J.K. Lasser's Your Income Tax 2024, Professional Edition

Cover
Title Page
Copyright Page
Contents
What’s New for 2023
Tax News for 2023
Key Tax Numbers for 2023
Tax-Saving Opportunities for 2023 and Beyond
Expiring Provisions
Part 1 Filing Basics
	Do You Have to File a 2023 Tax Return?
	Filing Tests for Dependents: 2023 Returns
	Where to File Your 2023 Form 1040 or 1040-SR
	What Forms Do You Need to File?
	Chapter 1 Filing Status
		1.1 Which Filing Status Should You Use?
		1.2 Tax Rates Based on Filing Status
		1.3 Filing Separately Instead of Jointly
		1.4 Filing a Joint Return
		1.5 Nonresident Alien Spouse
		1.6 Community Property Rules
		1.7 Innocent Spouse Rules
		1.8 Separate Liability Relief for Former Spouses
		1.9 Equitable Relief
		1.10 Death of Your Spouse in 2023
		1.11 Qualifying Widow/Widower Status for 2023 If Your Spouse Died in 2022 or 2021
		1.12 Qualifying as Head of Household
		1.13 Filing for Your Child
		1.14 Return for Deceased
		1.15 Return for an Incompetent Person
		1.16 How a Nonresident Alien Is Taxed
		1.17 How a Resident Alien Is Taxed
		1.18 Who Is a Resident Alien?
		1.19 Certificate of Tax Compliance for Alien Leaving the United States
		1.20 Expatriation Tax
Part 2 Reporting Your Income
	Chapter 2 Wages, Salary, and Other Compensation
		2.1 Salary and Wage Income
		2.2 Constructive Receipt of Year-End Paychecks
		2.3 Pay Received in Property Is Taxed
		2.4 Commissions Taxable When Credited
		2.5 Unemployment Benefits
		2.6 Strike Pay Benefits and Penalties
		2.7 Nonqualified Deferred Compensation
		2.8 Did You Return Wages Received in a Prior Year?
		2.9 Waiver of Executor’s and Trustee’s Commissions
		2.10 Life Insurance Benefits
		2.11 Educational Benefits for Employees’ Children
		2.12 Sick Pay Is Taxable
		2.13 Workers’ Compensation Is Tax Free
		2.14 Disability Pay and Pensions
		2.15 Stock Appreciation Rights (SARs)
		2.16 Stock Options
		2.17 Election to Defer Income on Qualified Equity Grants from Private Companies (Section 83(i) election)
		2.18 Restricted Stock
	Chapter 3 Fringe Benefits
		3.1 Tax-Free Health and Accident Coverage Under Employer Plans
		3.2 Health Savings Accounts (HSAs) and Archer MSAs
			Health Savings Account (HSA)
			Archer MSAs
		3.3 Reimbursements and Other Tax-Free Payments From Employer Health and Accident Plans
			Tax-Free Reimbursements for Medical Expenses
			Tax-Free Payments for Permanent Physical Injuries
			HSA or Archer MSA Payments
		3.4 Group-Term Life Insurance Premiums
		3.5 Dependent Care Assistance
		3.6 Adoption Benefits
		3.7 Education Assistance Plans
		3.8 Company Cars, Parking, and Transit Passes
			Qualified Transportation Benefits
		3.9 Working Condition Fringe Benefits
		3.10 De Minimis Fringe Benefits
		3.11 Employer-Provided Retirement Advice
		3.12 Employee Achievement Awards
		3.13 Employer-Furnished Meals or Lodging
		3.14 Minister’s Housing or Housing Allowance
		3.15 Cafeteria Plans Provide Choice of Benefits
		3.16 Flexible Spending Arrangements
		3.17 Company Services Provided at No Additional Cost
		3.18 Discounts on Company Products or Services
	Chapter 4 Dividend and Interest Income
		4.1 Reporting Dividends and Mutual Fund Distributions
		4.2 Qualified Corporate Dividends Taxed at Favorable Capital Gain Rates
		4.3 Dividends From a Partnership, S Corporation, Estate, or Trust
		4.4 Real Estate Investment Trust (REIT) Dividends
		4.5 Taxable Dividends of Earnings and Profits
		4.6 Stock Dividends on Common Stock
		4.7 Dividends Paid in Property
		4.8 Taxable Stock Dividends
		4.9 Who Reports the Dividends
		4.10 Year Dividends Are Reported
		4.11 Distribution Not Out of Earnings: Return of Capital
		4.12 Reporting Interest on Your Tax Return
		4.13 Interest on Frozen Accounts Not Taxed
		4.14 Interest Income on Debts Owed to You
		4.15 Reporting Interest on Bonds Bought or Sold
		4.16 Forfeiture of Interest on Premature Withdrawals
		4.17 Amortization of Bond Premium
		4.18 Discount on Bonds
		4.19 Reporting Original Issue Discount on Your Return
		4.20 Reporting Income on Market Discount Bonds
		4.21 Discount on Short-Term Obligations
		4.22 Stripped Coupon Bonds and Stock
		4.23 Sale or Retirement of Bonds and Notes
		4.24 State and City Interest Generally Tax Exempt
		4.25 Taxable State and City Interest
		4.26 Tax-Exempt Bonds Bought at a Discount
		4.27 Treasury Bills, Notes, and Bonds
		4.28 Interest on United States Savings Bonds
		4.29 Deferring United States Savings Bond Interest
		4.30 Minimum Interest Rules
		4.31 Interest-Free or Below-Market-Interest Loans
			Certain Loans Are Exempt From Imputed Interest Rules
		4.32 Minimum Interest on Seller-Financed Sales
	Chapter 5 Reporting Property Sales
		5.1 General Tax Rules for Property Sales
		5.2 How Property Sales Are Classified and Taxed
		5.3 Capital Gains Rates and Holding Periods
			Reduced Rates on Net Capital Gain
			Do your qualified dividends and net capital gain fall within the 0% rate bracket?
