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J.K. Lasser's Your Income Tax 2018

Book Description

America's most trusted tax advice, backed by detailed citations of authoritative tax references

J.K. Lasser's Your Income Tax Professional Edition 2018 is the tax preparer's guide to smart tax filing and planning. The Professional Edition not only includes the trusted guidance, clear advice, and money-saving tips featured in Your Income Tax, but also provides citations of tax authorities to help tax professionals easily locate the law, IRS rulings and court decisions that support the text. Fully up to date with the newest changes for 2017 tax returns, expert guidance from J.K. Lasser helps you maximize deductions and shelter income while providing hundreds of examples of how tax laws apply to individual situations. While evolving tax law can get very complex very quickly, this invaluable guide is designed to help you find the answers you need without wading through volumes of the Internal Revenue Code or IRS materials. Special icons call out new laws, IRS rulings, court decisions, filing pointers and planning strategies, allowing you to locate important information without breaking your workflow.

Keeping up with changes to tax law is itself a full-time job—if it's not your full-time job, let the experts at J.K. Lasser do the legwork for you! Read from beginning to end or dip in and out as needed—this exceptional resource will help you:

  • Get expert answers to tough tax situations quickly
  • Navigate new laws, court decisions, IRS rulings, and more
  • Locate authoritative sources easily with citations of references from the Code, the courts and the IRS.
  • Avoid common pitfalls and adopt smart planning strategies for next year

Accessible, down-to-earth tax advice is always appreciated, but professional tax preparers need more—such as authoritative sources to back their advice and clarify tricky situations that their clients may encounter. J.K. Lasser's Your Income Tax Professional Edition 2018 provides a quick one-stop resource for every tax pro, merging detailed citations with America's most trusted tax advice for over 65 years.

Table of Contents

  1. Legislative Alert for 2018
  2. What’s New for 2017
  3. Key Tax Numbers for 2017
  4. Part 1 Filing Basics
    1. Do You Have to File a 2017 Tax Return?
    2. Filing Tests for Dependents: 2017 Returns
    3. Where to File Your 2017 Return
    4. Filing Deadlines (on or before)
    5. Which Tax Form Should You File?
    6. Chapter 1 Filing Status
      1. 1.1 Which Filing Status Should You Use?
      2. 1.2 Tax Rates Based on Filing Status
      3. 1.3 Filing Separately Instead of Jointly
      4. 1.4 Filing a Joint Return
      5. 1.5 Nonresident Alien Spouse
      6. 1.6 Community Property Rules
      7. 1.7 Innocent Spouse Rules
      8. 1.8 Separate Liability Relief for Former Spouses
      9. 1.9 Equitable Relief
      10. 1.10 Death of Your Spouse in 2017
      11. 1.11 Qualifying Widow/Widower Status for 2017 If Your Spouse Died in 2016 or 2015
      12. 1.12 Qualifying as Head of Household
      13. 1.13 Filing for Your Child
      14. 1.14 Return for Deceased
      15. 1.15 Return for an Incompetent Person
      16. 1.16 How a Nonresident Alien Is Taxed
      17. 1.17 How a Resident Alien Is Taxed
      18. 1.18 Who Is a Resident Alien?
      19. 1.19 Certificate of Tax Compliance for Alien Leaving the United States
      20. 1.20 Expatriation Tax
  5. Part 2 Reporting Your Income
    1. Chapter 2 Wages, Salary, and Other Compensation
      1. 2.1 Salary and Wage Income
      2. 2.2 Constructive Receipt of Year-End Paychecks
      3. 2.3 Pay Received in Property Is Taxed
      4. 2.4 Commissions Taxable When Credited
      5. 2.5 Unemployment Benefits
      6. 2.6 Strike Pay Benefits and Penalties
      7. 2.7 Nonqualified Deferred Compensation
      8. 2.8 Did You Return Wages Received in a Prior Year?
      9. 2.9 Waiver of Executor’s and Trustee’s Commissions
      10. 2.10 Life Insurance Benefits
      11. 2.11 Educational Benefits for Employees’ Children
      12. 2.12 Sick Pay Is Taxable
      13. 2.13 Workers’ Compensation Is Tax Free
      14. 2.14 Disability Pay and Pensions
      15. 2.15 Stock Appreciation Rights (SARs)
      16. 2.16 Stock Options
      17. 2.17 Restricted Stock
    2. Chapter 3 Fringe Benefits
      1. 3.1 Tax-Free Health and Accident Coverage Under Employer Plans
      2. 3.2 Health Savings Accounts (HSAs) and Archer MSAs
      3. 3.3 Reimbursements and Other Tax-Free Payments From Employer Health and Accident Plans
      4. 3.4 Group-Term Life Insurance Premiums
      5. 3.5 Dependent Care Assistance
      6. 3.6 Adoption Benefits
      7. 3.7 Education Assistance Plans
      8. 3.8 Company Cars, Parking, and Transit Passes
      9. 3.9 Working Condition Fringe Benefits
      10. 3.10 De Minimis Fringe Benefits
      11. 3.11 Employer-Provided Retirement Advice
      12. 3.12 Employee Achievement Awards
      13. 3.13 Employer-Furnished Meals or Lodging
      14. 3.14 Minister’s Housing or Housing Allowance
      15. 3.15 Cafeteria Plans Provide Choice of Benefits
      16. 3.16 Flexible Spending Arrangements
      17. 3.17 Company Services Provided at No Additional Cost
      18. 3.18 Discounts on Company Products or Services
    3. Chapter 4 Dividend and Interest Income
      1. 4.1 Reporting Dividends and Mutual Fund Distributions
      2. 4.2 Qualified Corporate Dividends Taxed at Favorable Capital Gain Rates
      3. 4.3 Dividends From a Partnership, S Corporation, Estate, or Trust
      4. 4.4 Real Estate Investment Trust (REIT) Dividends
      5. 4.5 Taxable Dividends of Earnings and Profits
      6. 4.6 Stock Dividends on Common Stock
      7. 4.7 Dividends Paid in Property
      8. 4.8 Taxable Stock Dividends
      9. 4.9 Who Reports the Dividends
      10. 4.10 Year Dividends Are Reported
      11. 4.11 Distribution Not Out of Earnings: Return of Capital
      12. 4.12 Reporting Interest on Your Tax Return
      13. 4.13 Interest on Frozen Accounts Not Taxed
      14. 4.14 Interest Income on Debts Owed to You
      15. 4.15 Reporting Interest on Bonds Bought or Sold
      16. 4.16 Forfeiture of Interest on Premature Withdrawals
