Qualifying Widow(er)
• Provide >50% cost of maintaining house
• Dependent child lives with for entire year
• May file as widower for 2 years after death of spouse
• Allows for only 1 personal exemption (can’t claim dead
person)
AMT Credit = can offset regular tax liability in future years (but
not offset AMT)
IRA Rules
– $5K per spouse allowed, can deduct for AGI
– If AGI exceeds a threshold (~100K) and covered by employee
pension plan, then no deduction is allowed
– $6K limit if 50 or older
– Limited to compensation received (includes alimony!)
Deductions
• Roth IRA = NOT Deductible
• Penalties on late payment = NOT Deductible
• Health Insurance Premiums paid = Itemize (7.5% AGI floor)
• Life Insurance Premiums = NOT Deductible
• Vehicle Repairs, insurance, gasoline, maintenance = Line
9 of Schedule C- “Car and Truck Expenses”
○ (Depreciate car with other biz equipment and lump
together w/Section 179 expense)
• M&E: 50% deductible on Schedule C
• Professional Journals used for biz = FULLY deductible on
Schedule C
• Ad Volerem/Property Taxes = fully deductible as Itemized
deduct
• Home Equity Interest = fully deductible as Itemized deduct
○ Limit = $100K indebtedness (secured by principal home)
○ Limited to FMV of residence reduced by acquisition
indebtedness related to that residence
• Homeowner’s Insurance = NOT deductible
• Qualifying contributions to simplified EE pension plan =
Fully deductible ‘for’ AGI
• Real Property tax = Fully deductible as itemized (even if
not principal residence)
• Estate Tax attributable to income of decedent = Itemize
(2% AGI)
• Loss on sale of residence = NOT deductible (considered
personal loss)
Taxpayer withholds, but owes no tax & doesn’t file = must file for
refund w/in 2 years from date TAX WAS PAID
AMT
• Medical expenses: >10% AGI
• No exemptions allowed? May be different