		5.4 Capital Losses and Carryovers
		5.5 Capital Losses of Married Couples
		5.6 Losses May Be Disallowed on Sales to Related Persons
		5.7 Special Treatment of Gain on Sale of Small Business Stock or Qualified Opportunity Zone Investment
			Section 1202 Exclusion on Sale of Small Business Stock
			Deferral of Gain Reinvested in a Qualified Opportunity Fund (QOF)
		5.8 Reporting Capital Asset Sales on Form 8949 and on Schedule D
		5.9 Counting the Months in Your Holding Period
		5.10 Holding Period for Securities
		5.11 Holding Period for Real Estate
		5.12 Holding Period: Gifts, Inheritances, and Other Property
		5.13 Calculating Gain or Loss
		5.14 Amount Realized Is the Total Selling Price
		5.15 Finding Your Cost
		5.16 Unadjusted Basis of Your Property
		5.17 Basis of Property You Inherited or Received as a Gift
			Basis of Property Received as Gift
			Basis of Inherited Property
		5.18 Joint Tenancy Basis Rules for Surviving Tenants
		5.19 Allocating Cost Among Several Assets
		5.20 How To Find Adjusted Basis
		5.21 Tax Advantage of Installment Sales
		5.22 Figuring the Taxable Part of Installment Payments
		5.23 Electing Not To Report on the Installment Method
		5.24 Restriction on Installment Sales to Relatives
		5.25 Contingent Payment Sales
		5.26 Using Escrow and Other Security Arrangements
		5.27 Minimum Interest on Deferred Payment Sales
		5.28 Dispositions of Installment Notes
		5.29 Repossession of Personal Property Sold on Installment
		5.30 Boot in Like-Kind Exchange Payable in Installments
		5.31 “Interest” Taxed if Sales Price Exceeds $150,000 With Over $5 Million Debt
		5.32 Worthless Securities
		5.33 Tax Consequences of Bad Debts
		5.34 Four Rules To Prove a Bad Debt Deduction
		5.35 Family Bad Debts
	Chapter 6 Tax-Free Exchanges of Property
		6.1 Like-Kind Exchanges of Real Property Used for Investment or Business
		6.2 Receipt of Cash and Other Property—“Boot”
		6.3 Time Limits and Security Arrangements for Deferred Exchanges
		6.4 Qualified Exchange Accommodation Arrangements (QEAAs) for Reverse Exchanges
		6.5 Exchanges Between Related Parties
		6.6 Property Transfers Between Spouses and Ex-Spouses
		6.7 Tax-Free Exchanges of Stock in Same Corporation
		6.8 Joint Ownership Interests
		6.9 Setting up Closely Held Corporations
		6.10 Tax-Free Exchanges of Insurance Policies
	Chapter 7 Retirement and Annuity Income
		7.1 Retirement Distributions on Form 1099-R
		7.2 Lump-Sum Distributions
		7.3 Lump-Sum Options If You Were Born Before January 2, 1936
		7.4 Lump-Sum Payments Received by Beneficiary
		7.5 Tax-Free Rollovers From Qualified Plans
		7.6 Direct Rollover or Personal Rollover
			Direct Rollover From Employer Plan
			Personal Rollover After Receiving a Distribution
			Rollover by Beneficiary
		7.7 Rollover of Proceeds From Sale of Property
		7.8 Distribution of Employer Stock or Other Securities
		7.9 Survivor Annuity for Spouse
		7.10 Court Distributions to Former Spouse Under a QDRO
		7.11 When You Must Begin Receiving Required Minimum Distributions (RMDs)
		7.12 Payouts to Beneficiaries
		7.13 Penalty for Distributions Before Age 59½
		7.14 Restrictions on Loans From Company Plans
		7.15 Tax Benefits of 401(k) Plans
		7.16 Limit on Salary-Reduction Deferrals
		7.17 Withdrawals From 401(k) Plans Restricted
		7.18 Designated Roth Account Within 401(k), 403(b), or Governmental 457 Plans
		7.19 403(b) Plans (Tax-Sheltered Annuity Plans) for Employees of Tax-Exempts and Schools and Ministers
		7.20 Government and Exempt Organization Deferred Pay Plans
		7.21 Figuring the Taxable Part of Commercial Annuities
			Taxable Portion of Commercial Annuity Payments
			Penalty on Premature Withdrawals From Deferred Annuities
		7.22 Life Expectancy Tables for Figuring Expected Return for Commercial Annuities
		7.23 When You Convert Your Endowment Policy
		7.24 Reporting Employee Annuities
		7.25 Simplified Method for Calculating Taxable Employee Annuity
		7.26 Withdrawals From Employer’s Qualified Retirement Plan Before Annuity Starting Date
	Chapter 8 IRAs
		8.1 Starting a Traditional IRA
		8.2 Contribution Limit for Traditional IRAs
		8.3 Contributions to a Traditional IRA If You Are Married
		8.4 Restrictions on Traditional IRA Deduction for Active Participants in Employer Plans
			Figuring Your 2023 IRA Deduction Under the Phaseout Rules
		8.5 Active Participation in an Employer Plan
		8.6 Nondeductible Contributions to Traditional IRAs
		8.7 Penalty for Excess Contributions to Traditional IRAs
		8.8 Distributions From Traditional IRAs
			Qualified Charitable Distribution by IRA Owner Age 70½ or Older
		8.9 Partially Tax-Free Traditional IRA Distributions Allocable to Nondeductible Contributions
		8.10 Tax-Free Direct Transfer or Rollover From One Traditional IRA to Another
			Only One IRA Rollover is Allowed Within Any 12-Month Period
		8.11 Transfer of Traditional IRA to Spouse at Divorce
		8.12 Penalty for Traditional IRA Withdrawals Before Age 59½
			Substantially Equal Periodic Payments Avoid 10% Penalty
		8.13 Required Minimum Distributions (RMDs) From a Traditional IRA
			Figuring Your Required Minimum Distribution (RMD)
