Is this a requirement for a taxpayer to be eligible Yes. You can't claim the EIC unless your investment income is $11,000 or
for the Earned Income Tax Credit for tax year less.
2023?
A taxpayer must have investment income below
$11,000.00.
Hints:
To claim the Earned Income Tax Credit (EITC), you
much have what qualifies as earned income and
meet certain adjusted gross income (AGI) and
have investment income of $11,000 or less and
meet certain filing status requirements.
https://www.irs.gov/publications/p596#:~:text=You
%20can't%20claim%20the,can't%20claim%20the%2
0credit.
A taxpayer filing as Single has $25,600 of taxable
income. Included in gross income is a 1099-INT
with box 1 Interest Income of $5,000 tax exempt
of $3,000 and interest on U.S savings bonds of
$1,200. Additionally, the taxpayer has a 1099-DIV
with dividend income of $3,000 of which $2,000 is
qualified dividends and capital gains distributions
of $500.
,A taxpayer needs help identifying and $20,000 Wages
understanding their Adjusted Gross Income (AGI) $ 5,000 Capital Gains
for the tax year 2023. Filing status is Single, their $ 5,000 Pension
total income consists of the following, wages -$ 5,000 Alimony Paid Tax Deduction
$20,000, capital gains $5,000, Pension income -$ 5,500 Student Loan Interest Tax Deduction
$5,000. The taxpayer paid alimony in the amount -$ 3,000 Child Care Tax Credit
of $5,000 for a divorce decree dated 2017, $5,500 __________________________________________________
of student loan interest and $3,000 for child care. $16,800.00 Adjusted Gross Income
What is the taxpayers AGI?
Hints:
Adjusted Gross Income (AGI) is your annual gross
income minus certain adjustments that the IRS
uses to determine your income tax liability for the
year.
How to calculate AGI for tax purposes
* Determine your total income
* Subtract deductions and expenses from your
total income
,Is this item an allowable adjustment to income on Yes. Under divorce or separation instruments executed on or before
the Federal U.S 1040 for tax year 2023? December 31, 2018, alimony payments are taxable to the recipient (and
The taxpayer pays alimony under a divorce or deductible by the payer).
separation agreement executed June 15, 2016.
Hints:
https://www.irs.gov/faqs/interest-dividends-
other-types-of-income/alimony-child-support-
court-awards-damages/alimony-child-support-
court-awards-damages-1
https://turbotax.intuit.com/tax-
tips/marriage/filing-taxes-after-a-divorce-is-
alimony-taxable/L3RVrBfu7#GoTo-Alimony-
taxation
Is this item an allowable adjustment to income on No, because Roth IRA's are not deductible.
the federal US 1040 for tax year 2023?
The taxpayer has earned income of $77,690 and is
not covered by an employer's retirement plan. The
taxpayer contributed $4,700 to their Roth IRA.
Hints:
https://www.irs.gov/taxtopics/tc451#:~:text=for%20
more%20information.-,Roth%20IRAs,aren't%20subj
ect%20to%20tax.
https://www.irs.gov/retirement-plans/ira-
deduction-limits
, Is this item an allowable adjustment to income on Yes. You may deduct the lesser of $2,500 or the amount of interest you
the federal US 1040 for tax year 2023? actually paid during the year. The deduction is gradually reduced and
A single taxpayer paid $3,000 in interest on eventually eliminated by phaseout when your modified adjusted gross
student loans during the tax year. With all income (MAGI) amount reaches the annual limit for your filing status.
adjustments to income (except student loan
interest adjustment), their MAGI is below the limits.
They can deduct $2,500 of their student loan
interest as an adjustment to income.
Hints:
https://www.irs.gov/taxtopics/tc456
https://turbotax.intuit.com/tax-tips/college-and-
education/about-student-loan-tax-
credits/L0mIiywan
for the Earned Income Tax Credit for tax year less.
2023?
A taxpayer must have investment income below
$11,000.00.
Hints:
To claim the Earned Income Tax Credit (EITC), you
much have what qualifies as earned income and
meet certain adjusted gross income (AGI) and
have investment income of $11,000 or less and
meet certain filing status requirements.
https://www.irs.gov/publications/p596#:~:text=You
%20can't%20claim%20the,can't%20claim%20the%2
0credit.
A taxpayer filing as Single has $25,600 of taxable
income. Included in gross income is a 1099-INT
with box 1 Interest Income of $5,000 tax exempt
of $3,000 and interest on U.S savings bonds of
$1,200. Additionally, the taxpayer has a 1099-DIV
with dividend income of $3,000 of which $2,000 is
qualified dividends and capital gains distributions
of $500.
,A taxpayer needs help identifying and $20,000 Wages
understanding their Adjusted Gross Income (AGI) $ 5,000 Capital Gains
for the tax year 2023. Filing status is Single, their $ 5,000 Pension
total income consists of the following, wages -$ 5,000 Alimony Paid Tax Deduction
$20,000, capital gains $5,000, Pension income -$ 5,500 Student Loan Interest Tax Deduction
$5,000. The taxpayer paid alimony in the amount -$ 3,000 Child Care Tax Credit
of $5,000 for a divorce decree dated 2017, $5,500 __________________________________________________
of student loan interest and $3,000 for child care. $16,800.00 Adjusted Gross Income
What is the taxpayers AGI?
Hints:
Adjusted Gross Income (AGI) is your annual gross
income minus certain adjustments that the IRS
uses to determine your income tax liability for the
year.
How to calculate AGI for tax purposes
* Determine your total income
* Subtract deductions and expenses from your
total income
,Is this item an allowable adjustment to income on Yes. Under divorce or separation instruments executed on or before
the Federal U.S 1040 for tax year 2023? December 31, 2018, alimony payments are taxable to the recipient (and
The taxpayer pays alimony under a divorce or deductible by the payer).
separation agreement executed June 15, 2016.
Hints:
https://www.irs.gov/faqs/interest-dividends-
other-types-of-income/alimony-child-support-
court-awards-damages/alimony-child-support-
court-awards-damages-1
https://turbotax.intuit.com/tax-
tips/marriage/filing-taxes-after-a-divorce-is-
alimony-taxable/L3RVrBfu7#GoTo-Alimony-
taxation
Is this item an allowable adjustment to income on No, because Roth IRA's are not deductible.
the federal US 1040 for tax year 2023?
The taxpayer has earned income of $77,690 and is
not covered by an employer's retirement plan. The
taxpayer contributed $4,700 to their Roth IRA.
Hints:
https://www.irs.gov/taxtopics/tc451#:~:text=for%20
more%20information.-,Roth%20IRAs,aren't%20subj
ect%20to%20tax.
https://www.irs.gov/retirement-plans/ira-
deduction-limits
, Is this item an allowable adjustment to income on Yes. You may deduct the lesser of $2,500 or the amount of interest you
the federal US 1040 for tax year 2023? actually paid during the year. The deduction is gradually reduced and
A single taxpayer paid $3,000 in interest on eventually eliminated by phaseout when your modified adjusted gross
student loans during the tax year. With all income (MAGI) amount reaches the annual limit for your filing status.
adjustments to income (except student loan
interest adjustment), their MAGI is below the limits.
They can deduct $2,500 of their student loan
interest as an adjustment to income.
Hints:
https://www.irs.gov/taxtopics/tc456
https://turbotax.intuit.com/tax-tips/college-and-
education/about-student-loan-tax-
credits/L0mIiywan
