LH SU5 ABOVE THE LINE DEDUCTIONS AND LOSSES

GROSS INCOME

TOTAL INCOME (EXCEPT TAX EXEMPT INCOME)

AGI - ADJUSTED GROSS INCOME

GROSS INCOME MINUS ABOVE THE LINE DEDUCTIONS

TAXABLE INCOME

AGI MINUS BELOW THE LINE DEDUCTIONS

EXAMPLES OF ABOVE THE LINE DEDUCTIONS

STUDENT LOAN INTEREST

CONTRIBUTIONS TO TRADITIONAL IRA

CONTRIBUTIONS MADE TO AN HSA

EDUCATOR EXPENSES

SELF EMPLOYMENT TAXES AND HEALTH INSURANCE

EARLY WITHDRAWAL PENALTIES ON CDS OR TIME DEPOSITS

2 TYPES OF BELOW THE LINE DEDUCTIONS

YOU CAN EITHER TAKE THE STANDARD DEDUCTION OR ITEMIZED DEDUCTIONS.

ITEMIZED DEDUCTIONS EXAMPLES

SALT (STATE AND LOCAL TAXES)

1098 (MORTGAGE INTEREST)

CHARITABLE DONATIONS

MEDICAL AND DENTAL EXPENSES THAT EXCEED PERCENT OF AGI

CERTAIN GAMBLING LOSSES (UP TO AMOUNT OF WINNINGS)

EDUCATOR EXPENSES:

1. WHAT KIND OF DEDUCTION IS IT

2. MAX AMOUNT

1. IT IS AN ABOVE THE LINE DEDUCTION

2. $300 LIMIT PER TAXPAYER

EXPLAIN THE EDUCATOR EXPENSES DEDUCTION

IT IS AN ABOVE THE LINE DEDUCTION WITH A $300 LIMIT FOR EACH TAXPAYER FOR UNREIMBURSED EXPENSES PAID OR INCURRED FOR BOOKS AND SUPPLIES USED IN THE CLASSROOM. QUALIFIED EXPENSES INCLUDE AMOUNT PAID OR INCURRED AFTER MARCH 12, 2020 FOR PPE, DISINFECTANT AND SUPPLIES USED TO PREVENT THE SPREAD OF COVID.

EXAMPLES OF EXPENSES FOR THE EDUCATOR EXPENSES

BOOKS, SUPPLIES, COMPUTER EQUIPMENT (INCLUDING RELATED SOFTWARE AND SERVICES) AND OTHER EQUIPMENT.

WHO IS AN ELIGIBLE EDUCATOR FOR THE EDUCATOR EXPENSES?

WORKED AS AN EDUCATOR FOR GRADES KINDERGARTEN THROUGH GRADE 12 FOR AT LEAST 900 HOURS DURING THE SCHOOL YEAR. INCLUDES TEACHER, INSTRUCTOR, COUNSELOR, PRINCIPAL, AIDE.

EXPLAIN HSA

TAX EXEMPT TRUST OR CUSTODIAL ACCOUNT SET UP WITH A US FINANCIAL INSTITUTION. MONEY CAN BE SAVED IN THIS ACCOUNT EXCLUSIVELY FOR MEDICAL EXPENSES. YOU MUST HAVE A HIGH DEDUCTIBLE HEALTH INSURANCE PLAN.

HSA CONTRIBUTION LIMIT FOR SELF ONLY COVERAGE BELOW 55

$4,300

HSA CONTRIBUTION LIMIT FOR SELF ONLY COVERAGE 55-64

$5,300

HSA CONTRIBUTION LIMIT FOR FAMILY COVERAGE BELOW 55

$8,550

HSA CONTRIBUTION LIMIT FOR FAMILY COVERAGE FOR 55-64

$9,550

WHO CANNOT CONTRIBUTE TO AN HSA?

TAXPAYERS 65 AND OLDER OR IF YOU’RE ENROLLED IN MEDICARE

IS THE TAXPAYER REQUIRED TO HAVE THE INSURANCE FOR THE WHOLE YEAR TO CONTRIBUTE THE FULL AMOUNT FOR AN HSA?

NO

CONTRIBUTIONS TO AN HSA FOR 2025 INCLUDE CONTRIBUTIONS MADE UNTIL

APRIL 15,2026

TO HAVE AN HSA, CAN A TAXPAYER BE CLAIMED AS A DEPENDENT ON ANOTHER RETURN?