		8.14 Beneficiaries of Traditional IRA Owners Who Died Before 2020
		8.15 Beneficiaries of Traditional IRA Owners Who Die After 2019
		8.16 SEP Basics
		8.17 Salary-Reduction SEP Set Up Before 1997
		8.18 Who Is Eligible for a SIMPLE IRA?
		8.19 SIMPLE IRA Contributions and Distributions
		8.20 Roth IRA Advantages
		8.21 Annual Contributions to a Roth IRA
			Phaseout of Roth IRA Contribution Limit for 2023
		8.22 Recharacterizing a Traditional IRA Contribution to a Roth IRA and Vice Versa
		8.23 Converting a Traditional IRA to a Roth IRA
		8.24 Conversions Made After 2017 to a Roth IRA Cannot Be Recharacterized
		8.25 Distributions From a Roth IRA
		8.26 Distributions to Roth IRA Beneficiaries
	Chapter 9 Income From Real Estate Rentals and Royalties
		9.1 Reporting Rental Real Estate Income and Expenses
		9.2 Checklist of Rental Deductions
		9.3 Distinguishing Between a Repair and an Improvement
		9.4 Reporting Rents From a Multi-Unit Residence
		9.5 Depreciation on Converting a Home to Rental Property
		9.6 Renting a Residence to a Relative
		9.7 Personal Use and Rental of a Residence During the Year
		9.8 Counting Personal-Use Days and Rental Days for a Residence
		9.9 Allocating Expenses of a Residence to Rental Days
		9.10 IRS May Challenge Loss Claimed on Temporary Rental of Residence Before Sale
		9.11 Reporting Royalty Income
			Examples of Royalty Income
		9.12 Production Costs of Books and Creative Properties
		9.13 Deducting the Cost of Patents or Copyrights
		9.14 Intangible Drilling Costs
		9.15 Depletion Deduction
		9.16 Oil and Gas Percentage Depletion
		9.17 Qualified Business Income Deduction for Real Estate Activities
	Chapter 10 Loss Restrictions: Passive Activities and At-Risk Limits
		10.1 Rental Activities Generally Treated as Passive
		10.2 Rental Real Estate Loss Allowance of up to $25,000
		10.3 Real Estate Professionals
		10.4 Business Participation May Avoid Passive Loss Restrictions
		10.5 Classifying Business Activities as One or Several
		10.6 Material Participation in a Business
			IRS Tests for Material Participation
		10.7 Tax Credits of Passive Activities Limited
		10.8 Determining Passive or Nonpassive Income and Loss
		10.9 Passive Income Recharacterized as Nonpassive Income
		10.10 Working Interests in Oil and Gas Wells
		10.11 Partners and Members of LLCs and LLPs
		10.12 Form 8582 and Other Tax Forms
		10.13 Suspended Losses Allowed on Disposition of Your Interest
		10.14 Suspended Tax Credits
		10.15 Personal Service and Closely Held Corporations
		10.16 Sales of Property and Passive Activity Interests
		10.17 At-Risk Limits
		10.18 What Is At Risk?
		10.19 Amounts Not At Risk
		10.20 At-Risk Investment in Several Activities
		10.21 Carryover of Disallowed Losses
		10.22 Recapture of Losses Where At Risk Is Less Than Zero
	Chapter 11 Other Income
		11.1 Prizes and Awards
		11.2 Lottery and Sweepstake Winnings
		11.3 Gambling Winnings and Losses
		11.4 Gifts and Inheritances
		11.5 Refunds of State and Local Tax Deductions
		11.6 Other Recovered Deductions
		11.7 How Legal Damages Are Taxed
		11.8 Cancellation of Debts You Owe
		11.9 Schedule K-1
		11.10 How Partners Report Partnership Profit and Loss
		11.11 When a Partner Reports Income or Loss
		11.12 Partnership Loss Limitations
		11.13 Tax Audits of Partnerships
		11.14 Stockholder Reporting of S Corporation Income or Loss
		11.15 How Beneficiaries Report Estate or Trust Income
		11.16 Reporting Income in Respect of a Decedent (IRD)
		11.17 Deduction for Estate Tax Attributable to IRD
		11.18 How Life Insurance Proceeds Are Taxed to a Beneficiary
		11.19 A Policy with a Family Income Rider
		11.20 Selling or Surrendering Life Insurance Policy
		11.21 Jury Duty Fees
		11.22 Foster Care Payments
		11.23 Virtual Currency
Part 3 Claiming Deductions
	Chapter 12 Deductions Allowed in Figuring Adjusted Gross Income
		12.1 Determining Adjusted Gross Income (AGI)
		12.2 Claiming Deductions from Gross Income
		12.3 Moving Costs Are Deductible Only by Qualifying Members of the U.S. Armed Forces
	Chapter 13 Claiming the Standard Deduction or Itemized Deductions
		13.1 Does Your Standard Deduction for 2023 Exceed Your Itemized Deductions?
		13.2 Basic Standard Deduction
		13.3 Spouses Filing Separate Returns
		13.4 Standard Deduction If 65 or Older or Blind
		13.5 Standard Deduction for Dependents
		13.6 Prepaying or Postponing Itemized Expenses
		13.7 Itemized Deductions No Longer Reduced for Higher-Income Taxpayers
	Chapter 14 Charitable Contribution Deductions
		14.1 Deductible Contributions
			Organizations Qualifying for Deductible Donations
		14.2 Nondeductible Contributions
		14.3 Contributions That Provide You With Benefits
			Token Items/Membership Benefits That Do Not Reduce Your Deduction
		14.4 Unreimbursed Expenses of Volunteer Workers
		14.5 Support of a Student in Your Home
		14.6 What Kind of Property Are You Donating?
		14.7 Cars, Clothing, and Other Property Valued Below Cost
		14.8 Bargain Sales of Appreciated Property
		14.9 Art Objects
		14.10 Interests in Real Estate
		14.11 Life Insurance
		14.12 Business Inventory
		14.13 Donations Through Trusts
		14.14 Records Needed To Substantiate Your Contributions
		14.15 Form 8283 and Written Appraisal Requirements for Property Donations
		14.16 Penalty for Substantial Overvaluation of Property
		14.17 Ceiling on Charitable Contributions
			Contributions to 50% Limit Organizations
			Contributions to Non–50% Limit Organizations
			Applying the Deduction Ceilings
		14.18 Carryover for Excess Donations
		14.19 Election To Reduce Fair Market Value by Appreciation
	Chapter 15 Itemized Deduction for Interest Expenses
		15.1 Deduction for Home Mortgage Interest
		15.2 Home Acquisition Loans
		15.3 Home Equity Loans
		15.4 Home Construction Loans
		15.5 Mortgage Insurance Premiums and Other Payment Rules
		15.6 Interest on Refinanced Loans
			Points Paid on Refinancing
		15.7 “Points”
