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chapter 6 Individual Deductions

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Income
Gross receipts or sales. Caution. See page C-4 and check the box if:
1
1
2 Returns and allowances 2
3 Subtract line 2 from line 1 3
4 Cost of goods sold (from line 42 on page 2) 4
5 Gross profit. Subtract line 4 from line 3 5
6 Other income, including federal and state gasoline or fuel tax credit or refund (see page C-4) 6
7 Gross income. Add lines 5 and 6 _ 7
Expenses. Enter expenses for business us e of your home only on line 30.
8
Repairs and maintenance 21
21
Advertising
8
Supplies (not included in Part III) 22
22
23
9
T axes and licenses
23
10
T ravel, meals, and entertainment:
24
Car and truck expenses (see
page C-5)
9
24a
11
T ravel
a
Commissions and fees
10
Depletion 12
12
Deductible meals and
entertainment (see page C-7)
b
Depreciation and section 179
expense deduction (not
included in Part III) (see page
C-5)
13
13
14
Employee benefit programs
(other than on line 19)
14
15 Utilities 25
25
Insurance (other than health)
15
Wages (less employment credits) 26
26
Interest:
16
Mortgage (paid to banks, etc.) 16a
a
Other expenses (from line 48 on
page 2)
27
Other 16b
b
17
Legal and professional
services
Office expense 18
18
Pension and profit-sharing plans 19
19
Rent or lease (see page C-6):
20
Vehicles, machinery, and equipment 20a
a
b
Other business property
20b
Total expenses before expenses for business use of home. Add lines 8 through 27 _
28 28
31
31
32a All investment is at risk.
32
Some investment is not
at risk.
32b
For Paperwork Reduction Act Notice, see page C-9 of the instructions. Cat. No. 11334P Schedule C (Form 1040) 2008
29
30
T entative profit or (loss). Subtract line 28 from line 7
Expenses for business use of your home. Attach Form 8829
29
30




_
Part I
Part II
27
Net profit or (loss). Subtract line 30 from line 29.
● If a profit, enter on both Form 1040, line 12, and Schedule SE, line 2, or on Form 1040NR,
line 13 (if you checked the box on line 1 as a statutory employee, see page C-7). Estates and trusts,
enter on Form 1041, line 3.
● If a los s, you must go to line 32.
If you have a loss, che ck the box that describes your investment in this activity (see page C-8).
● If you checked 32a, enter the loss on both Form 1040, line 12, and Schedule SE, line 2, or on
Form 1040NR, line 13 (if you checked the box on line 1 as a statutory employee, see the line 31
instructions on page C-7). Estates and trusts, enter on Form 1041, line 3.
● If you checked 32b, you must attach Form 6198. Yo ur loss may be limited.



_
Contract labor (see page C-5)
11
24b
17

20
● T his income was reported to you on Form W -2 and the “Statutory employee” box
on that form was checked, or
● You are a member of a qualified joint venture reporting only rental real estate
income not subject to self-employment tax. Also see page C-4 for limit on losses.




_
_




Properties Income: A B C
3 Rents received 3
4 Royalties receiv ed
4
Expenses:
Adv ertising 5
5
Auto and travel (see page E-4) 6
6
Cleaning and maintenance 7
7
Commissions 8
8
Insurance 9
9
10 Legal and other professional fees 10
11
Mortgage interest paid to banks,
etc. (see page E-5)
11
12
Other interest
12
13
Repairs
13
14
Supplies
14
15
Taxes
15
16
Utilities
16
17 17
Other (list) _
18
18
Add lines 5 through 18 19
19
Depreciation expense or depletion
(see page E-5)
20
20
Total expenses. Add lines 19 and 20 21
21
Income or (loss) from rental real
estate or royalty properties.
Subtract line 21 from line 3 (rents)
or line 4 (royalties). If the result is a
(loss), see page E-5 to find out if
you must file Form 6198
22
22
Deductible rental real estate loss.
Caution. Y our rental real estate
loss on line 22 may be limited. See
page E-5 to f ind out if you must
file Form 8582. Real estate
prof essionals must complete line
43 on page 2
23
23 ( ) ( ) ( )
24 Income. Add positive amounts shown on line 22. Do not include any losses
Losses. Add royalty losses f rom line 22 and rental real estate losses from line 23. En ter total losses here.
25
26 Total rental real estate and royalty income or (loss). Combine lines 24 and 25. Enter the result here.
If Parts II, III, IV, and line 40 on page 2 do not apply to you, also enter this amount on Form 1040,
line 17, or Form 1040NR, line 18. Otherwise, include this amount in the total on line 41 on page 2
For Paper wo rk Redu ction Act Notice, see p age E- 8 of the instru ctions. Cat. No. 11344L Sch
Management fees