NO

FICA EXPLANATION

FEDERAL INSURANCE CONTRIBUTION ACT

PAYROLL TAX TAKEN FROM EMPLOYEES’ PAYCHECKS AND ALSO PAID BY EMPLOYERS. INCLUDES SOCIAL SECURITY TAX AND MEDICARE TAX. 50% IS PAID BY EMPLOYEE, 50% IS PAID BY EMPLOYER

A SELF EMPLOYED PERSON IS ALLOWED A DEDUCTION FOR THE ____ _____ OF THE FICA TAXES PAID TO ARRIVE AT THEIR ___

A SELF EMPLOYED PERSON IS ALLOWED A DEDUCTION FOR THE EMPLOYERS PORTION OF THE FICA TAXES PAID TO ARRIVE AT THEIR AGI

SELF EMPLOYED TAXPAYER, FICA —THE DEDUCTION FOR THE EMPLOYERS SHARE IS WITHER

50% OF SELF EMPLOYMENT TAX

OR

6.2% OF THE FIRST $176,100 OF NET SELF EMPLOYMENT INCOME PLUS 1.45% OF NET SELF EMPLOYEMENT INCOME (NO CAP ON THE 1.45%)

WHAT IS NET SELF EMPLOYMENT INCOME

SELF EMPLOYED PROFITS MULTIPLIED BY 92.35%

SELF EMPLOYED TAXPAYER, FICA — IS MEDICARE TAX DEDUCTIBLE FOR SELF EMPLOYED AGI?

THE 0.9% ADDITIONAL MEDICARE TAX IS ON THE EMPLOYEES PORTION OF FICA TAXES SO THE 0.9% IS NOT DEDUCTIBLE.

PROFIT SHARING PLAN

EMPLOYER SPONSORED PROGRAM THAT DISTRIBUTES A PORTION OF A COMPANYS PRETAX PROFITS TO ELIGIBLE EMPLOYEES

QUALIFIED RETIREMENT AND PROFIT SHARING PLANS FOR S/E

SEP OR SIMPLE PLAN

SELF EMPLOYED TAXPAYER PAYS INTO A SEP OR SIMPLE PLAN. CAN THEY DEDUCT ANYTHING?

S/E TP CAN DEDUCT SPECIFIED AMOUNTS PAID ON THEIR BEHALF TO A QUALIFIED RETIREMENT OR PROFIT SHARING PLAN

MAXIMUM ANNUAL CONTRIBUTION FOR CONTRIBUTING TO SEP QUALIFIED PLANS

LESSER OF

25% OF SELF EMPLOYED EARNINGS

OR

$70,000

SELF EMPLOYED EARNINGS

REDUCED BY THE DEDUCTIBLE PART OF SELF EMPLOYMENT TAXES

SELF EMPLOYED SEP QUALIFIED PLAN DEDUCTION — HOW TO CALCULATE DEDUCTIBLE PART OF S/E TAXES

NET EARNINGS MINUS CONTRIBUTIONS = SELF EMPLOYED EARNINGS. 20% OF SELF EMPLOYED EARNINGS IS THE MAXIMUM ANNUAL DEDUCTION

SIMPLE ACRONOYM

SAVINGS INCENTIVE MATCH PLAN FOR EMPLOYEES

S/E SIMPLE — WHAT KIND OF CONTRIBUTIONS CAN THE S/E TP MAKE?

BOTH EMPLOYER CONTRIBUTIONS AND ELECTIVE EMPLOYEE CONTRIBUTIONS

S/E SIMPLE — EMPLOYEE CONTRIBUTIONS ARE CONSIDERED

DEFERRED COMPENSATION

S/E SIMPLE — EMPLOYEE CONTRIBUTION LIMIT AGE 49 AND YOUNGER

$16,500

S/E SIMPLE — EMPLOYEE CONTRIBUTION LIMIT AGE 50-59

$16,500 + $3,500 CATCH UP

S/E SIMPLE — EMPLOYEE CONTRIBUTION LIMIT AGE 60-63

$16,500 + $5,250 CATCH UP

S/E SIMPLE — EMPLOYER CONTRIBUTION MATCH OF UP TO 4% OF S/E EARNINGS MAY BE DEDUCTED AS AN

ABOVE THE LINE DEDUCTION

S/E HEALTH INSURANCE DEDUCTION

S/E TP CAN DEDUCT 100% OF PAYMENTS FOR HEALTH INSURANCE COVERAGE FOR TP, SPOUSE OR DEPENDENTS

S/E HEALTH INSURANCE DEDUCTION - WHAT ARE THE LIMITS?