      17. 4.17 Amortization of Bond Premium
      18. 4.18 Discount on Bonds
      19. 4.19 Reporting Original Issue Discount on Your Return
      20. 4.20 Reporting Income on Market Discount Bonds
      21. 4.21 Discount on Short-Term Obligations
      22. 4.22 Stripped Coupon Bonds and Stock
      23. 4.23 Sale or Retirement of Bonds and Notes
      24. 4.24 State and City Interest Generally Tax Exempt
      25. 4.25 Taxable State and City Interest
      26. 4.26 Tax-Exempt Bonds Bought at a Discount
      27. 4.27 Treasury Bills, Notes, and Bonds
      28. 4.28 Interest on United States Savings Bonds
      29. 4.29 Deferring United States Savings Bond Interest
      30. 4.30 Minimum Interest Rules
      31. 4.31 Interest-Free or Below-Market-Interest Loans
      32. 4.32 Minimum Interest on Seller-Financed Sales
    4. Chapter 5 Reporting Property Sales
      1. 5.1 General Tax Rules for Property Sales
      2. 5.2 How Property Sales Are Classified and Taxed
      3. 5.3 Capital Gains Rates and Holding Periods
      4. 5.4 Capital Losses and Carryovers
      5. 5.5 Capital Losses of Married Couples
      6. 5.6 Losses May Be Disallowed on Sales to Related Persons
      7. 5.7 Deferring or Excluding Gain on Sale of Small Business Stock Investment
      8. 5.8 Reporting Capital Asset Sales on Form 8949 and on Schedule D
      9. 5.9 Counting the Months in Your Holding Period
      10. 5.10 Holding Period for Securities
      11. 5.11 Holding Period for Real Estate
      12. 5.12 Holding Period: Gifts, Inheritances, and Other Property
      13. 5.13 Calculating Gain or Loss
      14. 5.14 Amount Realized Is the Total Selling Price
      15. 5.15 Finding Your Cost
      16. 5.16 Unadjusted Basis of Your Property
      17. 5.17 Basis of Property You Inherited or Received as a Gift
      18. 5.18 Joint Tenancy Basis Rules for Surviving Tenants
      19. 5.19 Allocating Cost Among Several Assets
      20. 5.20 How To Find Adjusted Basis
      21. 5.21 Tax Advantage of Installment Sales
      22. 5.22 Figuring the Taxable Part of Installment Payments
      23. 5.23 Electing Not To Report on the Installment Method
      24. 5.24 Restriction on Installment Sales to Relatives
      25. 5.25 Contingent Payment Sales
      26. 5.26 Using Escrow and Other Security Arrangements
      27. 5.27 Minimum Interest on Deferred Payment Sales
      28. 5.28 Dispositions of Installment Notes
      29. 5.29 Repossession of Personal Property Sold on Installment
      30. 5.30 Boot in Like-Kind Exchange Payable in Installments
      31. 5.31 “Interest” Tax if Sales Price Exceeds $150,000 With Over $5 Million Debt
      32. 5.32 Worthless Securities
      33. 5.33 Tax Consequences of Bad Debts
      34. 5.34 Four Rules To Prove a Bad Debt Deduction
      35. 5.35 Family Bad Debts
    5. Chapter 6 Tax-Free Exchanges of Property
      1. 6.1 Trades of Like-Kind Property
      2. 6.2 Personal Property Held for Business or Investment
      3. 6.3 Receipt of Cash and Other Property—“Boot”
      4. 6.4 Time Limits and Security Arrangements for Deferred Exchanges
      5. 6.5 Qualified Exchange Accommodation Arrangements (QEAAs) for Reverse Exchanges
      6. 6.6 Exchanges Between Related Parties
      7. 6.7 Property Transfers Between Spouses and Ex-Spouses
      8. 6.8 Tax-Free Exchanges of Stock in Same Corporation
      9. 6.9 Joint Ownership Interests
      10. 6.10 Setting up Closely Held Corporations
      11. 6.11 Exchanges of Coins and Bullion
      12. 6.12 Tax-Free Exchanges of Insurance Policies
    6. Chapter 7 Retirement and Annuity Income
      1. 7.1 Retirement Distributions on Form 1099-R
      2. 7.2 Lump-Sum Distributions
      3. 7.3 Lump-Sum Options If You Were Born Before January 2, 1936
      4. 7.4 Lump-Sum Payments Received by Beneficiary
      5. 7.5 Tax-Free Rollovers From Qualified Plans
      6. 7.6 Direct Rollover or Personal Rollover
      7. 7.7 Rollover of Proceeds From Sale of Property
      8. 7.8 Distribution of Employer Stock or Other Securities
      9. 7.9 Survivor Annuity for Spouse
      10. 7.10 Court Distributions to Former Spouse Under a QDRO
      11. 7.11 When Retirement Benefits Must Begin
      12. 7.12 Payouts to Beneficiaries
      13. 7.13 Penalty for Distributions Before Age 59½
      14. 7.14 Restrictions on Loans From Company Plans
      15. 7.15 Tax Benefits of 401(k) Plans
      16. 7.16 Limit on Salary-Reduction Deferrals
      17. 7.17 Withdrawals From 401(k) Plans Restricted
      18. 7.18 Designated Roth Account Within 401(k), 403(b), or Governmental 457 Plans
      19. 7.19 Annuities for Employees of Tax-Exempts and Schools (403(b) Plans)
      20. 7.20 Government and Exempt Organization Deferred Pay Plans
      21. 7.21 Figuring the Taxable Part of Commercial Annuities
      22. 7.22 Life Expectancy Tables
      23. 7.23 When You Convert Your Endowment Policy
      24. 7.24 Reporting Employee Annuities
      25. 7.25 Simplified Method for Calculating Taxable Employee Annuity
      26. 7.26 Employee’s Cost in Annuity
      27. 7.27 Withdrawals From Employer’s Qualified Retirement Plan Before Annuity Starting Date
    7. Chapter 8 IRAs
      1. 8.1 Starting a Traditional IRA
      2. 8.2 Traditional IRA Contributions Must Be Based on Earnings
      3. 8.3 Contributions to a Traditional IRA If You Are Married
      4. 8.4 IRA Deduction Restrictions for Active Participants in Employer Plan
      5. 8.5 Active Participation in Employer Plan
      6. 8.6 Nondeductible Contributions to Traditional IRAs
      7. 8.7 Penalty for Excess Contributions to Traditional IRAs
      8. 8.8 Distributions From Traditional IRAs
      9. 8.9 Partially Tax-Free Traditional IRA Distributions Allocable to Nondeductible Contributions
      10. 8.10 Tax-Free Direct Transfer or Rollover From One Traditional IRA to Another
      11. 8.11 Transfer of Traditional IRA to Spouse at Divorce
      12. 8.12 Penalty for Traditional IRA Withdrawals Before Age 59½
      13. 8.13 Mandatory Distributions From a Traditional IRA After Age 70½
      14. 8.14 Inherited Traditional IRAs
      15. 8.15 SEP Basics
      16. 8.16 Salary-Reduction SEP Set Up Before 1997
      17. 8.17 Who Is Eligible for a SIMPLE IRA?