20
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7
Wages, salaries, tips, etc. Attach Form(s) W -2
7
8a
8a
Taxable interest. Attach Schedule B if required
Income
8b
b
Tax-exempt interest. Do not include on line 8a
Attach Form(s)
W-2 here. Also
attach Forms
W-2G and
1099-R if tax
was withheld.
9a
9a
Ordinary div idends. Attach Schedule B if required
10
10
T axable refunds, credits, or offsets of state and local income taxes (see page 22)
11
11
Alimony received
12
12
Business income or (loss). Attach Schedule C or C-EZ
Enclose, but do
not attach, any
payment. Also,
please use
Form 1040-V.
13
13
Capital gain or (loss). Attach Schedule D if required. If not required, check here _
14
14
Other gains or (losses). Attach Form 4797
15a
15b
IRA distributions
b
T axable amount (see page 23)
15a
16b
16a
Pensions and annuities
b
T axable amount (see page 24)
16a
17
17
Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E
18
18
Farm income or (loss). Attach Schedule F
19
19
Unemployment compensation
20b
20a
b
T axable amount (see page 26)
20a
Social security benefits
21
21
22
Add the amounts in the far right column for lines 7 through 21. This is your total income _
22
25
IRA deduction (see page 30)
23
27
33
One-half of self-employment tax. Attach Schedule SE
29
Self-employed health insurance deduction (see page 29)
34
30
26
Self-employed SEP, SIMPLE, and qualified plans
31a
27
Penalty on early withdrawal of sav   ings
32
29
Alimony paid b Recipient’s SSN _
36
Add lines 23 through 31a and 32 through 35
28
Subtract line 36 from line 22. T his is your adj usted gross income _
30
Adjusted
Gross
Income
37
If you did not
get a W-2,
see page 21.
Other income. List type and amount (see page 28)
Moving expenses. Attach Form 3903
32
26
31a
34
Student loan interest deduction (see page 33)
33
36
T uition and fees deduction. Attach Form 8917
37
23
Educator expenses (see page 28)
9b
b
Qualified dividends (see page 21)
24
Certain business expenses of reservists, performing artists, and
fee-basis government officials. Attach Form 2106 or 2106-EZ
24
25
Health savings account deduction. Attach Form 8889
28
35
Domestic production activities deduction. Attach Form 8903
35
122,800
600
500
700
420
20,000
18,000
5,000
167,520
5,279
241
5,520
162,000
700
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SCHEDUL ES A&B Schedule   A—Itemized D eductions   OMB No. 1 545-0074
(Form 1040)
(Schedule B is on back)
Department of the T reasury
Internal Revenue Service
_ Attach to Form 1040.
Attachment
Sequence No. 07
Name(s) shown o n Fo rm 1040 Y our so cial securi ty n um ber
Caution. Do not include expenses reimbursed or paid by others.
Medical
and
Dental
Expenses
1
Medical and dental expenses (see page A-1)
1
2
2
3
Multiply line 2 by 7.5% (.075)
3
Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-
4
4
5
State and local (check only one box):
5
Taxes You
Paid
6
Real estate taxes (see page A-5)
6
Other taxes. List type and amount              _
8
(See
page A-2.)
8
Add lines 5 through 8
9
9
Home mortgage interest and points reported to you on Form 1098
10
Interest
You Paid
10
Home mortgage interest not reported to you on Form 1098. If paid
to the person from whom you bought the home, see page A-6
and show that person’s name, identifying no., and address _
11
(See
page A-5.)
11
12
Points not reported to you on Form 1098. See page A-6
for special rules
12
13
Investment interest. Attach Form 4952 if required. (See
page A-6.)
13
14
Add lines 10 through 14 15
Gifts to
Charity
16
15
Gifts by cash or check. If you made any gift of $250 or
more, see page A-7
17
Other than by cash or check. If any gift of $250 or more,
see page A-8. You must attach Form 8283 if over $500
16
18
Carryover from prior year
17
18
Add lines 16 through 18
19
Casualty or theft loss(es). Attach Form 4684. (See page A-8.)
19
Casualty and
Theft Losses
20
Unreimbursed employee expenses—job travel, union dues, job
education, etc. Attach Form 2106 or 2106-EZ if required. (See page
A-9.) _
20
Job Expenses
and Certain
Miscellaneous
Deductions
22
Other expenses—investment, safe deposit box, etc. List type and
amount _
(See
page A-9.)
Add lines 21 through 23
23
Enter amount from Form 1040, line 38
24
Multiply line 25 by 2% (.02)
25
Subtract line 26 from line 24. If line 26 is more than line 24, enter -0-
26
27
Other—from list on page A-10. List type and amount _
27
Other
Miscellaneous
Deductions
28
28
Total
Item ized
Deductions
29
For Paperwork Reduction Act Notice, see Form 1040 instructions. Schedule A (Form 1040) 2008
25
21
23
24
If you made a
gif t and got a
benef it f or it,
see page A-7.
26
Enter amount from Form 1040, line 38
No. Your deduction is not limited. Add the amounts in the far right column for
lines 4 through 28. Also, enter this amount on Form 1040, line 40.
Yes. Your deduction may be limited. See page A-10 for the amount to enter.
Cat. No. 11330X
_
Note.
Personal
interest is
not
deductible.