1. DEDUCTION IS LIMITED TO TP EARNED INCOME FROM THE BUSINESS FOR WHICH THE INSURANCE PLAN WAS ESTABLISHED

2. NO DEDUCTION IS ALLOWED WHEN TP IS ELIGIBLE FOR AN EMPLOYER-SPONSORED PLAN BY THEIR EMPLOYER OR AN EMPLOYER OF A SPOUSE OR DEPENDENT

PRE 2019 DIVORCE — WHAT MAKES ALIMONY A QUALIFIED PAYMENT?

1. ALIMONY IS PAID IN CASH OR EQUIVALENT

2. PAYMENT IS RECEIVED BY OR ON BEHALF OF A SPOUSE UNDER A DIVORCE OR SEPARATION AGREEMENT (PAYMENTS MADE TO A 3RD PARTY ON BEHALF OF A SPOUSE AT THE WRITTEN REQUEST OF THE PAYEE SPOUSE WILL QUALIFY AS ALIMONY) (EXAMPLES ARE MORTGAGE PAYMENTS, RENT, MEDICAL COSTS, AND EDUCATION. PAYMENTS MAY NOT BE FOR UPKEEP OF PROPERTY OWNED BY THE PAYOR SUCH AS WHEN THE PAYOR RETAINED OWNERSHIP OF THE HOUSE AND PAYS FOR MORTGAGE)

3. PAYEE SPOUSE AND PAYOR SPOUSE MUST NOT BE MEMBERS OF THE SAME HOUSEHOLD AT THE TIME OF PAYMENTS

4. PAYOR SPOUSE IS NOT LIABLE FOR ANY PAYMENTS AFTER THE DEATH OF THE PAYEE SPOUSE

5. THE SPOUSES MUST NOT FILE JOINT RETURNS WITH EACH OTHER

PRE 2019 DIVORCE (ALIMONY) — WHAT IF THE DIVORCE OR SEPARATION INSTRUMENT STATES THAT THE TAXPAYER MUST PAY EXPENSES FOR A HOME OWNED BY THE TP AND THEIR SPOUSE OR FORMER SPOUSE

SOME OF THE PAYMENTS MAY BE ALIMONY

PRE 2019 DIVORCE (ALIMONY) — WHAT IF A TAXPAYER IS REQUIRED TO PAY ALL THE MORTGAGE PAYMENTS (PRINCIPAL+INTEREST) ON A JOINTLY OWNED HOME?

IF THE PAYMENTS OTHERWISE QUALIFY AS ALIMONY, TAXPAYER CAN DEDUCT HALF OF THE TOTAL PAYMENTS AS ALIMONY

PRE 2019 DIVORCE (ALIMONY) — IF DEDUCTIONS ARE ITEMIZED AND THE HOME IS A QUALIFIED HOME (AND THE PAYOR SPOUSE PAID THE MORTGAGE PAYMENTS QUALIFYING AS ALIMONY:)

THE TAXPAYER CAN CLAIM HALF OF THE INTEREST IN FIGURING DEDUCTIBLE INTEREST

PRE 2019 DIVORCE (ALIMONY) — IN THE SITUATION BELOW, WHAT DOES THE SPOUSE REPORT:

IF DEDUCTIONS ARE ITEMIZED AND THE HOME IS A QUALIFIED HOME (AND THE PAYOR SPOUSE PAID THE MORTGAGE PAYMENTS QUALIFYING AS ALIMONY:)

IF THE SPOUSE ITEMIZES DEDUCTIONS AND THE HOME IS A QUALIFIED HOME THEY CAN CLAIM ONE HALF OF THE INTEREST ON THE MORTGAGE IN FIGURING DEDUCTIBLE INTEREST. THE SPOUSE MUST REPORT ONE HALF OF THE PAYMENTS AS ALIMONY RECEIVED

TENANTS IN COMMON MEANING

LEGAL ARRANGEMENT WHERE 2+ PEOPLE SHARE OWNERSHIP OF PROPERTY, ALLOWING THEM TO HOLD EQUAL OR UNEQUAL SHARES

PRE 2019 DIVORCE (ALIMONY) — IF REQUIRED TO PAY ALL THE REAL ESTATE TAXES OR INSURANCE ON A HOME HELD AS TENANTS IN COMMON A TAXPAYER

