Deductions & Credits
Part 1 · 44 study cards · Active recall format
Q1.What is the standard deduction for 2025 for Single filers?
Exam wording
$15,750
Q2.What is the standard deduction for 2025 for Married Filing Jointly?
Exam wording
$31,500
Q3.What are the 2025 Roth IRA contribution limits?
Exam wording
$7,000 $8,000 age 50 or older
Q4.What is the American Opportunity Tax Credit maximum per eligible student?
Exam wording
$2,500 per eligible student 40% refundable
Q5.What is the maximum student loan interest deduction?
Exam wording
$2,500
Q6.What is the additional standard deduction for taxpayers age 65 or older who are unmarried?
Exam wording
$2,000
Q7.What is the maximum 2025 educator-expense deduction per eligible educator?
Exam wording
$300, or up to $600 on a joint return when both spouses are eligible educators, limited to $300 each.
Q8.What portion of medical expenses may be deducted on Schedule A?
Exam wording
Only qualified medical expenses exceeding 7.5% of adjusted gross income.
Q9.What security requirement applies to deductible home mortgage interest?
Exam wording
The mortgage must be a secured debt on a qualified home in which the taxpayer has an ownership interest.
Q10.What is the maximum American Opportunity Tax Credit per eligible student?
Exam wording
Up to $2,500, with 40% potentially refundable.
Q11.May a taxpayer elect to include nontaxable combat pay as earned income for EITC purposes?
Exam wording
Yes. The election can increase or decrease the credit, so the credit should be figured both ways.
Q12.Where must health coverage be purchased to qualify for the Premium Tax Credit?
Exam wording
Through a Health Insurance Marketplace.
Q13.Which Marketplace statement supplies information needed to reconcile advance Premium Tax Credit payments?
Exam wording
Form 1095-A, Health Insurance Marketplace Statement.
Q14.Recall the rule for this EA objective in Income And Assets: Self-Employed Health Insurance
Exam wording
Schedule 1 (Form 1040), line 17
Q15.Recall the rule for this EA objective in Deductions And Credits: Nonbusiness casualty and theft losses
Exam wording
When attributable to a federally declared disaster, subject to the applicable rules
Q16.Recall the rule for this EA objective in Deductions And Credits: Itemized deductions for Form 1040-NR
Exam wording
Schedule A (Form 1040-NR)
Q17.Recall the rule for this EA objective in Deductions And Credits: Child and dependent care credit
Exam wording
The care expenses must enable the taxpayer and spouse, if applicable, to work or look for work
Q18.Recall the rule for this EA objective in Deductions And Credits: Foreign tax credit
Exam wording
As either a foreign tax credit or an itemized deduction, subject to the rules
Q19.What is the educator-expense adjustment?
Exam wording
eligible educators may deduct qualifying unreimbursed classroom expenses as an above-the-line adjustment up to the annual limit the educator must work at least 900 hours in a school year at an eligible school expenses exceeding the adjustment may be considered only under other limited rules
Q20.What are the basic requirements for the student-loan interest deduction?
Exam wording
interest paid on a qualified student loan may be deductible as an adjustment to income the taxpayer must have a legal obligation to pay the interest phaseouts based on modified AGI and filing status can reduce or eliminate the deduction a dependent generally cannot claim it
Q21.How do Health Savings Account contributions affect AGI?
Exam wording
deductible HSA contributions are an above-the-line adjustment the account beneficiary must have qualifying high-deductible health coverage and meet other eligibility rules employer contributions are generally excluded from income and count against the contribution limit
Q22.What self-employment tax deduction is generally allowed?
Exam wording
a self-employed individual may deduct the employer-equivalent portion of self-employment tax as an adjustment to income the deduction does not reduce net earnings from self-employment used to compute SE tax itself it reduces AGI for income-tax purposes
Q23.What is the standard deduction?
Exam wording
a fixed amount based on filing status that reduces taxable income without itemizing additional standard deduction amounts may apply for age 65 or older or blindness some taxpayers must itemize, including certain MFS filers when the spouse itemizes
Q24.What medical expenses are generally deductible as itemized deductions?
Exam wording
unreimbursed medical and dental expenses exceeding the applicable AGI percentage floor qualifying costs include diagnosis, cure, mitigation, treatment, or prevention of disease and qualified long-term care cosmetic procedures are generally nondeductible unless necessary to correct a deformity from disease, accident, or surgery
Q25.What is the state and local tax itemized deduction?