_
7
Personal property taxes
7
22
Tax preparation fees
21
Is Form 1040, line 38, over $159,950 (over $79,975 if married filing separately)?
(99)
_ See Instructions for   Schedules A&B (Form 1040).
If you elect to itemize deductions even though they are less than your standard
deduction, check here _
30
Qualified mortgage insurance premiums (see page A-6)
14
29

2008
a
Income taxes, or
b
General sales taxes

_
COURTNEY WILSON
2,400
12,150
0
✔ 6,700
3,550
10,250
15,800
130
15,930
1,770
10,760
12,530
3,663
250
SUBSCRIPTIONS TO BUSINESS PUBLICATIONS 410
4,323
3,240
1,083
✔
39,793
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Itemized deductions (from Schedule A) or your standard deduction (see left margin)
Form 1040 (2008 ) Page   2
Amount f rom line 37 (adjusted gross income)
38 38
Check
if :
39a
Tax
and
Credits
39a
If your spouse itemizes on a separate return or you were a dual-status alien, see page 34 and check here _
b 39b
40 40
Subtract line 40 from line 38 41
41
42
If line 38 is over $119,975, or you provided housing to a Midwestern displaced individual, see
page 36. Otherwise, multiply $3,500 by the total number of exemptions claimed on line 6d
42
43 Taxable income. Subtract line 42 from line 41. If line 42 is more than line 41, enter -0- 43
You were born bef ore January 2, 1944,
Blind.
Spouse was born before January 2, 1944,
Blind.
Standard
Deduction
for—
● People who
chec ked any
box on line
39a, 39b, or
39c or who
can be
Total boxes
checked _

__
Check if standard deduction includes real estate taxes or disaster loss (see page 34) _
c 39c
162,000
0
39,793
122,207
10,950
111,257




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