      18. 8.18 SIMPLE IRA Contributions and Distributions
      19. 8.19 Roth IRA Advantages
      20. 8.20 Annual Contributions to a Roth IRA
      21. 8.21 Recharacterizing a Traditional IRA Contribution to a Roth IRA and Vice Versa
      22. 8.22 Converting a Traditional IRA to a Roth IRA
      23. 8.23 Recharacterizing a Conversion and Reconversions
      24. 8.24 Distributions From a Roth IRA
      25. 8.25 Distributions to Roth IRA Beneficiaries
      26. 8.26 my RA Program Discontinued
    8. Chapter 9 Income From Real Estate Rentals and Royalties
      1. 9.1 Reporting Rental Real Estate Income and Expenses
      2. 9.2 Checklist of Rental Deductions
      3. 9.3 Distinguishing Between a Repair and an Improvement
      4. 9.4 Reporting Rents From a Multi-Unit Residence
      5. 9.5 Depreciation on Converting a Home to Rental Property
      6. 9.6 Renting a Residence to a Relative
      7. 9.7 Personal Use and Rental of a Residence During the Year
      8. 9.8 Counting Personal-Use Days and Rental Days for a Residence
      9. 9.9 Allocating Expenses of a Residence to Rental Days
      10. 9.10 IRS May Challenge Loss Claimed on Temporary Rental Before Sale
      11. 9.11 Reporting Royalty Income
      12. 9.12 Production Costs of Books and Creative Properties
      13. 9.13 Deducting the Cost of Patents or Copyrights
      14. 9.14 Intangible Drilling Costs
      15. 9.15 Depletion Deduction
      16. 9.16 Oil and Gas Percentage Depletion
    9. Chapter 10 Loss Restrictions: Passive Activities and At-Risk Limits
      1. 10.1 Rental Activities Generally Treated as Passive
      2. 10.2 Rental Real Estate Loss Allowance of up to $25,000
      3. 10.3 Real Estate Professionals
      4. 10.4 Participation May Avoid Passive Loss Restrictions
      5. 10.5 Classifying Business Activities as One or Several
      6. 10.6 Material Participation Tests for Business
      7. 10.7 Tax Credits of Passive Activities Limited
      8. 10.8 Determining Passive or Nonpassive Income and Loss
      9. 10.9 Passive Income Recharacterized as Nonpassive Income
      10. 10.10 Working Interests in Oil and Gas Wells
      11. 10.11 Partners and Members of LLCs and LLPs
      12. 10.12 Form 8582 and Other Tax Forms
      13. 10.13 Suspended Losses Allowed on Disposition of Your Interest
      14. 10.14 Suspended Tax Credits
      15. 10.15 Personal Service and Closely Held Corporations
      16. 10.16 Sales of Property and of Passive Activity Interests
      17. 10.17 At-Risk Limits
      18. 10.18 What Is At Risk?
      19. 10.19 Amounts Not At Risk
      20. 10.20 At-Risk Investment in Several Activities
      21. 10.21 Carryover of Disallowed Losses
      22. 10.22 Recapture of Losses Where At Risk Is Less Than Zero
    10. Chapter 11 Other Income
      1. 11.1 Prizes and Awards
      2. 11.2 Lottery and Sweepstake Winnings
      3. 11.3 Gambling Winnings and Losses
      4. 11.4 Gifts and Inheritances
      5. 11.5 Refunds of State and Local Income Tax Deductions
      6. 11.6 Other Recovered Deductions
      7. 11.7 How Legal Damages Are Taxed
      8. 11.8 Cancellation of Debts You Owe
      9. 11.9 Schedule K-1
      10. 11.10 How Partners Report Partnership Profit and Loss
      11. 11.11 When a Partner Reports Income or Loss
      12. 11.12 Partnership Loss Limitations
      13. 11.13 Tax Audits of Partnerships
      14. 11.14 Stockholder Reporting of S Corp Income and Loss
      15. 11.15 How Beneficiaries Report Estate or Trust Income
      16. 11.16 Reporting Income in Respect of a Decedent (IRD)
      17. 11.17 Deduction for Estate Tax Attributable to IRD
      18. 11.18 How Life Insurance Proceeds Are Taxed to a Beneficiary
      19. 11.19 A Policy With a Family Income Rider
      20. 11.20 Selling or Surrendering Life Insurance Policy
      21. 11.21 Jury Duty Fees
      22. 11.22 Foster Care Payments
  6. Part 3 Claiming Deductions
    1. Chapter 12 Deductions Allowed in Figuring Adjusted Gross Income
      1. 12.1 Figuring Adjusted Gross Income (AGI)
      2. 12.2 Claiming Deductions From Gross Income
      3. 12.3 What Moving Costs Are Deductible?