CAN DEDUCT HALF OF THESE PAYMENTS AS ALIMONY:

PRE 2019 DIVORCE (ALIMONY) — IF YOU ARE THE PAYEE SPOUSE IN THIS SCENARIO:

IF PAYOR SPOUSE IS REQUIRED TO PAY ALL THE REAL ESTATE TAXES OR INSURANCE ON A HOME HELD AS TENANTS IN COMMON

THE PAYEE SPOUSE MUST REPORT HALF OF THE PAYMENTS AS ALIMONY RECEIVED. IF TP AND SPOUSE ITEMIZE DEDUCTIONS THEY CAN CLAIM ONE HALF OF THE REAL ESTATE TAXES AND NONE OF THE HOME INSURANCE

Tenancy by the entirety

100% Ownership: Each spouse owns the entire property rather than split 50/50 shares, meaning neither can sell or transfer the property without the other's consent

PRE 2019 DIVORCE (ALIMONY) —

1. IF HOME IS HELD AS TENANTS BY ENTIRETY OR JOINT TENANTS AND THE TAXPAYER PAYS MORTGAGE AND REAL ESTATE TAXES:

2. WHAT IF TAXPAYER ITEMIZES?

1. NONE OF THE PAYMENTS ARE DEDUCTIBLE AND SPOUSE DOES NOT HAVE TO INCLUDE AS ALIMONY.

2. ONLY THE REAL ESTATE TAXES AND NONE OF THE HOME INSURANCE

IF ANY AMOUNT OF ALIMONY IS TO BE REDUCED IN THE FUTURE BASED ON A CONTINGENCY OF A CHILD EX. AGE OR GRADUATION, THE AMOUNT

OF THE SPECIFIED REDUCTION IS TREATED AS CHILD SUPPORT. THE ALIMONY VS CHILD SUPPORT AMOUNT MATTER FOR DIVORCED PRE 2019 BECAUSE YOU CAN DEDUCT AND CLAIM ALIMONY PORTION

PRE 2019 DIVORCE — IF THE DIVORCE OR SEPARATION INSTRUMENT SPECIFIES PAYMENTS OF BOTH ALIMONY AND CHILD SUPPORT, AND ONLY PARTIAL PAYMENTS ARE MADE

THEN THE PARTIAL PAYMENTS ARE CONSIDERED TO BE CHILD SUPPORT UNTIL OBLIGATION IS FULLY PAID. EXCESS IS TREATED AS ALIMONY

IRA CONTRIBUTIONS — IF AN INDIVIDUAL IS NOT AN ACTIVE PARTICIPANT IN AN EMPLOYER MAINTAINED RETIREMENT PLAN THEY MAY MAKE CONTRIBUTIONS TO AN IRA. ARE THE CONTRIBUTIONS DEDUCTIBLE?

YES

IRA CONTRIBUTIONS — WHAT IS THE LIMIT ON CONTRIBUTIONS?

LESSER OF $7K (8K FOR TAXPAYERS AGE 50+) OR 100% OF THEIR INCLUDIBLE COMPENSATION

IRA CONTRIBUTIONS — WHEN DO CONTRIBUTIONS ACCOUNT FOR THE TAX YEAR?

CONTRIBUTIONS MUST BE MADE BY THE DUE DATE OF RETURN, WITHOUT REGARD TO EXTENSIONS

IRA CONTRIBUTIONS — WHAT IS THE INCLUDIBLE COMPENSATION?

EARNED INCOME BUT NOT PENSIONS, ANNUITIES OR OTHER DEFERRED COMPENSATION DISTRIBUTIONS

IRA CONTRIBUTIONS — WHEN MAY AN ADDITIONAL $7K CONTRIBUTION BE GIVEN?