			Deduction for Points on Purchase or Improvement of Principal Residence
		15.8 Cooperative and Condominium Apartments
		15.9 Investment Interest Limitations
			Computing the Deduction
		15.10 Debts To Carry Tax-Exempt Obligations
		15.11 Earmarking Use of Loan Proceeds For Investment or Business
		15.12 Year To Claim an Interest Deduction
		15.13 Prepaid Interest
	Chapter 16 Deductions for Taxes
		16.1 Overall Limit on Deduction for State and Local Taxes
		16.2 Nondeductible Taxes
		16.3 State and Local Income Taxes or General Sales Taxes
		16.4 Deducting Real Estate Taxes
		16.5 Assessments
		16.6 Tenants’ Payment of Taxes
		16.7 Allocating Taxes When You Sell or Buy Realty
		16.8 Automobile License Fees
		16.9 Taxes Deductible as Business Expenses
		16.10 Foreign Taxes
	Chapter 17 Medical and Dental Expense Deductions
		17.1 Medical and Dental Expenses Must Exceed AGI Threshold
		17.2 Allowable Medical and Dental Care Costs
		17.3 Nondeductible Medical Expenses
		17.4 Reimbursements Reduce Deductible Expenses
		17.5 Expenses of Your Spouse
		17.6 Expenses of Your Dependents
		17.7 Decedent’s Medical Expenses
		17.8 Premiums for Health Insurance
		17.9 Travel Costs May Be Medical Deductions
			Deductible Transportation Costs
			Nondeductible Transportation Costs
		17.10 Schooling for the Mentally or Physically Disabled
		17.11 Nursing Homes
		17.12 Nurses’ Wages
		17.13 Home Improvements as Medical Expenses
		17.14 Costs Deductible as Business Expenses
		17.15 Long-Term Care Premiums and Services
		17.16 Life Insurance Used by Chronically ill or Terminally ill Person
	Chapter 18 Casualty and Theft Losses and Involuntary Conversions
		18.1 Casualty or Theft Losses for Personal-Use Property Must Be Due to a Federally Declared Disaster
		18.2 When To Deduct a Casualty or Theft Loss
		18.3 Prior-Year Election for Disaster Losses
		18.4 Gain Realized From Insurance Proceeds for Damaged or Destroyed Principal Residence
		18.5 Who May Deduct a Casualty or Theft Loss
		18.6 Proving a Casualty Loss
		18.7 Theft Losses
		18.8 Floors for Personal-Use Property Losses
		18.9 Figuring Your Loss on Form 4684
		18.10 Personal and Business Use of Property
		18.11 Repairs May Be a “Measure of Loss”
		18.12 Excess Living Costs Paid by Insurance Are Not Taxable
		18.13 Do Your Casualty or Theft Losses Exceed Your Income?
		18.14 Defer Gain from Involuntary Conversion by Replacing Property
		18.15 Involuntary Conversions Qualifying for Tax Deferral
		18.16 How to Elect to Defer Gain
		18.17 Types of Qualifying Replacement Property
		18.18 Time Period for Buying Replacement Property
		18.19 Cost of Replacement Property Determines Postponed Gain
		18.20 Special Assessments and Severance Damages from Condemnation
	Chapter 19 Other Itemized Deductions
		19.1 Only a Few Expenses Are Allowed as “Other” Itemized Deductions
		19.2 Deductions for Job Costs and Other Miscellaneous Expenses No Longer Allowed
	Chapter 20 Travel and Meal Expense Deductions
		20.1 Who May Deduct Travel and Transportation Expenses
		20.2 Commuting Expenses
		20.3 Overnight-Sleep Test Limits Deduction of Meal Costs
		20.4 IRS Meal Allowance
		20.5 Business Trip Deductions
		20.6 When Are You Away From Home?
		20.7 Tax Home of Married Couple Working in Different Cities
		20.8 Deducting Living Costs on Temporary Assignment
		20.9 Business-Vacation Trips Within the United States
		20.10 Business-Vacation Trips Outside the United States
		20.11 Deducting Expenses of Business Conventions
		20.12 Restrictions on Foreign Conventions and Cruises
		20.13 Entertainment Expenses Generally Not Deductible
		20.14 Business Meals Are Generally Deductible
		20.15 Limitation on Some Deductible Meals
		20.16 Substantiating Travel Expenses
			Excuses for Inadequate Records
		20.17 Employee Reporting of Unreimbursed Expenses
		20.18 Are You Reimbursed Under an Accountable Plan?
		20.19 Per Diem Travel Allowance Under Accountable Plans
		20.20 Automobile Mileage Allowance
		20.21 Reimbursements Under Non-Accountable Plans
Part 4 Personal Tax Computations
	Chapter 21 Dependents
		21.1 No Exemption Deductions Are Allowed
		21.2 How Many Dependents Do You Have?
		21.3 Qualifying Children
		21.4 Qualifying Relatives
		21.5 Meeting the Support Test for a Qualifying Relative
			Checklist of Support Items
			Checklist of Items Not Counted as Support of Dependent
			Allocating Support
		21.6 Multiple Support Agreements
		21.7 Special Rule for Divorced or Separated Parents
		21.8 Reporting Social Security Numbers of Dependents
	Chapter 22 Figuring Your Regular Income Tax Liability
		22.1 Taxable Income and Regular Income Tax Liability
		22.2 Using the Tax Table
		22.3 Tax Computation Worksheet
		22.4 Tax Calculation If You Have Net Capital Gain or Qualified Dividends
		22.5 Foreign Earned Income Tax Worksheet
		22.6 Income Averaging for Farmers and Fishermen
		22.7 Tax Credits
		22.8 Additional Medicare Tax and Net Investment Income Tax
	Chapter 23 Alternative Minimum Tax (AMT)
		23.1 Computing Alternative Minimum Tax on Form 6251
		23.2 Adjustments and Preferences for AMT
		23.3 Tax Credits Allowed Against AMT
		23.4 Regular Tax Credit for Prior-Year AMT
		23.5 Avoiding AMT
	Chapter 24 Computing the “Kiddie Tax” on Your Child’s Unearned Income
		24.1 Filing Your Child’s Return
		24.2 Children Subject to “Kiddie Tax” for 2023
		24.3 Computing “Kiddie Tax” on Child’s Return
		24.4 Parent’s Election To Report Child’s Dividends and Interest
	Chapter 25 Personal Tax Credits Reduce Your Tax Liability
		25.1 Overview of Personal Tax Credits
		25.2 Child Tax Credit for Children Under Age 17
		25.3 Figuring the Child Tax Credit and Additional Child Tax Credit
		25.4 Credit for Other Dependents
		25.5 Qualifying for the Child and Dependent Care Credit
			Who is a Qualifying Person for Credit Purposes?
		25.6 Figuring the Child and Dependent Care Credit
			Limits on Eligible Expenses
			Credit percentage
		25.7 Qualifying Tests for EIC
			Claiming the EIC for 2023 if You Have One or More Qualifying Children
			Claiming the Childless EIC for 2023 if You Have No Qualifying Children
		25.8 Income Tests for Earned Income Credit (EIC)
		25.9 Qualifying for the Adoption Credit
		25.10 Claiming the Adoption Credit on Form 8839
		25.11 Eligibility for the Saver’s Credit
		25.12 Figuring the Saver’s Credit
		25.13 Premium Tax Credit
		25.14 Mortgage Interest Credit
		25.15 Residential Energy Credits
		25.16 Clean Vehicle Credits
		25.17 Repayment of the First-Time Homebuyer Credit
	Chapter 26 Tax Withholdings
		26.1 Withholdings Should Cover Estimated Tax
		26.2 Income Taxes Withheld on Wages
			Income Taxes Are Withheld on:
			Income Taxes Are Not Withheld on:
