J.K. Lasser’s Your Income Tax 2022: For Preparing Your 2021 Tax Return

Cover
Table of Contents
Title Page
Copyright
How To Use Your Income Tax 2022
What's New for 2021
PART 1: Filing Basics
    Do You Have to File a 2021 Tax Return?
    Filing Tests for Dependents: 2021 Returns
    Where to File Your 2021 Form 1040 or 1040-SR
    Filing Deadlines (on or before)
    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 2021
        1.11 Qualifying Widow/Widower Status for 2021 If Your Spouse Died in 2020 or 2019
        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
        3.3 Reimbursements and Other Tax-Free Payments From Employer Health and Accident Plans
        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
        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
        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
        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
        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
        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
        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
        7.22 Life Expectancy Tables
        7.23 When You Convert Your Endowment Policy
        7.24 Reporting Employee Annuities
        7.25 Simplified Method for Calculating Taxable Employee Annuity
        7.26 Employee's Cost in Annuity
        7.27 Withdrawals From Employer's Qualified Retirement Plan Before Annuity Starting Date
        7.28 Coronavirus-Related Distributions
        7.29 Qualified Disaster Distributions
    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
        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
        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
        8.11 Transfer of Traditional IRA to Spouse at Divorce
        8.12 Penalty for Traditional IRA Withdrawals Before Age 59½
        8.13 Required Minimum Distributions (RMDs) From a Traditional IRA
        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
        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
        8.27 Coronavirus-Related IRA Distributions and Qualified Disaster Distributions
    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
        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
        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 of 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 Third Round of Economic Impact Payments
PART 3: Claiming Deductions
    CHAPTER 12: Deductions Allowed in Figuring Adjusted Gross Income
        12.1 Figuring 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 2021 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
        14.2 Nondeductible Contributions
        14.3 Contributions That Provide You With Benefits
        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
        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
        15.7 “Points”
        15.8 Cooperative and Condominium Apartments
        15.9 Investment Interest Limitations
        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
        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
        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
        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 2021
        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 18
        25.3 Figuring the Child Tax Credit and Additional Child Tax Credit
        25.4 Credit for Other Dependents
        25.5 Child and Dependent Care Credit
        25.6 Figuring the Child and Dependent Care Credit
        25.7 Earned Income Credit
        25.8 Income Tests for Earned Income Credit
        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 Health Coverage Credit
        25.15 Mortgage Interest Credit
        25.16 Residential Energy Credits
        25.17 Credit for Qualified Plug-in Electric and Fuel Cell Vehicles
        25.18 Repayment of the First-Time Homebuyer Credit
        25.19 Recovery Rebate Credit
    CHAPTER 26: Tax Withholdings
        26.1 Withholdings Should Cover Estimated Tax
        26.2 Income Taxes Withheld on Wages
        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 2021?
        27.2 Planning Estimated Tax Payments for 2022
        27.3 Dates for Paying Estimated Tax Installments for 2022
        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
        33.8 American Opportunity 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 Work-Related Costs
        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
        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 2022
        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
        37.8 Legal Fees of Marital Settlements
    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 2021
        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
        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 2021 Was a Low-Income or Loss Year
        45.6 Self-Employment Tax Rules for Certain Positions
        45.7 Paying the Deferred Portion of Self-Employment Tax for 2021
PART 7: Filing Your Return and What Happens 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: 2021 Tax Forms
GLOSSARY
INDEX
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