[Nancy]

For the Reg exam do we need to memorize all the exemption dollar amounts and phase outs? I know the main ones like what is the standard deduction, personal exemption, etc. However, I keep getting these phase out questions in practice where a taxpayer has X amount of AGI over the threshold and you have to phase out their deduction/credit. Do we need to memorize the exact phase out amounts for single, head of household, and married filing jointly? Or will the exam provide these numbers? Especially the ones that change from year to year are hard to memorize.

For the below I know that the child tax credit is $1000 per child under a certain age..but had no idea what the phase out was for a head of household taxpayer.

Roland and Wanda Czewick have one child who is 14 years old. The Czewicks are divorced and, under the divorce agreement, Wanda claims the child as her dependent in the current year. Wanda’s adjusted gross income for the current year is $80,000. Wanda files as head of household. What is the child tax credit amount Wanda can claim in the current year?

A.

$750

B.

$600

C.

$350

D.

$0

Explanation: A married couple filing a joint return loses some or all of the child credit if the couple has modified adjusted gross income (AGI) in excess of $110,000. The credit is reduced by $50 for each $1,000 of modified AGI (or fraction thereof) in excess of the $110,000 threshold. Modified AGI is AGI determined without regard to foreign, possession, or Puerto Rico income exclusions.

Single filers and heads of household lose $50 of the credit for each $1,000 of modified AGI (or fraction thereof) in excess of $75,000.

Married taxpayers filing separate returns lose $50 of the credit for each $1,000 of modified AGI (or fraction thereof) in excess of $55,000.

For I can do everything through Christ, who gives me strength.
Philippians 4:13

[maki]

Nope you shouldn't worry about the ones that change year to year just like what you said standard deduction, exemption and know the phase out of the real estate loss.

Roger CPA

AUD 02/01/16 91
REG 02/27/16 79
BEC 04/16 84
FAR 06/04

[Author]

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