		26.3 Low Earners May Be Exempt From Withholding
		26.4 Are You Withholding the Right Amount?
		26.5 Voluntary Withholding on Government Payments
		26.6 When Tips Are Subject to Withholding
		26.7 Withholding on Gambling Winnings
		26.8 FICA Withholdings
		26.9 Withholding on Distributions from Retirement Plans and Commercial Annuities
		26.10 Backup Withholding
	Chapter 27 Estimated Tax Payments
		27.1 Do You Owe an Estimated Tax Penalty for 2023?
		27.2 Planning Estimated Tax Payments for 2024
		27.3 Dates for Paying Estimated Tax Installments for 2024
		27.4 Estimates by Married Taxpayers
		27.5 Adjusting Your Payments During the Year
	Chapter 28 Additional Medicare Tax and Net Investment Income Tax
		28.1 Higher-Income Taxpayers May be Subject to Additional Taxes
		28.2 Additional 0.9% Medicare Tax on Earnings
		28.3 Additional 3.8% Tax on Net Investment Income
Part 5 Tax Planning
	Chapter 29 Tax Savings for Residence Sales
		29.1 Avoiding Tax on Sale of Principal Residence
		29.2 Meeting the Ownership and Use Tests for Exclusion
		29.3 Home Sales by Married Persons
		29.4 Reduced Maximum Exclusion
		29.5 Figuring Gain or Loss
		29.6 Figuring Adjusted Basis
		29.7 Personal and Business Use of a Home
		29.8 No Loss Allowed on Personal Residence
		29.9 Loss on Residence Converted to Rental Property
		29.10 Loss on Residence Acquired by Gift or Inheritance
	Chapter 30 Tax Rules for Investors in Securities
		30.1 Planning Year-End Securities Transactions
		30.2 Earmarking Stock Lots
		30.3 Sale of Stock Dividends
		30.4 Stock Rights
		30.5 Short Sales of Stock
		30.6 Wash Sales
		30.7 Convertible Stocks and Bonds
		30.8 Stock Options
		30.9 Sophisticated Financial Transactions
		30.10 Investing in Tax-Exempts
		30.11 Ordinary Loss for Small Business Stock (Section 1244)
		30.12 Series EE Bonds
		30.13 I Bonds
		30.14 Trader, Dealer, or Investor?
		30.15 Mark-to-Market Election for Traders
		30.16 Cryptocurrency Transactions
	Chapter 31 Tax Savings for Investors in Real Estate
		31.1 Real Estate Ventures
		31.2 Sales of Subdivided Land—Dealer or Investor?
		31.3 Exchanging Real Estate Without Tax
		31.4 Timing Your Real Property Sales
		31.5 Cancellation of a Lease
		31.6 Sale of an Option
		31.7 Granting of an Easement
		31.8 Special Tax Credits for Real Estate Investments
		31.9 Foreclosures, Repossessions, Short Sales, and Voluntary Conveyances to Creditors
		31.10 Restructuring Mortgage Debt
		31.11 Abandonments
		31.12 Seller’s Repossession After Buyer’s Default on Mortgage
		31.13 Foreclosure on Mortgages Other Than Purchase Money
		31.14 Foreclosure Sale to Third Party
		31.15 Transferring Mortgaged Realty
		31.16 QBI Deduction for REIT Dividends
	Chapter 32 Tax Rules for Investors in Mutual Funds
		32.1 Timing of Your Investment Can Affect Your Taxes
		32.2 Reinvestment Plans
		32.3 Mutual Fund Distributions Reported on Form 1099-DIV
		32.4 Tax-Exempt Bond Funds
		32.5 Fund Expenses
		32.6 Tax Credits From Mutual Funds
		32.7 How to Report Mutual Fund Distributions
		32.8 Redemptions and Exchanges of Fund Shares
		32.9 Basis of Redeemed Shares
		32.10 Comparison of Basis Methods
		32.11 Mutual Funds Compared to Exchange-Traded Funds
	Chapter 33 Educational Tax Benefits
		33.1 Scholarships and Grants
		33.2 Tuition Reductions for College Employees
		33.3 How Fulbright Awards Are Taxed
		33.4 United States Savings Bond Tuition Plans
		33.5 Contributing to a Qualified Tuition Program (Section 529 Plan)
		33.6 Distributions From Qualified Tuition Programs (Section 529 Plans)
		33.7 Education Tax Credits
			Rules Applicable to Both the American opportunity tax credit and Lifetime learning credit