FOR THE TAXPAYERS NON WORKING SPOUSE’S IRA IF A JOINT RETURN IS FILED. COMBINED CONTRIBUTIONS MAY NOT EXCEED THEIR COMBINED COMPENSATION FOR THE YEAR

WHAT CONTRIBUTIONS ARE DEDUCTIBLE? TRADITIONAL IRA VS ROTH IRA

TRADITIONAL - MAY BE DEDUCTIBLE

ROTH - NOT DEDUCTIBLE SINCE YOU CONTRIBUTE AFTER TAX MONEY THEN POTENTIALLY GET TAX FREE QUALIFIED WITHDRAWALS LATER

THRESHOLD FOR SINGLE/HOH ACTIVE PARTICIPANT IN AN EMPLOYER SPONSORED RETIREMENT PLAN AND HAS MODIFIED AGI OVER THE APPLICABLE THRESHOLD HAS THE MAXIMUM $7K DEDUCTION PROPORTIONATELY REDUCED OVER A PHASEOUT RANGE

$79,000 OR LESS = FULL DEDUCTION

MORE THAN $79,000 BUT LESS THAN $89,000 = PARTIAL DEDUCTION

$89,000 OR MORE = NO DEDUCTION

THRESHOLD FOR MFJ/QSS ACTIVE PARTICIPANT IN AN EMPLOYER SPONSORED RETIREMENT PLAN AND HAS MODIFIED AGI OVER THE APPLICABLE THRESHOLD HAS THE MAXIMUM $7K DEDUCTION PROPORTIONATELY REDUCED OVER A PHASEOUT RANGE

$126K OR LESS = FULL DEDUCTION

MORE THAN $126K BUT LESS THAN $146K = PARTIAL DEDUCTION

$146K OR MORE = NO DEDUCTION

THRESHOLD FOR MFS ACTIVE PARTICIPANT IN AN EMPLOYER SPONSORED RETIREMENT PLAN AND HAS MODIFIED AGI OVER THE APPLICABLE THRESHOLD HAS THE MAXIMUM $7K DEDUCTION PROPORTIONATELY REDUCED OVER A PHASEOUT RANGE

MORE THAN $0 BUT LESS THAN $10K = PARTIAL DEDUCTION

10K OR MORE = NO DEDUCTION

THRESHOLD FOR SINGLE/HOH/QSS INDIVIDUALS NOT COVERED BY A RETIREMENT PLAN AT WORK AND HAS MODIFIED AGI OVER THE APPLICABLE THRESHOLD HAS THE MAXIMUM $7K DEDUCTION PROPORTIONATELY REDUCED OVER A PHASEOUT RANGE

NO THRESHOLD, CAN ALWAYS TAKE FULL DEDUCTION

THRESHOLD FOR MFS, MFJ WITH A SPOUSE WHO IS NOT COVERED BY A PLAN AT WORK AND HAS MODIFIED AGI OVER THE APPLICABLE THRESHOLD HAS THE MAXIMUM $7K DEDUCTION PROPORTIONATELY REDUCED OVER A PHASEOUT RANGE

NO THRESHOLD, CAN ALWAYS TAKE FULL DEDUCTION

THRESHOLD FOR MFJ WITH A SPOUSE WHO IS COVERED BY A PLAN AT WORK AND HAS MODIFIED AGI OVER THE APPLICABLE THRESHOLD HAS THE MAXIMUM $7K DEDUCTION PROPORTIONATELY REDUCED OVER A PHASEOUT RANGE

$236K OR LESS = FULL DEDUCTION

MORE THAN $236K BUT LESS THAN $246K = PARTIAL

$246K+ = NO DEDUCTION

THRESHOLD FOR MFS WITH A SPOUSE WHO IS COVERED BY A PLAN AT WORK AND HAS MODIFIED AGI OVER THE APPLICABLE THRESHOLD HAS THE MAXIMUM $7K DEDUCTION PROPORTIONATELY REDUCED OVER A PHASEOUT RANGE

LESS THAN 10K = PARTIAL DEDUCTION

10K OR MORE = NO DEDUCTION

IF AN INDIVIDUAL HAS REACHED AGE ____ BEFORE THE END OF TAX YEAR THE CONTRIBUTION LIMIT FOR AN IRA IS INCREASED BY ?

AGE 50, $1K INCREASED CONTRIBUTION LIMIT

EXCESSIVE IRA CONTRIBUTIONS OVER THE LIMIT MAY BE SUBJECT TO

6% EXCISE TAX

DISTRIBUTION OF EXCESS CONTRIBUTION FOR AN IRA IS REPORTED

ON FORM 1099-R, IN BOX 2A AND CODED IN BOX 7

WHEN IS A RMD REQUIRED FOR TRADITIONAL IRA?