      4. 12.4 The Distance Test
      5. 12.5 The 39-Week Test for Employees
      6. 12.6 The 78-Week Test for the Self-Employed and Partners
      7. 12.7 Claiming Deductible Moving Expenses
      8. 12.8 Reimbursements of Moving Expenses
    2. Chapter 13 Claiming the Standard Deduction or Itemized Deductions
      1. 13.1 Claiming the Standard Deduction
      2. 13.2 When To Itemize
      3. 13.3 Spouses Filing Separate Returns
      4. 13.4 Standard Deduction If 65 or Older or Blind
      5. 13.5 Standard Deduction for Dependents
      6. 13.6 Prepaying or Postponing Itemized Expenses
      7. 13.7 Itemized Deductions Reduced for Higher-Income Taxpayers
    3. Chapter 14 Charitable Contribution Deductions
      1. 14.1 Deductible Contributions
      2. 14.2 Nondeductible Contributions
      3. 14.3 Contributions That Provide You With Benefits
      4. 14.4 Unreimbursed Expenses of Volunteer Workers
      5. 14.5 Support of a Student in Your Home
      6. 14.6 What Kind of Property Are You Donating?
      7. 14.7 Cars, Clothing, and Other Property Valued Below Cost
      8. 14.8 Bargain Sales of Appreciated Property
      9. 14.9 Art Objects
      10. 14.10 Interests in Real Estate
      11. 14.11 Life Insurance
      12. 14.12 Business Inventory
      13. 14.13 Donations Through Trusts
      14. 14.14 Records Needed To Substantiate Your Contributions
      15. 14.15 Form 8283 and Written Appraisal Requirements for Property Donations
      16. 14.16 Penalty for Substantial Overvaluation of Property
      17. 14.17 Ceiling on Charitable Contributions
      18. 14.18 Carryover for Excess Donations
      19. 14.19 Election To Reduce Fair Market Value by Appreciation
    4. Chapter 15 Itemized Deduction for Interest Expenses
      1. 15.1 Home Mortgage Interest
      2. 15.2 Home Acquisition Loans
      3. 15.3 Home Equity Loans
      4. 15.4 Home Construction Loans
      5. 15.5 Home Improvement Loans
      6. 15.6 Mortgage Insurance Premiums and Other Payment Rules
      7. 15.7 Interest on Refinanced Loans
      8. 15.8 “Points”
      9. 15.9 Cooperative and Condominium Apartments
      10. 15.10 Investment Interest Limitations
      11. 15.11 Debts To Carry Tax-Exempt Obligations
      12. 15.12 Earmarking Use of Loan Proceeds For Investment or Business
      13. 15.13 Year To Claim an Interest Deduction
      14. 15.14 Prepaid Interest
    5. Chapter 16 Deductions for Taxes
      1. 16.1 Deductible Taxes
      2. 16.2 Nondeductible Taxes
      3. 16.3 State and Local Income Taxes or General Sales Taxes
      4. 16.4 Deducting Real Estate Taxes
      5. 16.5 Assessments
      6. 16.6 Tenants’ Payment of Taxes
      7. 16.7 Allocating Taxes When You Sell or Buy Realty
      8. 16.8 Automobile License Fees
      9. 16.9 Taxes Deductible as Business Expenses
      10. 16.10 Foreign Taxes
    6. Chapter 17 Medical and Dental Expense Deductions
      1. 17.1 Medical and Dental Expenses Must Exceed AGI Threshold
      2. 17.2 Allowable Medical and Dental Care Costs
      3. 17.3 Nondeductible Medical Expenses
      4. 17.4 Reimbursements Reduce Deductible Expenses
      5. 17.5 Expenses of Your Spouse
      6. 17.6 Expenses of Your Dependents
      7. 17.7 Decedent’s Medical Expenses
      8. 17.8 Premiums for Health Insurance
      9. 17.9 Travel Costs May Be Medical Deductions
      10. 17.10 Schooling for the Mentally or Physically Disabled
      11. 17.11 Nursing Homes
      12. 17.12 Nurses’ Wages
      13. 17.13 Home Improvements as Medical Expenses
      14. 17.14 Costs Deductible as Business Expenses
      15. 17.15 Long-Term Care Premiums and Services
      16. 17.16 Life Insurance Used by Chronically ill or Terminally ill Persons
    7. Chapter 18 Casualty and Theft Losses and Involuntary Conversions
      1. 18.1 Sudden Event Test for Casualty Losses
      2. 18.2 When To Deduct a Casualty Loss
      3. 18.3 Disaster Losses
      4. 18.4 Who May Deduct a Casualty Loss
      5. 18.5 Bank Deposit Losses
      6. 18.6 Damage to Trees and Shrubs
      7. 18.7 Deducting Damage to Your Car
      8. 18.8 Proving a Casualty Loss
      9. 18.9 Theft Losses
      10. 18.10 Proving a Theft Loss
      11. 18.11 Nondeductible Casualty and Theft Losses
      12. 18.12 Floors for Personal-Use Property Losses
      13. 18.13 Figuring Your Loss on Form 4684
      14. 18.14 Personal and Business Use of Property
      15. 18.15 Repairs May Be a “Measure of Loss”
      16. 18.16 Insurance Reimbursements
      17. 18.17 Excess Living Costs Paid by Insurance Are Not Taxable
      18. 18.18 Do Your Casualty or Theft Losses Exceed Your Income?