		33.8 American opportunity tax credit
		33.9 Lifetime learning credit
		33.10 Contributing to a Coverdell Education Savings Account (ESA)
		33.11 Distributions From Coverdell ESAs
		33.12 Tuition and Fees Deduction No Longer Allowed
		33.13 Student Loan Interest Deduction
		33.14 Types of Deductible Education Costs Related to Work
		33.15 Work-Related Tests for Education Costs
		33.16 Local Transportation and Travel Away From Home To Take Courses
	Chapter 34 Special Tax Rules for Senior Citizens and the Disabled
		34.1 Senior Citizens Get Certain Filing Breaks
		34.2 Social Security Benefits Subject to Tax
		34.3 Computing Taxable Social Security Benefits
			Overview of rules for taxation of Social Security benefits
		34.4 Election for Lump-Sum Social Security Benefit Payment
		34.5 Retiring on Social Security Benefits
		34.6 How Tax on Social Security Reduces Your Earnings
		34.7 Eligibility for the Credit for the Elderly or the Disabled
		34.8 Figuring the Credit for the Elderly or Disabled
		34.9 Tax Effects of Moving to a Continuing Care Facility
		34.10 Medicare Part B and Part D Premiums for 2023
		34.11 Special Tax Rules for Individuals with a Disability
		34.12 ABLE Accounts
	Chapter 35 Members of the Armed Forces
		35.1 Taxable Armed Forces Pay and Benefits
		35.2 Tax Breaks for Armed Forces Members
		35.3 Deductions for Armed Forces Personnel
		35.4 Tax-Free Pay for Service in Combat Zone
		35.5 Tax Deadlines Extended for Combat Zone or Contingency Operation Service
		35.6 Tax Forgiveness for Combat Zone or Terrorist or Military Action Deaths
		35.7 Extension To Pay Your Tax When Entering the Service
		35.8 Tax Information for Reservists
	Chapter 36 How To Treat Foreign Earned Income
		36.1 Claiming the Foreign Earned Income Exclusion
		36.2 What Is Foreign Earned Income?
		36.3 Qualifying for the Foreign Earned Income Exclusion
		36.4 How To Treat Housing Costs
		36.5 Meeting the Foreign Residence or Physical Presence Test
		36.6 Claiming Deductions
		36.7 Exclusion Not Established When Your Return Is Due
		36.8 Tax-Free Meals and Lodging for Workers in Camps
		36.9 U. S. Virgin Islands, Samoa, Guam, and Northern Marianas
		36.10 Earnings in Puerto Rico
		36.11 Tax Treaties With Foreign Countries
		36.12 Exchange Rates and Blocked Currency
		36.13 Foreign Tax Credit or Deduction for Foreign Taxes Paid
	Chapter 37 Planning Alimony and Marital Settlements
		37.1 Rules for Post-2018 Divorce and Separation Agreements
		37.2 Rules for Pre-2019 Divorces or Separation Agreements
		37.3 Decree or Agreement Required
		37.4 Cash Payments Required
		37.5 Payments Must Stop at Death
		37.6 Child Support Payments Are Not Alimony
		37.7 No Minimum Payment Period for Alimony
	Chapter 38 Other Taxes
		38.1 Overview of Household Employment Taxes
		38.2 Social Security and Medicare (FICA) Taxes for Household Employees
		38.3 Filing Schedule H To Report Household Employment Taxes
		38.4 Federal Unemployment Taxes (FUTA) for Household Employees
	Chapter 39 Gift and Estate Tax Planning Basics
		39.1 Gifts of Appreciated Property
		39.2 Gift Tax Basics
		39.3 Filing a Gift Tax Return
		39.4 Gift Tax Credit
		39.5 Custodial Accounts for Minors
		39.6 Trusts in Family Planning
		39.7 What is the Estate Tax?
		39.8 Take Inventory and Estimate the Value of Your Potential Estate
		39.9 Estate Tax for 2023
		39.10 Planning for a Potential Estate Tax
Part 6 Business Tax Planning
	Chapter 40 Income or Loss From Your Business or Profession
		40.1 Forms of Doing Business
		40.2 Reporting Self-Employed Income
		40.3 Accounting Methods for Reporting Business Income
		40.4 Tax Reporting Year for Self-Employed
		40.5 Reporting Certain Payments and Receipts to the IRS
		40.6 Filing Schedule C
		40.7 Deductions for Professionals
		40.8 Nondeductible Expense Items
		40.9 How Authors and Artists May Write Off Expenses
		40.10 Deducting Expenses of a Sideline Business or Hobby
		40.11 Deducting Expenses of Looking for a New Business
		40.12 Home Office Deduction
		40.13 Write-Off Methods for Home Office Expenses
		40.14 Allocating Expenses to Business Use
		40.15 Business Income May Limit Home Office Deductions
		40.16 Home Office for Sideline Business
		40.17 Depreciation of Office in Cooperative Apartment
		40.18 Net Operating Losses (NOLs)
		40.19 How To Report a Net Operating Loss
		40.20 Excess Business Losses
		40.21 Business Credits
		40.22 Filing Schedule F
		40.23 Farming Expenses
		40.24 Qualified Business Income Deduction
	Chapter 41 Retirement and Medical Plans for Self-Employed
		41.1 Overview of Retirement and Medical Plans
		41.2 Choosing a Qualified Retirement Plan
		41.3 Choosing a SEP
		41.4 Deductible Contributions
		41.5 How To Qualify a Retirement Plan or SEP Plan
		41.6 Tax Credits for Setting Up a Retirement Plan
		41.7 Annual Qualified Retirement Plan Reporting
		41.8 How Qualified Retirement Plan Distributions Are Taxed
		41.9 SIMPLE IRA Plans
		41.10 Health Savings Account (HSA) Basics
		41.11 Limits on Deductible HSA Contributions
		41.12 Distributions From HSAs
		41.13 Archer MSAs
		41.14 Health Reimbursement Arrangements (HRAs)
		41.15 Small Employer Health Insurance Credit
	Chapter 42 Claiming Depreciation Deductions
		42.1 What Property May Be Depreciated?
		42.2 Claiming Depreciation on Your Tax Return
		42.3 First-Year Expensing Deduction
		42.4 MACRS Recovery Periods
		42.5 MACRS Rates
		42.6 Half-Year Convention for MACRS
		42.7 Last Quarter Placements—Mid-Quarter Convention
		42.8 150% Rate Election
		42.9 Straight Line Depreciation
		42.10 Listed Property
		42.11 Assets in Service Before 1987
		42.12 MACRS for Real Estate Placed in Service After 1986
		42.13 Demolishing a Building
		42.14 Qualified Improvement Property
		42.15 Depreciating Real Estate Placed in Service After 1980 and Before 1987
		42.16 Amortizing Goodwill and Other Intangibles (Section 197)
		42.17 Amortizing Research and Experimentation Costs
		42.18 Bonus Depreciation
	Chapter 43 Deducting Car and Truck Expenses
		43.1 Standard Mileage Rate
		43.2 Expense Allocations
		43.3 Depreciation Restrictions on Cars, Trucks, and Vans
		43.4 Annual Ceilings on Depreciation
		43.5 MACRS Rates for Cars, Trucks, and Vans
			MACRS Tables Applying the Half-Year Convention or Mid-Quarter Convention if Business Use Exceeds 50%
