Barbara Weltman: J.K. Lasser's 1001 Deductions and Tax Breaks 2022

1 Cover

2 Title Page J.K. LASSER'S ™ 1001 DEDUCTIONS AND TAX BREAKS 2022 Your Complete Guide to Everything Deductible Barbara Weltman

3 Copyright

4 Introduction Tax‐Favored Items Limits on Qualifying for Tax‐Favored Items Standard Deduction versus Itemized Deductions Impact of Deductions on Your Chances of Being Audited How to Use This Book

5 CHAPTER 1: You and Your Family Marital Status Dependents Qualifying Child Qualifying Relative Child Tax Credit Earned Income Credit Dependent Care Expenses Adoption Costs Foster Care Child Support Alimony ABLE Accounts

6 CHAPTER 2: Medical Expenses Individual Mandate Employer‐Provided Health Insurance Premium Tax Credit Health Coverage Tax Credit Itemized Medical Expenses Self‐Employed Health Insurance Deduction Long‐Term Care Coverage Flexible Spending Accounts for Health Care Health Reimbursement Arrangements Individual Coverage HRAs Excepted Benefit HRAs QSEHRAs Health Savings Accounts Archer Medical Savings Accounts ABLE Accounts COBRA Coverage Medicare Continuing Care Facilities and Nursing Homes Accelerated Death Benefits Decedent's Final Illness Medical Insurance Rebates

7 CHAPTER 3: Education Costs FAFSA Submissions Employer‐Paid Education Assistance Scholarships, Fellowships, and Grants American Opportunity Credit Lifetime Learning Credit Work‐Related Education Student Loan Interest Interest on U.S. Savings Bonds Coverdell Education Savings Accounts Qualified Tuition Programs (529 Plans) ABLE Accounts Seminars Educational Travel Cancellation of a Student Loan Penalty‐Free Withdrawals from IRAs Government Reimbursements Internships and Apprenticeships COVID‐19‐Related Grants

8 CHAPTER 4: Your Home Mortgages Mortgage Interest Tax Credit Home Equity Loans Points Prepayment Penalties Late Payment Penalties Mortgage Insurance Reverse Mortgages Cancellation of Mortgage Debt Penalty‐Free IRA Withdrawals for Home‐Buying Expenses Real Estate Taxes Cooperative Housing Minister's Housing Allowance Home Sale Exclusion Moving Expenses for Active Duty Military Personnel Energy Improvements ABLE Accounts Disaster Rules for Casualties to Your Home COVID‐19 Emergency Assistance Home Office Deduction

9 CHAPTER 5: Retirement Savings Traditional IRAs Roth IRAs IRA Rollovers 401(k) and Similar Plans Self‐Employed Retirement Plans SEPs SIMPLEs Retirement Saver's Credit Custodial/Trustee Fees Employer‐Paid Retirement Planning Advice Charitable Transfers of IRA Distributions Qualified Longevity Annuity Contracts Hardship Distributions from Retirement Plans Special Rules for COVID‐19 and Disasters

10 CHAPTER 6: Charitable Giving Cash Donations Appreciated Property Donations Used Clothing and Car Donations Intellectual Property Donations Real Estate Donated for Conservation Purposes Bargain Sales Volunteer Expenses Tickets to Fund‐Raisers, Raffles, and Sporting Events Membership Fees to Nonprofit Organizations Student Exchange Program Donor‐Advised Funds Sophisticated Charitable Giving Arrangements IRA Transfers to Charity Leave‐Based Donation Programs Record Keeper for Your Charitable Giving

11 CHAPTER 7: Your Car Business Use of Your Personal Car Employer‐Provided Car Vehicle Registration Fees Car Accidents and Other Car‐Related Problems Donating Your Car Credit for Plug‐In Electric Drive Vehicles Car Insurance Rebates

12 CHAPTER 8: Investing Penalty on Early Withdrawal of Savings Loss on Bank Deposits Capital Losses Capital Gains and Qualified Dividends Worthless Securities Loss on Section 1244 Stock Margin Interest and Other Investment‐Related Borrowing Amortization of Bond Premium Municipal Bonds Savings Bonds Gain on the Sale of Small Business Stock Gain on DC Zone Assets Gain on Reinvestments in Opportunity Zones Foreign Taxes on Investments Exercise of Incentive Stock Options Losses from Investment Ponzi Schemes Deferral of Income in Commercial Annuities

13 CHAPTER 9: Travel Business Travel Temporary Work Assignments Conventions Medical Travel Charitable Travel Education‐Related Travel National Guard and Military Reservist Travel Frequent Flier Miles Recordkeeping for Travel Expenses