      19. 18.19 Defer Gain by Replacing Property
      20. 18.20 Involuntary Conversions Qualifying for Tax Deferral
      21. 18.21 How To Elect To Defer Tax
      22. 18.22 Time Period for Buying Replacement Property
      23. 18.23 Types of Qualifying Replacement Property
      24. 18.24 Cost of Replacement Property Determines Postponed Gain
      25. 18.25 Special Assessments and Severance Damages
      26. 18.26 Reporting Gains From Casualties
    8. Chapter 19 Deducting Job Costs and Other Miscellaneous Expenses
      1. 19.1 2% of AGI Floor Reduces Most Miscellaneous Expenses
      2. 19.2 Effect of 2% of AGI Floor on Miscellaneous Deductions
      3. 19.3 Checklist of Job Expenses Subject to the 2% of AGI Floor
      4. 19.4 Job Expenses Not Subject to the 2% of AGI Floor
      5. 19.5 Other Miscellaneous Expenses Not Subject to the 2% of AGI Floor
      6. 19.6 Dues and Subscriptions
      7. 19.7 Uniforms and Work Clothes
      8. 19.8 Expenses of Looking for a New Job
      9. 19.9 Local Transportation Costs
      10. 19.10 Unusual Job Expenses
      11. 19.11 Computer Bought for Job
      12. 19.12 Cell Phones, Calculators, Copiers and Fax Machines
      13. 19.13 Small Tools
      14. 19.14 Employee Home Office Deductions
      15. 19.15 Telephone Costs
      16. 19.16 Checklist of Deductible Investment Expenses
      17. 19.17 Costs of Tax Return Preparation and Audits
      18. 19.18 Deducting Legal Costs
      19. 19.19 Contingent Fees Paid Out of Taxable Awards
    9. Chapter 20 Travel and Entertainment Expense Deductions
      1. 20.1 Deduction Guide for Travel and Transportation Expenses
      2. 20.2 Commuting Expenses
      3. 20.3 Overnight-Sleep Test Limits Deduction of Meal Costs
      4. 20.4 IRS Meal Allowance
      5. 20.5 Business Trip Deductions
      6. 20.6 Local Lodging Costs
      7. 20.7 When Are You Away From Home?
      8. 20.8 Fixing a Tax Home If You Work in Different Locations
      9. 20.9 Tax Home of Married Couple Working in Different Cities
      10. 20.10 Deducting Living Costs on Temporary Assignment
      11. 20.11 Business-Vacation Trips Within the United States
      12. 20.12 Business-Vacation Trips Outside the United States
      13. 20.13 Deducting Expenses of Business Conventions
      14. 20.14 Travel Expenses of a Spouse, Dependent, or Business Associate
      15. 20.15 Restrictions on Foreign Conventions and Cruises
      16. 20.16 50% Deduction Limit
      17. 20.17 The Restrictive Tests for Meals and Entertainment
      18. 20.18 Directly Related Dining and Entertainment
      19. 20.19 Goodwill Entertainment
      20. 20.20 Home Entertaining
      21. 20.21 Your Personal Share of Entertainment Costs
      22. 20.22 Entertainment Costs of Spouses
      23. 20.23 Entertainment Facilities and Club Dues
      24. 20.24 Restrictive Test Exception for Reimbursements
      25. 20.25 50% Cost Limitation on Meals and Entertainment
      26. 20.26 Business Gift Deductions Are Limited
      27. 20.27 Recordkeeping Requirements
      28. 20.28 Proving Travel and Entertainment Expenses
      29. 20.29 Reporting T&E Expenses If You Are Self-Employed
      30. 20.30 Employee Reporting of Unreimbursed T&E Expenses
      31. 20.31 Tax Treatment of Reimbursements
      32. 20.32 What Is an Accountable Plan?
      33. 20.33 Per Diem Travel Allowance Under Accountable Plans
      34. 20.34 Automobile Mileage Allowance
      35. 20.35 Reimbursements Under Non-Accountable Plans
    10. Chapter 21 Personal Exemptions
      1. 21.1 How Many Exemptions May You Claim?
      2. 21.2 Your Spouse as an Exemption
      3. 21.3 Qualifying Children
      4. 21.4 Qualifying Relatives
      5. 21.5 Meeting the Support Test for a Qualifying Relative
      6. 21.6 Multiple Support Agreements
      7. 21.7 Special Rule for Divorced or Separated Parents
      8. 21.8 The Dependent Must Meet a Citizen or Resident Test
      9. 21.9 The Dependent Does Not File a Joint Return
      10. 21.10 Spouses’ Names and Social Security Numbers on Joint Return
      11. 21.11 Reporting Social Security Numbers of Dependents
      12. 21.12 Phaseout of Personal Exemptions
  7. Part 4 Personal Tax Computations
    1. Chapter 22 Figuring Your Regular Income Tax Liability
      1. 22.1 Taxable Income and Regular Income Tax Liability
      2. 22.2 Using the Tax Table
      3. 22.3 Tax Computation Worksheet
      4. 22.4 Tax Calculation If You Have Net Capital Gain or Qualified Dividends
      5. 22.5 Foreign Earned Income Tax Worksheet
      6. 22.6 Income Averaging for Farmers and Fishermen
      7. 22.7 Tax Credits
      8. 22.8 Additional Medicare Tax and Net Investment Income Tax
    2. Chapter 23 Alternative Minimum Tax (AMT)
      1. 23.1 Computing Alternative Minimum Tax on Form 6251
      2. 23.2 Adjustments and Preferences for AMT
      3. 23.3 Tax Credits Allowed Against AMT
      4. 23.4 Regular Tax Credit for Prior-Year AMT
      5. 23.5 Avoiding AMT
    3. Chapter 24 Computing the “Kiddie Tax” on Your Child’s Investment Income
      1. 24.1 Filing Your Child’s Return
      2. 24.2 Children Subject to “Kiddie Tax” for 2017
      3. 24.3 Computing “Kiddie Tax” on Child’s Return
      4. 24.4 Parent’s Election To Report Child’s Dividends and Interest
    4. Chapter 25 Personal Tax Credits Reduce Your Tax Liability
      1. 25.1 Overview of Personal Tax Credits
      2. 25.2 Child Tax Credit for Children Under Age 17
      3. 25.3 Figuring the Child Tax Credit
      4. 25.4 Qualifying for the Child and Dependent Care Credit
      5. 25.5 Figuring the Dependent Care Credit
      6. 25.6 Qualifying Tests for EIC
      7. 25.7 Income Tests for Earned Income Credit (EIC)
      8. 25.8 Qualifying for the Adoption Credit
      9. 25.9 Claiming the Adoption Credit on Form 8839
      10. 25.10 Eligibility for the Saver’s Credit
      11. 25.11 Figuring the Saver’s Credit
      12. 25.12 Premium Tax Credit
      13. 25.13 Health Coverage Credit
      14. 25.14 Mortgage Interest Credit
      15. 25.15 Residential Energy Credits
      16. 25.16 Credit for Qualified Plug-in Electric and Fuel Cell Vehicles
      17. 25.17 Repayment of the First-Time Homebuyer Credit
    5. Chapter 26 Tax Withholdings
      1. 26.1 Withholdings Should Cover Estimated Tax
      2. 26.2 Income Taxes Withheld on Wages
      3. 26.3 Low Earners May Be Exempt From Withholding
      4. 26.4 Are You Withholding the Right Amount?