			Deduction from MACRS Tables Cannot Exceed Annual Ceiling
		43.6 Straight Line Method
		43.7 Depreciation for Year Vehicle Is Disposed Of
		43.8 Depreciation After Recovery Period Ends
		43.9 Trade-in of Business Vehicle
		43.10 Recapture of Deductions on Business Car, Truck, or Van
		43.11 Keeping Records of Business Use
		43.12 Leased Business Vehicles: Deductions and Income
	Chapter 44 Sales of Business Property
		44.1 Depreciation Recaptured as Ordinary Income on Sale of Personal Property
		44.2 Depreciation Recaptured as Ordinary Income on Sale of Real Estate
		44.3 Recapture of First-Year Expensing and Bonus Depreciation
		44.4 Gifts and Inheritances of Depreciable Property
		44.5 Involuntary Conversions and Tax-Free Exchanges
		44.6 Installment Sale of Depreciable Property
		44.7 Sale of a Proprietorship
		44.8 Property Used in a Business (Section 1231 Assets)
		44.9 Sale of Property Used for Business and Personal Purposes
		44.10 Should You Trade in Business Equipment?
		44.11 Corporate Liquidation
		44.12 Additional Taxes on Higher-Income Taxpayers
	Chapter 45 Figuring Self-Employment Tax
		45.1 What Is Self-Employment Income?
		45.2 Partners Pay Self-Employment Tax
		45.3 Schedule SE
		45.4 How Wages Affect Self-Employment Tax
		45.5 Optional Method If 2023 Was a Low-Income or Loss Year
		45.6 Self-Employment Tax Rules for Certain Positions
Part 7 Filing Your Return and the Process After You File
	Chapter 46 Filing Your Return
		46.1 Keeping Tax Records
		46.2 Getting Ready to File Your Return
		46.3 Applying for an Extension
		46.4 Getting Your Refund
		46.5 Paying Taxes Due
		46.6 Handling Identity Theft
		46.7 Notify the IRS of Address Changes
		46.8 Interest on Tax Underpayments
		46.9 Tax Penalties for Late Filing and Late Payment
	Chapter 47 Filing Refund Claims, and Amended Returns
		47.1 Filing an Amended Return
		47.2 When to File a Refund Claim
		47.3 Stating the Reasons for Refund Claim
		47.4 Quick Refund Claims
		47.5 Interest Paid on Refund Claims
		47.6 Refunds Withheld to Cover Debts
		47.7 Amended Returns Showing Additional Tax
		47.8 Penalty for Filing Excessive Refund Claim
	Chapter 48 If the IRS Examines Your Return
		48.1 Odds of Being Audited
		48.2 When the IRS Can Assess Additional Taxes
		48.3 Audit Overview
		48.4 Preparing for the Audit
		48.5 Handling the Audit
		48.6 Tax Penalties for Inaccurate Returns
		48.7 Penalties for Not Reporting Foreign Financial Accounts
		48.8 Agreeing to the Audit Changes
		48.9 Disputing the Audit Changes
		48.10 Offer in Compromise
		48.11 Recovering Costs of a Tax Dispute
		48.12 Suing the IRS for Unauthorized Collection
Part 8 2023 Tax Forms
	Form 1040
	Form 1040-SR
		Schedule 1
		Schedule 2
		Schedule 3
		Schedule A
		Schedule B
		Schedule 8812
	Form 2441
	Form 8863
	2023 Tax Table
	2023 Tax Computation Worksheet
	2023 Earned Income Credit (EIC) Table
Part 9 Tax Law Authorities
	Legislative Authorities
		Internal Revenue Code
		Congressional Committee Reports
	Administrative Authorities
		Treasury Regulations
		Revenue Rulings
		In the Weekly Internal Revenue Bulletin
		In the Cumulative Bulletin
		Other IRS Rulings and Releases
	Judicial Authorities
		Court Decisions
		U.S. Tax Court
		Federal District Court
		U.S. Court of Federal Claims
		Court of Appeals Decisions
		Supreme Court Decisions
		States Within Court of Appeals Regions
Part 10 Citations of Authority
	Key to Citations
	Filing Basics
Part 11 Practice Before The IRS
	How Returns Are Examined
		Preliminary Examination
		Interest Abatement Due to IRS Delay
		Types of Personal Examinations
		Restrictions on IRS Examinations of Books
		Administrative Appeal Procedures Applicable to an Examined Return
		How to Handle the Examination
		If You Agree with the Examiner
		An Agreed Case Is Always Reviewed
