Above the Line Deductions
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What are above the line adjustments?
They're deductions that directly reduce your income. Adjustments can be claimed in addition to standard deduction or itemized deduction.
What are the requirements to claim educator expenses of $250?
- 1. Must be a K-12 teacher
- 2. Worked at least 900 hours in a school that provides elementary or secondary education
- 3. Had qualifying educator expenses such as books, supplies and equipment
*This deduction is not available to home school teachers.
I'm a performing artist. What requirements do I need to meet to claim business expenses as an adjustment?
- 1. You had to have performed services for 2/+ employees and paid at least $200 each
- 2. your expense was more than 10% of the income you got for performing
- 3. your AGI before deducting the business expenses is less than $16,000
T/F: Guard and reserve members can claim their unreimbursed overnight travel expenses (transportation, meals, lodging) as an adjustment. They must have travelled more than ___ miles away from home.
True. 100 miles
What's an HSA? What are the requirements to have one?
It's a tax-exempt trust or custodial account that's used to pay qualified medical expenses.
You must be covered under a high deductible health plan only during the time you make contributions to an HSA. No Medicare or other health plans (except for limited plans with limited coverage)
What is a high deductible health plan (HDHP)?
It's basically a health plan that has requirements regarding deductibles and out-of-pocket expenses.
What are the HDHP deductible and out of pocket expense amounts for 2014?
- Individual deductible: at least $1,250
- Individual out of pocket expenses: $6,350
- Family deductible: at least $2,500
- Family out of pocket expenses: $12,700
T/F: Except for preventive care, benefits under an HDHP shouldn't kick in until the entire deductible is met.
True. If benefits kick in before annual deductible is met, then the health plan is not considered a qualifying HDHP.
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