      5. 26.5 Voluntary Withholding on Government Payments
      6. 26.6 When Tips Are Subject to Withholding
      7. 26.7 Withholding on Gambling Winnings
      8. 26.8 FICA Withholdings
      9. 26.9 Withholding on Distributions from Retirement Plans and Commercial Annuities
      10. 26.10 Backup Withholding
    6. Chapter 27 Estimated Tax Payments
      1. 27.1 Do You Owe an Estimated Tax Penalty for 2017?
      2. 27.2 Planning Estimated Tax Payments for 2018
      3. 27.3 Dates for Paying Estimated Tax Installments for 2018
      4. 27.4 Estimates by Married Taxpayers
      5. 27.5 Adjusting Your Payments During the Year
    7. Chapter 28 Additional Medicare Tax and Net Investment Income Tax
      1. 28.1 Higher-Income Taxpayers May be Subject to Additional Taxes
      2. 28.2 Additional 0.9% Medicare Tax on Earnings
      3. 28.3 Additional 3.8% Tax on Net Investment Income
  8. Part 5 Tax Planning
    1. Chapter 29 Tax Savings for Residence Sales
      1. 29.1 Avoiding Tax on Sale of Principal Residence
      2. 29.2 Meeting the Ownership and Use Tests for Exclusion
      3. 29.3 Home Sales by Married Persons
      4. 29.4 Reduced Maximum Exclusion
      5. 29.5 Figuring Gain or Loss
      6. 29.6 Figuring Adjusted Basis
      7. 29.7 Personal and Business Use of a Home
      8. 29.8 No Loss Allowed on Personal Residence
      9. 29.9 Loss on Residence Converted to Rental Property
      10. 29.10 Loss on Residence Acquired by Gift or Inheritance
    2. Chapter 30 Tax Rules for Investors in Securities
      1. 30.1 Planning Year-End Securities Transactions
      2. 30.2 Earmarking Stock Lots
      3. 30.3 Sale of Stock Dividends
      4. 30.4 Stock Rights
      5. 30.5 Short Sales of Stock
      6. 30.6 Wash Sales
      7. 30.7 Convertible Stocks and Bonds
      8. 30.8 Stock Options
      9. 30.9 Sophisticated Financial Transactions
      10. 30.10 Investing in Tax-Exempts
      11. 30.11 Ordinary Loss for Small Business Stock (Section 1244)
      12. 30.12 Series EE Bonds
      13. 30.13 I Bonds
      14. 30.14 Trader, Dealer, or Investor?
      15. 30.15 Mark-to-Market Election for Traders
    3. Chapter 31 Tax Savings for Investors in Real Estate
      1. 31.1 Real Estate Ventures
      2. 31.2 Sales of Subdivided Land—Dealer or Investor?
      3. 31.3 Exchanging Real Estate Without Tax
      4. 31.4 Timing Your Real Property Sales
      5. 31.5 Cancellation of a Lease
      6. 31.6 Sale of an Option
      7. 31.7 Granting of an Easement
      8. 31.8 Special Tax Credits for Real Estate Investments
      9. 31.9 Foreclosures, Repossessions, Short Sales, and Voluntary Conveyances to Creditors
      10. 31.10 Restructuring Mortgage Debt
      11. 31.11 Abandonments
      12. 31.12 Seller’s Repossession After Buyer’s Default on Mortgage
      13. 31.13 Foreclosure on Mortgages Other Than Purchase Money
      14. 31.14 Foreclosure Sale to Third Party
      15. 31.15 Transferring Mortgaged Realty
    4. Chapter 32 Tax Rules for Investors in Mutual Funds
      1. 32.1 Timing of Your Investment Can Affect Your Taxes
      2. 32.2 Reinvestment Plans
      3. 32.3 Mutual Fund Distributions Reported on Form 1099-DIV
      4. 32.4 Tax-Exempt Bond Funds
      5. 32.5 Fund Expenses
      6. 32.6 Tax Credits From Mutual Funds
      7. 32.7 How To Report Mutual Fund Distributions
      8. 32.8 Redemptions and Exchanges of Fund Shares
      9. 32.9 Basis of Redeemed Shares
      10. 32.10 Comparison of Basis Methods
      11. 32.11 Mutual Funds Compared to Exchange-Traded Funds
    5. Chapter 33 Educational Tax Benefits
      1. 33.1 Scholarships and Grants
      2. 33.2 Tuition Reductions for College Employees
      3. 33.3 How Fulbright Awards Are Taxed
      4. 33.4 United States Savings Bond Tuition Plans
      5. 33.5 Contributing to a Qualified Tuition Program (Section 529 Plan)
      6. 33.6 Distributions From Qualified Tuition Programs (Section 529 Plans)
      7. 33.7 Education Tax Credits
      8. 33.8 American Opportunity Credit
      9. 33.9 Lifetime Learning Credit
      10. 33.10 Contributing to a Coverdell Education Savings Account (ESA)
      11. 33.11 Distributions From Coverdell ESAs
      12. 33.12 Tuition and Fees Deduction
      13. 33.13 Student Loan Interest Deduction
      14. 33.14 Types of Deductible Work-Related Costs
      15. 33.15 Work-Related Tests for Education Costs
      16. 33.16 Local Transportation and Travel Away From Home To Take Courses
    6. Chapter 34 Special Tax Rules for Senior Citizens and the Disabled
      1. 34.1 Senior Citizens Get Certain Filing Breaks
      2. 34.2 Social Security Benefits Subject to Tax
      3. 34.3 Computing Taxable Social Security Benefits
      4. 34.4 Election for Lump-Sum Social Security Benefit Payment
      5. 34.5 Retiring on Social Security Benefits
      6. 34.6 How Tax on Social Security Reduces Your Earnings
      7. 34.7 Eligibility for the Credit for the Elderly or the Disabled
      8. 34.8 Figuring the Credit for the Elderly or Disabled
      9. 34.9 Tax Effects of Moving to a Continuing Care Facility
      10. 34.10 Medicare Part B and Part D Premiums for 2018
      11. 34.11 Special Tax Rules for the Disabled
      12. 34.12 ABLE Accounts
    7. Chapter 35 Members of the Armed Forces
      1. 35.1 Taxable Armed Forces Pay and Benefits
      2. 35.2 Tax Breaks for Armed Forces Members
      3. 35.3 Deductions for Armed Forces Personnel
      4. 35.4 Tax-Free Pay for Service in Combat Zone
      5. 35.5 Tax Deadlines Extended for Combat Zone or Contingency Operation Service
      6. 35.6 Tax Forgiveness for Combat Zone or Terrorist or Military Action Deaths
      7. 35.7 Extension To Pay Your Tax When Entering the Service
      8. 35.8 Tax Information for Reservists
    8. Chapter 36 How To Treat Foreign Earned Income
      1. 36.1 Claiming the Foreign Earned Income Exclusion
      2. 36.2 What Is Foreign Earned Income?