		Agent’s Interpretation And Application of the Code’s Provisions to the Facts in the Case
		What to Do If You Disagree with the Agent
		Should You Ask for a Conference?
		Appealing Your Case
		How the Appeals Office Operates
		How To Handle the Conference
		Does It Pay to Settle Your Tax Dispute with the IRS?
		What Happens When You Propose a Settlement
		Cash Deposit Stops Interest Accrual on Potential Deficiency
		What to Do After Receiving a 90-Day Letter
		When a 90-Day Letter Is Not Necessary
		Getting a Settlement After Filing a Petition with the Tax Court
	Audit Rules for Partnerships
	The Time Limits Within Which the IRS Must Act for Additional Taxes
		The Three-Year Rule
		What Is the Starting Date for the Limitation Period?
		If More Than 25% of Gross Income Is Omitted
		When the Limitation Period May Be Reduced
		Limitation Rules for Carryback
		Other Limitation Rules for Married Couples
		Limitation Periods Where Recognition of Gain Is Deferred
		Waiving the Limitation Period
		Should a Waiver Extending the Statute Be Signed?
		When the Running of the Statute Is Suspended
		Mitigating the Effect of the Limitation Period to Avoid Double Tax
		When a Closed Year May Be Reopened
		Inconsistent Positions Requirement
		If the Statute Is Lifted
	Filing Refund Claims
		File Timely Refund Claims
		What Refund Form to Use
		Preparing Your Refund Claim
		Submitting a Refund Claim
		Amending the Refund Claim
		Filing an Informal Claim
		Getting a Partial Refund in a Contested Case
		After a Refund Claim Is Filed
		Refunds in Excess of Two Million Dollars Checked by Congress
		Quick Refund for Carryback Items
	How to Arrange Closing Agreements and Compromises
		Why Use a Closing Agreement?
		When Is Form 866 Used?
		When Is Form 906 Used?
		Combined Agreements
		How to Apply for Closing Agreements
		IRS Policy on Closing Agreements
		Offers in Compromise
	How to Get the IRS’ Opinion on a Tax Problem
		Should You Ask for an IRS Ruling?
		User Fee for Ruling
		Getting Advice for Future Transactions
		Getting Advice on Closed Transactions
		You Cannot Get a Ruling for . . .
		How To Request a Ruling
		Your Ruling Will Be Open to Public Inspection
		When Written Determinations Are Open to Public Inspection
		Request for Delay of Disclosure
		What to Do When the IRS Fails to Meet the Time Limitations or Fails to Make Deletions
		How Soon May You Receive an Answer?
		You May Get an Information Letter
		Can You Rely on a Letter Ruling?
		Review and Revocation of Determination Letters
		How Letter Rulings Become Revenue Rulings
		Requesting Technical Advice From the National Office
		How to Get Written Determinations Issued to Other Taxpayers
		Where You May Inspect Written Determinations
		Actions To Obtain Additional Disclosure
	Circular 230: Practice Before the IRS
		PTINs are Mandatory and Must Be Renewed Annually by Paid Tax Return Preparers
		The IRS’ Annual Filing Season Program for Non‑Credentialed Preparers
		Attorneys and CPAs, Enrolled Agents, Enrolled Retirement Plan Agents, and Enrolled Actuaries
		Enrolled Agents
		Limited Practice in Special Cases
		Standards for Signing Returns and Advising Clients on Tax Return Positions
		Standards for Written Tax Advice
		Firm Managers Must Have Procedures to Ensure Compliance with Circular 230
		Advertising and Solicitation
		Contingent Fees
		Negotiating Client’s Refund Check
		Sanctions
		Practice by Former Government Employees
		Tax Information Authorization
	Tax Return Preparer Penalties
		Who Is a Preparer Subject to Penalties?
		Preparer Penalties for Understatements of Taxpayer Liability
		Preparer Penalties for Not Meeting Disclosure and Record-Keeping Requirements
		Preparer Penalty Assessment Procedures
		IRS May Seek Injunction Against Preparer
Glossary
Index
EULA