Exam wording
individuals may deduct state and local income taxes or general sales taxes, plus state and local real-property taxes and certain personal-property taxes the total SALT deduction is subject to the federal dollar cap for the years it applies foreign real-property taxes are not included in that SALT category
Q26.What are the basic requirements for a charitable contribution deduction?
Exam wording
the gift must be to a qualified organization the taxpayer generally needs contemporaneous written acknowledgment for contributions of $250 or more percentage-of-AGI limits apply by gift type and organization type contributions of property require special valuation and substantiation rules
Q27.What is the Child Tax Credit in general terms?
Exam wording
a credit for each qualifying child who meets age, relationship, support, residency, and TIN requirements part of the credit may be refundable as the additional child tax credit when earned-income conditions are met phaseouts reduce the credit at higher modified AGI levels
Q28.What income generally counts as earned income for the Earned Income Tax Credit?
Exam wording
wages, salaries, tips, and other employee pay net earnings from self-employment combat pay if elected nontaxable employee compensation such as certain dependent-care benefits does not count as earned income for EITC
Q29.How do the American Opportunity Credit and Lifetime Learning Credit differ?
Exam wording
AOTC is generally limited to the first four years of postsecondary education and has a partially refundable component Lifetime Learning Credit is available for a broader set of courses with no four-year limit and is nonrefundable a student generally cannot claim both credits for the same student in the same year
Q30.What is the child and dependent care credit?
Exam wording
a nonrefundable credit for employment-related care expenses for a qualifying person the taxpayer must have earned income and generally file a joint return if married expenses are limited by the care provider and earned-income rules, and the credit percentage phases down as AGI rises
Q31.Who may generally claim the premium tax credit?
Exam wording
individuals who obtain qualifying health coverage through the Marketplace household income within the applicable percentage-of-poverty range not eligible for other minimum essential coverage such as affordable employer coverage or government coverage that makes them ineligible not claimed as a dependent by another taxpayer
Q32.What is household income for premium tax credit purposes?
Exam wording
modified AGI of the taxpayer plus modified AGI of individuals in the tax family who are required to file modified AGI generally starts with AGI and adds tax-exempt interest and certain foreign-income exclusions household size and income determine the applicable contribution percentage
Q33.Why must advance premium tax credit be reconciled on Form 8962?
Exam wording
APTC is paid during the year based on estimated eligibility Form 8962 compares the allowed PTC to APTC received excess APTC generally must be repaid up to applicable caps, and unused PTC may create an additional credit
Q34.When must a taxpayer file Form 8962 to claim or reconcile the premium tax credit?
Exam wording
when the taxpayer wants to claim PTC when anyone in the tax family received APTC when Marketplace coverage was obtained and reconciliation is needed even if no net PTC remains
Q35.Deborah was a self-employed chicken farmer in 2025. She files Schedule F to report her income and loss. She incurred a self-employment tax of $4,896 on her Schedule SE. Which of the following statements is correct?
Exam wording
She can deduct 50% of the self-employment tax as an adjustment to income on Form 1040.
Q36.All of the following statements are correct about the qualified educator expense deduction except:
Exam wording
A college instructor may qualify.
Q37.An adjustment to income is considered the most beneficial type of deduction because:
Exam wording
Adjustments to income directly reduce adjusted gross income.
Q38.Which of the following taxpayers must itemize their deductions?
Exam wording
Gabriel, whose wife Melinda files a separate return and itemizes her deductions.
Q39.Which of the following home improvements cannot be deducted as a medical expense?
Exam wording
An elevator that costs $15,000 but adds $20,000 to the value of the home.
Q40.Alejandro works full time for a hospital as a laboratory technician. Because of an accounting error, the hospital over-withheld too much Social Security tax from Alejandro's wages. Alejandro only worked for the hospital and had no other employer. What should he do, in order to get the over-withheld amounts?
Exam wording
Alejandro should request that the employer adjust the excess.
Q41.Which of the following expenses is not a qualified expense for purposes of the Adoption Credit?
Exam wording
Attorney fees for a surrogate arrangement.
Q42.Adrienne and Konnor are married and file jointly. Adrienne has $133,000 of self-employment income. Konnor earned $184,000 in wages. Compute the amount of their Additional Medicare Tax, if any.
Exam wording
$603
Q43.Which of the following taxpayers would be subject to the Additional Medicare Tax?
Exam wording
Lizzie, who files separately from her husband and earned $140,000 in wages.
Q44.The Premium Tax Credit is:
Exam wording
A refundable credit.
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