14 CHAPTER 10: Real Estate Vacation Home Home Office Timeshares Rentals Low‐Income Housing Credit Rehabilitation Credit Like‐Kind Exchanges Deduction for Energy‐Efficient Commercial Buildings Qualified Improvement Property Conservation Easements

15 CHAPTER 11: Borrowing and Interest Home Mortgage Interest Student Loan Interest Borrowing from Retirement Plans Investment‐Related Interest Business Interest Accrued Interest on Bond Purchases Below‐Market Loans Bad Debts Debt Forgiveness

16 CHAPTER 12: Insurance and Catastrophes Casualty, Theft, and Disaster Losses Economic Impact Payments Disaster Relief Payments Damages Disability Coverage Accelerated Death Benefits Legal Fees Identity Theft Losses Tax Identity Theft and Relief

17 CHAPTER 13: Your Job Educator Expenses Prizes and Awards Performing Artists State or Local Government Officials Paid on a Fee Basis Repayment of Supplemental Unemployment Benefits Jury Duty Pay Turned Over to Your Employer Impairment‐Related Expenses Military Benefits Contributions to State Benefit Programs Dependent Care Assistance Fringe Benefits Income Earned Abroad

18 CHAPTER 14: Your Business Start‐Up Costs Qualified Business Income Deduction Equipment Purchases Payment for Services Supplies Gifts Self‐Employment Tax Deduction Home Office Deduction Farming‐Related Breaks Other Business Deductions Business Credits Net Operating Losses COVID‐19 Government Assistance

19 CHAPTER 15: Miscellaneous Items State and Local Income Taxes State and Local Sales Taxes Certain Federal Taxes Tax Refunds Legal Fees Gifts You Receive Inheritances Life Insurance Proceeds Gambling Losses Estate Tax Deduction on Income in Respect of a Decedent Rebates and Discounts Government Benefits Olympic Medals Alternative Minimum Tax

20 APPENDIX A: Items Adjusted Annually for Inflation

21 APPENDIX B: Checklist of Tax‐Free Items

22 APPENDIX C: Checklist of Nondeductible Items Nondeductible Items

23 Index

24 End User License Agreement

1 IntroductionTABLE I.1 Standard Deduction Amounts for 2021

2 Chapter 1TABLE 1.1 Stage 1 Phaseout of the Child Tax Credit over MAGI Limits in 2021TABLE 1.2 Stage 2 Phaseout of Child Tax Credit over MAGI Limits in 2021TABLE 1.3 Maximum Earned Income Credit for 2021TABLE 1.4 Earned Income Needed for Top Credit in 2021TABLE 1.5 AGI Phaseout Range for the Earned Income Credit in 2021TABLE 1.6 MAGI Phaseout Range for the Adoption Credit in 2021TABLE 1.7 Year to Claim the Credit for Adoption of a U.S. Citizen or Resident Ch...TABLE 1.8 Year to Claim the Credit for Adoption of a Foreign Child

3 Chapter 2TABLE 2.1 Poverty Amounts in the Contiguous States and D.C.*TABLE 2.2 TABLE 2.3 Deductible Long‐Term Care Premiums for 2021TABLE 2.4 Health Savings Account Contribution Limits for 2021TABLE 2.5 2021 High‐Deductible Policy LimitsTABLE 2.6 2021 Limits on Deductlbles and Out‐of‐Pocket ExpensesTABLE 2.7 Part B Premiums for 2021TABLE 2.8 Part D Premiums for 2021

4 Chapter 3TABLE 3.1 2021 MAGI Phaseout Range for Education CreditsTABLE 3.2 2021 Phaseout Ranges for Student Interest DeductionTABLE 3.3 2021 Phaseout Ranges for Savings Bond Interest ExclusionTABLE 3.4 MAGI Phaseout Ranges for Coverdell ESA Contributors

5 Chapter 5TABLE 5.1 2021 MAGI Phaseout Range for Active Participants Deducting IRA Contrib...TABLE 5.2 MAGI Limits in 2021 for Retirement Saver's Credit

6 Chapter 6TABLE 6.1 Deduction for Income from Intellectual Property DonationsTABLE 6.2 Record Keeper for Your Cash Donations

7 Chapter 7TABLE 7.1 Dollar Limit on Depreciation of Passenger CarsTABLE 7.2 Sample Inclusion Amounts for Cars First Leased in 2021TABLE 7.3 States with Ad Valorem Taxes