      3. 36.3 Qualifying for the Foreign Earned Income Exclusion
      4. 36.4 How To Treat Housing Costs
      5. 36.5 Meeting the Foreign Residence or Physical Presence Test
      6. 36.6 Claiming Deductions
      7. 36.7 Exclusion Not Established When Your Return Is Due
      8. 36.8 Tax-Free Meals and Lodging for Workers in Camps
      9. 36.9 U. S. Virgin Islands, Samoa, Guam, and Northern Marianas
      10. 36.10 Earnings in Puerto Rico
      11. 36.11 Tax Treaties With Foreign Countries
      12. 36.12 Exchange Rates and Blocked Currency
      13. 36.13 Foreign Tax Credit or Deduction for Foreign Taxes Paid
    9. Chapter 37 Planning Alimony and Marital Settlements
      1. 37.1 Planning Alimony Agreements
      2. 37.2 Decree or Agreement Required
      3. 37.3 Cash Payments Required
      4. 37.4 Payments Must Stop at Death
      5. 37.5 Child Support Payments Are Not Alimony
      6. 37.6 No Minimum Payment Period for Alimony
      7. 37.7 3rd Year Recapture If Alimony Drops by More Than $15,000
      8. 37.8 Legal Fees of Marital Settlements
    10. Chapter 38 Other Taxes
      1. 38.1 Overview of Household Employment Taxes
      2. 38.2 Social Security and Medicare (FICA) Taxes for Household Employees
      3. 38.3 Filing Schedule H To Report Household Employment Taxes
      4. 38.4 Federal Unemployment Taxes (FUTA) for Household Employees
      5. 38.5 Individual Responsibility Penalty
      6. 38.6 Exemption from Individual Responsibility Payment
    11. Chapter 39 Gift and Estate Tax Planning Basics
      1. 39.1 Gifts of Appreciated Property
      2. 39.2 Gift Tax Basics
      3. 39.3 Filing a Gift Tax Return
      4. 39.4 Gift Tax Credit
      5. 39.5 Custodial Accounts for Minors
      6. 39.6 Trusts in Family Planning
      7. 39.7 What is the Estate Tax?
      8. 39.8 Take Inventory and Estimate the Value of Your Potential Estate
      9. 39.9 Estate Tax for 2017
      10. 39.10 Planning for a Potential Estate Tax
  9. Part 6 Business Tax Planning
    1. Chapter 40 Income or Loss From Your Business or Profession
      1. 40.1 Forms of Doing Business
      2. 40.2 Reporting Self-Employed Income
      3. 40.3 Accounting Methods for Reporting Business Income
      4. 40.4 Tax Reporting Year for Self-Employed
      5. 40.5 Reporting Certain Payments and Receipts to the IRS
      6. 40.6 Filing Schedule C
      7. 40.7 Deductions for Professionals
      8. 40.8 Nondeductible Expense Items
      9. 40.9 How Authors and Artists May Write Off Expenses
      10. 40.10 Deducting Expenses of a Sideline Business or Hobby
      11. 40.11 Deducting Expenses of Looking for a New Business
      12. 40.12 Home Office Deduction
      13. 40.13 Write-Off Methods for Home Office Expenses
      14. 40.14 Allocating Expenses to Business Use
      15. 40.15 Business Income May Limit Home Office Deductions
      16. 40.16 Home Office for Sideline Business
      17. 40.17 Depreciation of Office in Cooperative Apartment
      18. 40.18 Net Operating Losses (NOLs)
      19. 40.19 Your Net Operating Loss
      20. 40.20 How To Report a Net Operating Loss
      21. 40.21 How To Carry Back Your Net Operating Loss
      22. 40.22 Election to Carry Forward Losses
      23. 40.23 Domestic Production Activities Deduction
      24. 40.24 Qualified Production Activities
      25. 40.25 Figuring the Deduction on Form 8903
      26. 40.26 Business Credits
      27. 40.27 Filing Schedule F
      28. 40.28 Farming Expenses
    2. Chapter 41 Retirement and Medical Plans for Self-Employed
      1. 41.1 Overview of Retirement and Medical Plans
      2. 41.2 Choosing a Qualified Retirement Plan
      3. 41.3 Choosing a SEP
      4. 41.4 Deductible Contributions
      5. 41.5 How To Claim the Deduction for Contributions
      6. 41.6 How To Qualify a Retirement Plan or SEP Plan
      7. 41.7 Annual Qualified Retirement Plan Reporting
      8. 41.8 How Qualified Retirement Plan Distributions Are Taxed
      9. 41.9 SIMPLE IRA Plans
      10. 41.10 Health Savings Account (HSA) Basics
      11. 41.11 Limits on Deductible HSA Contributions
      12. 41.12 Distributions From HSAs
      13. 41.13 Archer MSAs
      14. 41.14 Small Employer Health Insurance Credit
    3. Chapter 42 Claiming Depreciation Deductions
      1. 42.1 What Property May Be Depreciated?
