Tax Credits and Deductions Flashcards
6 cards from real CTA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Tax Credits and Deductions flashcards as text
Which tax credit provides a dollar-for-dollar reduction in tax liability for contributions to retirement savings plans by lower-income taxpayers?
Answer: Saver's Credit (Retirement Savings Contributions Credit)
The Saver's Credit provides a credit of 10-50% of eligible contributions to retirement plans for taxpayers with income below specified limits.
Which of the following medical expenses is deductible on Schedule A?
Answer: Prescription medications
Prescription medications qualify as deductible medical expenses on Schedule A, subject to the 7.5% AGI floor.
The state and local tax (SALT) deduction is currently capped at what amount for most taxpayers?
Answer: $10,000
The TCJA limited the SALT deduction to $10,000 ($5,000 for married filing separately) through at least 2025.
The Business Energy Investment Tax Credit (ITC) under Section 48 incentivizes investment in which type of property?
Answer: Qualifying renewable energy property like solar panels
Section 48 provides an investment tax credit for qualifying renewable energy property including solar, wind, and other clean energy installations.
Which credit is available to employers who provide qualified family and medical leave to employees?
Answer: Employer Credit for Paid Family and Medical Leave (Section 45S)
IRC Section 45S provides a credit to employers who pay qualifying employees at least 50% of wages during family and medical leave.
Charitable contribution deductions for appreciated capital gain property donated to a public charity are generally limited to what percentage of AGI?
Answer: 30% of AGI
Contributions of appreciated capital gain property to public charities are generally limited to 30% of AGI, with a 5-year carryforward for excess amounts.