BUS FPX 4065 Assessment 4 Itemized Deduction Schedule A
Phillip March 9, 2024 No Comments

BUS FPX 4065 Assessment 4 Itemized Deduction Schedule A

BUS FPX 4065 Assessment 4 Itemized Deduction Schedule A

Name

Capella university

BUS-FPX4065 Income Tax Concepts and Strategies

Prof. Name

Date

Schedule A Form: A Guide to Itemized Deductions

A taxpayer employs a Schedule A form to determine whether they qualify for itemized deductions or standard deductions. The insights gleaned from the Schedule A aid in reducing the total tax obligations for the given year.

Health-Related Expenses (Medical/Dental)

Following the onset of COVID-19, the IRS permits deductions for the cost of PPE (personal protection equipment) if purchased through health plans, health flexible spending accounts, Archer medical savings accounts, or health reimbursement accounts. Mr. and Mrs. Weaver can deduct health and dental insurance payments from their 2021 wages and claim deductibles/co-payments exceeding 7.5% of their total AGI. Additionally, expenses such as laboratory services, medical testing, nursing care, and other medical services qualify for deductions. Items like weight-loss programs for specific diseases, smoking cessation programs, Medicare insurance, and medical devices can also be claimed. However, exclusions apply, including injuries from accidents, life insurance, non-FDA approved drugs, and cosmetic surgery unless related to a deformity.

State and Local Deductions

A section of the Schedule A form accounts for state and local taxes paid. The Weavers paid $12,230 in property tax, exceeding the $10,000 claimable amount. They can enter $10,000 on line 7 for total taxes paid. Charitable donations could substitute for state and local taxes but must be directly related.

BUS FPX 4065 Assessment 4 Itemized Deduction Schedule A

Paid Interest

The Weavers paid $12,246 in mortgage interest, eligible for inclusion on line 8a of Schedule A. However, expenses for home improvements financed by the mortgage cannot be included in mortgage interest calculations.

Gifts to Charity

Verification is needed for the Weavers’ $4,500 in charitable donations. Written acknowledgement from the charity stating the amount and purpose of the donation is required. Donations can include clothing, equipment, vehicles, church tithe, and cash. Non-cash donations require completion of Form 8283.

Total Itemized Deductions

The Weaver’s total itemized deductions amount to $26,746, surpassing the standard deduction limit of $25,000. Therefore, they would enter $26,746 on line 12a of their 1040 form.

References

IRS.gov (N.D.). Publication 526. Charitable contributions 2021 returns. Retrieved from https://www.irs.gov/pub/irs-pdf/p526.pdf

IRS.gov (N.D.). Publication 936. Home mortgage interest deductions. Retrieved from https://www.irs.gov/pub/irs-pdf/p936.pdf

IRS.gov (N.D.). 2021 Instructions for Schedule A, itemized deductions. Retrieved from https://www.irs.gov/pub/irs-pdf/i1040sca.pdf

IRS.gov (N.D.). Schedule A, itemized deductions. Retrieved from https://www.irs.gov/pub/irspdf/f1040sa.pdf

BUS FPX 4065 Assessment 4 Itemized Deduction Schedule A