      2. 42.2 Claiming Depreciation on Your Tax Return
      3. 42.3 First-Year Expensing Deduction
      4. 42.4 MACRS Recovery Periods
      5. 42.5 MACRS Rates
      6. 42.6 Half-Year Convention for MACRS
      7. 42.7 Last Quarter Placements—Mid-Quarter Convention
      8. 42.8 150% Rate Election
      9. 42.9 Straight-Line Depreciation
      10. 42.10 Computers and Other Listed Property
      11. 42.11 Assets in Service Before 1987
      12. 42.12 MACRS for Real Estate Placed in Service After 1986
      13. 42.13 Demolishing a Building
      14. 42.14 Qualified Leasehold and Retail Improvements and Restaurant Property
      15. 42.15 Depreciating Real Estate Placed in Service After 1980 and Before 1987
      16. 42.16 When MACRS Is Not Allowed
      17. 42.17 Amortizing Goodwill and Other Intangibles (Section 197)
      18. 42.18 Deducting the Cost of Computer Software
      19. 42.19 Amortizing Research and Experimentation Costs
      20. 42.20 Bonus Depreciation
    4. Chapter 43 Deducting Car and Truck Expenses
      1. 43.1 Standard Mileage Rate
      2. 43.2 Expense Allocations
      3. 43.3 Depreciation Restrictions on Cars, Trucks, and Vans
      4. 43.4 Annual Ceilings on Depreciation
      5. 43.5 MACRS Rates for Cars, Trucks, and Vans
      6. 43.6 Straight-Line Method
      7. 43.7 Depreciation for Year Vehicle Is Disposed of
      8. 43.8 Depreciation After Recovery Period Ends
      9. 43.9 Trade-in of Business Vehicle
      10. 43.10 Recapture of Deductions on Business Car, Truck, or Van
      11. 43.11 Keeping Records of Business Use
      12. 43.12 Leased Business Vehicles: Deductions and Income
    5. Chapter 44 Sales of Business Property
      1. 44.1 Depreciation Recaptured as Ordinary Income on Sale of Personal Property
      2. 44.2 Depreciation Recaptured as Ordinary Income on Sale of Real Estate
      3. 44.3 Recapture of First-Year Expensing
      4. 44.4 Gifts and Inheritances of Depreciable Property
      5. 44.5 Involuntary Conversions and Tax-Free Exchanges
      6. 44.6 Installment Sale of Depreciable Property
      7. 44.7 Sale of a Proprietorship
      8. 44.8 Property Used in a Business (Section 1231 Assets)
      9. 44.9 Sale of Property Used for Business and Personal Purposes
      10. 44.10 Should You Trade in Business Equipment?
      11. 44.11 Corporate Liquidation
      12. 44.12 Additional Taxes on Higher-Income Taxpayers
    6. Chapter 45 Figuring Self-Employment Tax
      1. 45.1 What Is Self-Employment Income?
      2. 45.2 Partners Pay Self-Employment Tax
      3. 45.3 Schedule SE
      4. 45.4 How Wages Affect Self-Employment Tax
      5. 45.5 Optional Method If 2017 Was a Low-Income or Loss Year
      6. 45.6 Self-Employment Tax Rules for Certain Positions
  10. Part 7 Filing Your Return and What Happens After You File
    1. Chapter 46 Filing Your Return
      1. 46.1 Keeping Tax Records
      2. 46.2 Getting Ready To File Your Return
      3. 46.3 Applying for an Extension
      4. 46.4 Getting Your Refund
      5. 46.5 Paying Taxes Due
      6. 46.6 Handling Identity Theft
      7. 46.7 Notify the IRS of Address Changes
      8. 46.8 Interest on Tax Underpayments
      9. 46.9 Tax Penalties for Late Filing and Late Payment
    2. Chapter 47 Filing Refund Claims, and Amended Returns
      1. 47.1 Filing An Amended Return
      2. 47.2 When To File a Refund Claim
      3. 47.3 Stating the Reasons for Refund Claim
      4. 47.4 Quick Refund Claims
      5. 47.5 Interest Paid on Refund Claims
      6. 47.6 Refunds Withheld To Cover Debts
      7. 47.7 Amended Returns Showing Additional Tax
      8. 47.8 Penalty for Filing Excessive Refund Claim
    3. Chapter 48 If the IRS Examines Your Return
      1. 48.1 Odds of Being Audited
      2. 48.2 When the IRS Can Assess Additional Taxes
      3. 48.3 Audit Overview
      4. 48.4 Preparing for the Audit
      5. 48.5 Handling the Audit
      6. 48.6 Tax Penalties for Inaccurate Returns
      7. 48.7 Penalties for Not Reporting Foreign Financial Accounts
      8. 48.8 Agreeing to the Audit Changes
      9. 48.9 Disputing the Audit Changes
      10. 48.10 Offer in Compromise
      11. 48.11 Recovering Costs of a Tax Dispute
      12. 48.12 Suing the IRS for Unauthorized Collection
  11. Part 8 2017 Sample Tax Forms
    1. 2017 Form 1040
      1. Schedule A
      2. Schedule B
      3. Schedule C
      4. Schedule D
    2. 2017 Tax Table
    3. 2017 Tax Computation Worksheet
    4. 2017 Earned Income Credit Table
  12. Part 9 Tax Law Authorities
    1. Legislative Authorities
      1. Internal Revenue Code
      2. Congressional Committee Reports
    2. Administrative Authorities
      1. Treasury Regulations
      2. Revenue Rulings
      3. In the Weekly Internal Revenue Bulletin
      4. In the Cumulative Bulletin
      5. Other IRS Rulings and Releases
    3. Judicial Authorities
      1. Court Decisions
      2. U.S. Tax Court
      3. Federal District Court
      4. U.S. Court of Federal Claims
      5. Court of Appeals Decisions
      6. Supreme Court Decisions
      7. States Within Court of Appeals Regions
  13. Part 10 Citations of Authority
    1. Key to Citations
  14. Part 11 Practice Before the IRS
    1. How Returns Are Examined
    2. Audit Rules for Partnerships
    3. The Time Limits Within Which the IRS Must Act for Additional taxes
    4. Filing Refund Claims
    5. How to Arrange Closing Agreements and Compromises
    6. How to Get the IRS’ Opinion on a Tax Problem
    7. Circular 230: Practice Before the IRS
    8. Tax Return Preparer Penalties
  15. Glossary
  16. Index
  17. EULA