 100% of first $2,000 of qualified expenses + 25% of next $2,000. 40% is refundable (up to $1,000). Phaseout: MAGI $80,000-$90,000 single / $160,000-$180,000 MFJ. Available only for first 4 years of postsecondary education. MFS cannot claim.

qualified tips → up to $25,000 per return qualified overtime → up to $12,500 qualified overtime → up to $25,000 on a joint return married taxpayers must file jointly recipient must have a valid SSN

phaseout begins at MAGI of $150,000 phaseout begins at MAGI of $300,000 for MFJ reduce deduction by $100 for each full $1,000 over the threshold fractional $1,000 amounts are rounded down

maximum deduction = $10,000 phaseout begins at MAGI of $100,000 phaseout begins at MAGI of $200,000 for MFJ reduce deduction by $200 for each $1,000 or fraction over the threshold report the vehicle identification number

$6,000 for each eligible taxpayer age 65 or older maximum $12,000 if both joint filers qualify phaseout begins at MAGI of $75,000 phaseout begins at MAGI of $150,000 for MFJ reduce deduction by 6% of MAGI above the threshold

when claiming the Premium Tax Credit when APTC was paid for the taxpayer or another member of the tax family attach Form 8962 even if the taxpayer otherwise has no filing requirement use Form 1095-A to complete the reconciliation

APTC greater than allowed PTC → excess APTC must be repaid repayment may be limited for 2025 APTC less than allowed PTC → taxpayer claims the difference as additional credit Form 8962 performs the reconciliation