EA cheat sheet

Gross income includes wages, salaries, interest, dividends, rents, royalties, unemployment compensation, and gambling winnings; gifts, inheritances, and tax-exempt interest are excluded.

Capital assets held more than one year produce long-term gain or loss; net long-term gain uses preferential rates, while net short-term gain is taxed as ordinary income.

Above-the-line deductions include traditional IRA contributions if eligible, self-employed health insurance, 50% of self-employment tax, HSA contributions, and student loan interest within limits.

A taxpayer may deduct qualified residence interest on acquisition debt up to $750,000 ($375,000 married filing separately) for debt incurred after Dec. 15, 2017; grandfathered debt has different limits.

Standard deduction amount depends on filing status, age 65 or older, and blindness; dependents have a limited standard deduction based on earned income plus a threshold.

Child tax credit is $2,000 per qualifying child under age 17, with phaseout; credit for other dependents is $500.

American Opportunity Credit is up to $2,500 per student for first four years, 40% refundable; Lifetime Learning Credit is up to $2,000 per return, nonrefundable.

QBI deduction is generally 20% of qualified business income, limited by taxable income thresholds and wage or capital limits; specified service businesses phase out at higher income.

SEP, SIMPLE, and qualified plan contributions may be deductible; traditional IRA distributions are taxable except for after-tax basis, while qualified Roth distributions are excluded.

A single-member LLC is disregarded by default; a multi-member LLC is a partnership by default; either may elect corporate or S corporation treatment under check-the-box rules.

Partnerships and S corporations generally pay no entity-level income tax; items flow through to owners, but S corporations must pay reasonable compensation to shareholder-employees.

S corporation eligibility requires a domestic corporation, no more than 100 shareholders, eligible shareholders only, and one class of stock.

C corporation taxable income is taxed at a flat 21% corporate rate; dividends paid are nondeductible and generally taxed again to shareholders.

Partner's outside basis increases by capital contributions and share of partnership liabilities and decreases by distributions and allocated losses.

MACRS depreciation uses recovery periods and conventions; Section 179 expensing and bonus depreciation allow accelerated deductions subject to limits.

FUTA is 6.0% on the first $7,000 of wages per employee, with up to 5.4% credit for timely state unemployment contributions; FICA includes Social Security and Medicare.

Business expenses must be ordinary and necessary; meals are generally 50% deductible, entertainment is nondeductible, and mixed-use expenses require allocation.

Accrual-method taxpayers generally deduct expenses when all events have occurred, economic performance has happened, and the amount is determinable with reasonable accuracy.

Circular 230 governs practitioner conduct before the IRS, including written advice standards, conflicts of interest, fees, and sanctions.

Form 2848 authorizes representation; Form 8821 authorizes disclosure of tax information but not representation.

Taxpayer Bill of Rights includes the right to be informed, quality service, pay no more than correct tax, challenge the IRS position, appeal, finality, privacy, confidentiality, retain representation, and fair appeals.

During an IRS interview, the taxpayer may be represented and may request to consult the representative; the IRS generally must suspend the interview to allow consultation.

A Collection Due Process hearing generally must be requested within 30 days after notice of lien or levy; the Appeals decision may be reviewed by the Tax Court.

Innocent spouse relief is requested on Form 8857; types are innocent spouse, separation of liability, and equitable relief.

Accuracy-related penalty is 20% for negligence or substantial understatement; civil fraud penalty is 75% of the underpayment attributable to fraud.

Failure-to-file penalty is generally 5% per month up to 25%; failure-to-pay penalty is generally 0.5% per month up to 25%.

Assessment statute is generally three years after the return is filed, six years if gross income omitted exceeds 25%, and unlimited for fraud or failure to file.

Individual income tax returns are generally due April 15; Form 4868 extends filing to October 15 but does not extend time to pay.

Estimated tax payments are due April 15, June 15, September 15, and January 15; safe harbor is 90% of current tax or 100% of prior tax, or 110% for higher-income taxpayers.

Form W-2 and Form 1099-NEC generally must be furnished by January 31; many information returns have IRS filing deadlines in January through March.

Form 8879 authorizes e-file; the taxpayer signs it, and the preparer retains it as documentation; it is not filed with the IRS.

Form 1040-X generally must be filed within three years after the original due date or two years after tax paid, whichever is later.

IRS collection notices: a notice of intent to levy triggers Collection Due Process rights; installment agreements and offers in compromise are collection alternatives.

Reasonable cause may abate penalties; first-time abatement may apply to failure-to-file, failure-to-pay, and failure-to-deposit penalties for clean-compliance taxpayers.

PTIN must be renewed annually; preparers must exercise due diligence and, for certain credits, file Form 8867.

Charitable contributions require substantiation; cash gifts under $250 need a bank record or written receipt; noncash gifts over $500 require Form 8283.