Adjustments to Income

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What is an adjustment to income?

• Expenses paid by the taxpayer that lowers taxable income and therefore has the potential to lower their tax liability

• Adjustments to income vs itemized deductions

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Intake and Interview Form

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Page 1 Form 1040

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Student Loan Interest• 1098-E (not everyone receives one from lender)• $2,500 max claimed• MFS cannot claim deduction• Cannot be a dependent

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Educator Expenses• Expenses need to be documented• Must be a Teacher, Instructor, Counselor,

Principal, or Aide• Kindergarten-grade 12• $250 deduction per educator

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Tuition and Fees • Cannot be used in conjunction with the American

Opportunity Credit or Lifetime Learning Credit. o If they are eligible for a education credit and a deduction, enter the

information both ways to see if the deduction or the credit is more beneficial

• MFS cannot take the deduction• Cannot be a dependent

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IRA Contribution Deduction

• For clients who are making contributions to their traditional or Roth IRA.

• Maximum deductionso $5,500 under 50 years of ageo $6,500 over 50

• MFS with income over $10,000 cannot take the deduction

• Income limitso People making over $60,000, please see publication 590 for more rules

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