Friday, December 23, 2011

Topic #12 – 2011 Form 1040 Exclusive – Adjusted Gross Income Part III


Line 34 - Tuition and fees. Attach Form 8917

If you paid qualified tuition and fees for yourself, your spouse, or your dependent(s), you may be able to take this deduction. See Form 8917.

You may be able to take a credit for your educational expenses instead of a deduction. See the instructions for line 49 for details.


Line 35 – Domestic production activities deduction. Attach Form 8903

You may be able to deduct up to 9% of your qualified production activities income from the following activities.

1. Construction of real property performed in the United States.
2. Engineering or architectural services performed in the United States for construction of real property in the United States.
3. Any lease, rental, license, sale, exchange, or other disposition of:
a. Tangible personal property, computer software, and sound recordings that you manufactured, produced, grew, or extracted in whole or in significant part in the United States,
b. Any qualified film you produced, or
c. Electricity, natural gas, or potable water you produced in the United States. In certain cases, the references above to the United States include Puerto Rico. Your deduction may be reduced if you had oil-related qualified production activities income.

The deduction does not apply to income derived from:

1. The sale of food and beverages you prepared at a retail establishment;
2. Property you leased, licensed, or rented for use by any related person;
3. The transmission or distribution of electricity, natural gas, or potable water; or
4. The lease, rental, license, sale, exchange, or other disposition of land. For details, see Form 8903 and its instructions.


Line 36 – Add lines 23 through 35

Include in the total on line 36 any of the following write-in adjustments. To find out if you can take the deduction, see the form or publication indicated. On the dotted line next to line 36, enter the amount of your deduction and identify it as indicated.

1. Archer MSA deduction (see Form 8853). Identify as “MSA.”
2. Jury duty pay if you gave the pay to your employer because your employer paid your salary while you served on the jury. Identify as “Jury Pay.”
3. Deductible expenses related to income reported on line 21 from the rental of personal property engaged in for profit. Identify as “PPR.”
4. Reforestation amortization and expenses (see Pub. 535). Identify as “RFST.”
5. Repayment of supplemental unemployment benefits under the Trade Act of 1974 (see Pub. 525). Identify as “Sub-Pay TRA.”
6. Contributions to section 501(c)(18)(D) pension plans (see Pub. 525). Identify as “501(c)(18)(D).”
7. Contributions by certain chaplains to section 403(b) plans (see Pub. 517). Identify as “403(b).”
8. Attorney fees and court costs for actions involving certain unlawful discrimination claims, but only to the extent of gross income from such actions (see Pub. 525). Identify as “UDC.”
9. Attorney fees and court costs you paid in connection with an award from the IRS for information you provided that helped the IRS detect tax law violations, up to the amount of the award includible in your gross income. Identify as “WBF.”

Add lines 23 through 35, and this is your total adjustment to income


Line 37 – Subtract line 36 from line 22.

If line 37 is less than zero, you may have a net operating loss that you can carry to another tax year. See the Instructions for Form 1045 for details.

Subtract line 36 from line 22. This is your adjusted gross income.

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This concludes the adjusted gross income for the 2011 Form 1040.

Next up: Tax and Credits sections of the 2011 Form 1040

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