BY APRIL 1 OF THE YEAR AFTER THEY REACH AGE 73. OR THE CALENDAR YEAR IN WHICH THE EMPLOYEE RETIRED, IF LATER, FOR ACTIVE PARTICIPANTS IN AN EMPLOYER SPONSORED PLAN. THEN RMD ARE REQ AT DECEMBER 31

10% PENALTY ON IRA DISTRIBUTIONS

IRA DISTRIBUTIONS MADE BEFORE AGE 59 ½ FOR A REASON OTHER THAN DEATH OR DISABILITY ARE SUBJECT TO TAXATION IN ADDITION TO THE 10% PENALTY TAX

EXCEPTIONS FOR THE 10% PENALTY

1. DISTRIBUTIONS FOR PAYMENT OF MEDICAL EXPENSES IN EXCESS OF 7.5% OF AGI

2. QUALIFIED FIRST TIME HOMEBUYER EXPENSES UP TO 10K

3. QUALIFIED HIGHER EDUCATION EXP FOR INDVIDUAL OR THEIR LINEAL RELATIVES

4. QUALIFIED FIRST YEAR BITH OR ADOPTION EXPENSES UP TO 5K

CONTRIBUTIONS TO ROTH IRAs ARE DEDUCTIBLE OR NONDEDUCTIBLE

NONDEDUCTIBLE SINCE YOU CONTRIBUTE AFTER TAX DOLLARS AND THE EARNINGS ARE TAX FREE

ROTH IRA CONTRIBUTION LIMIT

SAME AMOUNT FOR A DEDUCTIBLE TRAD IRA, TOTAL CONTRIBUTION TO BOTH DEDUCTIBLE AND NON DEDUCTIBLE IRA IS 7K PER TP OR 8K IF 50 OR OLDER

MAX DEDUCTION FOR INTEREST PAID ON QUALIFIED EDUCATIONAL LOANS

$2,500

MAGI PHASEOUT RANGE FOR DEDUCTING STUDENT LOAN INTEREST

MFJ IS 170K-200K

OTHERS IS 85K-100K

HOW TO CALCULATE STUDENT LOAN INTEREST DEDUCTION FOR A SINGLE FILER

MAGI MINUS 85K. DIVIDE THAT BY 15K AND THEN MULTIPLY THAT BY 2500. WHATEVER THAT AMOUNT IS : STUDENT LOAN INTEREST PAID MINUS THE AMOUNT FROM BEFORE WHICH IS THE AMOUNT OF REDUCTION IF ITS IN THE PHASEOUT RANGE

PERFORMING ARTIST EXPENSES WHAT KIND OF DEDUCTION IS IT

ABOVE THE LINE

PERFORMING ARTIST EXPENSES: REQ FOR PERFORMING ARTISTS TO QUALIFY TO DEDUCT EMPLOYEE BIZ EXP AS AN ADJUSTMENT TO GROSS INCOME

1. SERVICES WERE PERFORMED AS AN EMPLOYEE FOR AT LEAST 2 EMPLOYERS

2. AT LEAST $200 WAS RECEIVED FROM EACH OF ANY 2 EMPLOYERS

3. RELATED EXP ARE MORE THAN 10% OF TOTAL GROSS INCOME FROM THE SERVICES

4. AGI IS NOT MORE THAN $16K BEFORE DEDUCTING THESE EXP

PENALTY ON EARLY WITHDRAWAL OF SAVINGS

DEDUCTION IS ALLOWABLE FOR AN EARLY WITHDRAWAL OF FUNDS FROM CD’S OR OTHER TIME SAVINGS ACC. DEDUCTION IS TAKEN IN YEAR PENALTY IS INCURRED

ARCHER MSA MEANING

ARCHER MEDICAL SAVINGS ACCOUNT

WHAT DOES AN ARCHER MSA DO

ALLOW S/E TP OR EMPLOYED BY SMALL EMPLOYER AND WHO ARE COVERED BY A HIGH DEDUCTIBLE HEALTH INSURANCE PLAN TO MAKE TAX DEDUCTIBLE CONTRIBUTIONS TO AN ARCHER MSA AND USE THOSE FUNDS ACCUMULATED TO PAY MEDICAL EXPENSES

