Individual Deductions, Credits, and Filing Rules

This chapter moves from gross income to taxable income and final tax liability. The key to this material is understanding where each benefit operates in the return computation and what eligibility limits or phaseouts change the answer.

In This Chapter

• AGI Adjustments for Self-Employment, IRAs, and HSAs covers above-the-line deductions and why they matter.
• Itemized Deduction Categories and Limits explains the major below-the-line deduction categories.
• Refundable and Nonrefundable Tax Credits distinguishes liability reducers by how they are applied.
• Qualified Business Income Deduction Rules introduces the Section 199A deduction and its planning significance.
• Filing Status and Estimated Tax Payment Rules covers filing-position choices and required-payment rules.

How to Use This Chapter

• Read this chapter when the return framework is clear in theory but not in sequence.
• Focus on where each item enters the computation and what limits can disallow or reduce it.
• Revisit it when a practice question asks you to compare several taxpayer positions or filing options.

In this section

• AGI Adjustments for Self-Employment, IRAs, and HSAs
  Above-the-line deductions that reduce adjusted gross income before itemized deductions or credits.
• Itemized Deduction Categories and Limits
  Medical, tax, interest, charitable, and casualty deductions with their key thresholds and limitations.
• Refundable and Nonrefundable Tax Credits
  How individual tax credits reduce liability and when a credit can generate a refund.
• Qualified Business Income Deduction Rules
  Section 199A QBI deduction eligibility, SSTB limits, wage limits, UBIA factors, and taxable-income thresholds.
• Filing Status and Estimated Tax Payment Rules
  How filing status affects individual tax computation and when estimated-payment safe harbors apply.