ARCHER MSA DEDUCTION

NOT INCLUDED WITH OTHER MEDICAL EXPENSES AND IS NOT SUBJECT TO 7.5% LIMITATION

ARCHER MSA: EARNING GENERATED BY THE PLAN AND DISTRIBUTIONS MADE TO PAY MEDICAL EXPENSES ARE

NONTAXABLE

ARCHER MSA: DISTRBIBUTIONS NOT USED FOR MEDICAL EXPENSES ARE

TAXABLE AND SUBJECT TO A 20% PENALTY TAX UNLESS MADE AFTER AGE 65, UPON DEATH OR DISABILITY

ARCHER MSA: CONTRIBUTION LIMIT

ANNUAL LIMITATION WHICH IS A PERCENTAGE OF THE DEDUCTIBLE OF THE REQUIRED HIGH DEDUCTIBLE HEALTH PLAN

ARCHER MSA: PROGRAM IS LIMITED TO

750K PEOPLE

ARCHER MSA: WHAT CAN IT BE ROLLED INTO?

AN HSA, TAX FREE

JURY DUTY PAY RETURNED TO AN EMPLOYER IS

DEDUCTIBLE BY THE EMPLOYEE FROM GROSS INCOME

MOVING EXPENSES FROM NONBUSINESS RENTAL OF PERSONAL PROPERTY

NOT DEDUCTIBLE

TAXPAYERS DEDUCTIBLE LOSS IS LIMITED TO THE SMALLEST AMOUNT OF THE FOLLOWING LIMITATIONS:

1. AMOUNT OF THE TAXPAYERS BASIS IN ACTIVITY

2. BY THE AT RISK RULES

3. BY THE PASSIVE ACTIVITY RULES

LOSSES ON SALES OF PROPERTY HELD FOR PERSONAL USE

NOT DEDUCTIBLE

AT-RISK RULES: AMOUNT OF A LOSS ALLOWABLE AS A DEDUCTION IS LIMITED TO

THE AMOUNT A PERSON HAS AT RISK IN THE ACTIVITY FROM WHICH THE LOSS AROSE

AT-RISK RULES: A LOSS IS ANY

EXCESS OF DEDUCTIONS OVER GROSS INCOME ATTRIBUTABLE TO THE SAME ACTIVITY

AT-RISK RULES: RULES APPLY TO

EVERY ENTITY AND TAXPAYER AND CLOSELY HELD C CORPS. RULES APPLIED SEPARATELY TO EACH TRADE OR BIZ OR INCOME PRODUCING ACTIVITY

AT-RISK RULES: PERSONS AMOUNT AT RISK IN AN ACTIVITY IS DETERMINED AT THE

CLOSE OF THE TAX YEAR

AT-RISK RULES: PERSONS INITIAL AT RISK AMOUNT INCLUDE

MONEY CONTRIBUTED, THE ADJUSTED BASIS OF PROPERTY CONTRIBUTED, AND BORROWED AMOUNTS

AT-RISK RULES: RECOURSE DEBT REQUIREMENTS INCLUDE

1. PERSONS AT RISK AMOUNT INCLUDES AMOUNT BORROWED ONLY TO THE EXTENT OF THE DEBT, THE PERSON HAS EITHER PERSONAL LIABILITY OR PROPERTY PLEDGED AS SECURITY (NO MORE THAN THE FMV WHEN PLEDGED MINUS PRIOR OR SUPERIOR CLAIMS IS INCLUDED.)

AT-RISK RULES: AT RISK AMOUNT DOES NOT INCLUDE RECOURSE DEBT IF ONE OF THE FOLLOWING APPLIES:

1. PROPERTY PLEDGED AS SECURITY IS USED IN THE ACTIVITY

2. INSURANCE, GURANTEES, STOP LOSS AGREEMENTS, OR SIMILAR ARRANGEMENTS PROVIDE PROTECTION FROM PERSONAL LIABILITY

3. A PERSON WITH AN INTEREST IN THE ACTIVITY OR ONE RELATED THEM EXTENDED THE CREDIT

AT-RISK RULES DEFINITON

IRC THAT LIMIT AMOUNT OF BIZ OR INVESTMENT LOSSES A TP CAN DEDUCT ON THEIR RETURN

NONRECOURSE DEBT IS GENERALLY EXCLUDED FROM

THE AMOUNT AT RISK

THE AMOUNT AT RISK IN THE ACTIVITY OF HOLDING REAL PROPERTY INCLUDES

QUALIFIED NONRECOURSE FINANCING (QNRF)