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All EA Part 1 Formulas
Preliminary Work and Taxpayer Data
6 items
Dependent's standard deduction
; E = earned income, = regular standard deduction for filing status
Foreign housing exclusion
; H = qualified housing costs, FEIE = foreign earned income exclusion cap ($130,000 in 2025)
Kiddie tax on a child's unearned income
; U = child's unearned income (>$2,700), = parent's marginal rate, = child's rate on the second $1,350; first $1,350 untaxed
Additional child tax credit refundable amount
; = child tax credit left after it reduces tax to zero, n = qualifying children with SSN, EI = earned income. With 3+ qualifying children, instead use the greater of the 15% amount or (SS taxes paid - EITC).
Excess Social Security tax withholding refund (2025)
where ceiling = $176,100 wage base × 6.2%, claimed only when multiple employers over-withheld
Child tax credit after MAGI phaseout
; n = qualifying children under 17 with SSN. Credit drops $50 for each $1,000 (or part) that MAGI exceeds T; T = $200K (S/HoH/MFS) or $400K (MFJ)
Income and Assets
15 items
Installment sale gross profit ratio
; gross profit = sale price − adjusted basis − selling expenses; contract price = total payments due (Form 6252)
Taxable state tax refund under section 111 tax benefit rule
; R = refund received, I = prior-year itemized deducted, S = prior-year standard deduction, U = unrecovered SALT
IRA pro-rata taxable distribution
; D = distribution, B = total nondeductible basis (Form 8606), V = aggregate traditional IRA value before distribution
Insolvency exclusion amount for cancellation of debt
; L = liabilities, FMV = FMV of assets, both measured immediately before discharge
Recourse foreclosure: computing cancellation of debt (COD) income
, where FMV is the property's fair market value at foreclosure. The separate property disposition is gain/loss = FMV − basis.
Active participation rental real estate \$25,000 loss allowance
; MAGI = modified AGI; allowance fully phased out at $150,000
Excess IRA contribution excise tax
; E = excess contribution remaining at year-end, applied each year until withdrawn or absorbed
Missed RMD excise tax
; S = RMD shortfall; rate drops to 10% if corrected within 2 years with Form 5329 explanation
Mandatory withholding on plan-to-participant distribution
; G = gross plan distribution; participant must replace W from other funds within 60 days to roll the full gross amount
Substituted basis in a Section 1031 like-kind exchange
; B = basis, = gain recognized, = loss recognized
Recognized gain in a Section 1031 like-kind exchange
; = gain recognized, = realized gain, boot = cash or non-like-kind property received
Realized gain or loss on a property disposition
; AR = amount realized (sale proceeds net of selling expenses), AB = adjusted basis (cost plus improvements minus depreciation)
Self-employed health insurance deduction cap
; start from net profit, not the 0.9235 SE-tax base; excess premiums shift to Schedule A medical
Net self-employment earnings from Schedule C
; 0.9235 = 1 minus employer-equivalent SE tax share; 15.3% SE tax then applies to Net SE
SEP-IRA deduction cap for a self-employed owner
; start from net profit, NOT the 0.9235 SE-tax base; capped at $70,000; 25% of compensation for common-law employees
Deductions and Credits
9 items
Investment interest expense deduction
; = investment interest paid, NII = net investment income (interest, non-qualified dividends, short-term gains); excess carries forward indefinitely
Itemized medical expense deduction above the AGI floor
; M = qualified unreimbursed medical expenses (including LTC up to age-band cap), AGI = adjusted gross income, 7.5% = statutory floor
Quid pro quo charitable contribution deduction
; P = payment to charity, = fair market value of goods or services received by the donor (dinner, raffle, auction item)
SSTB includible QBI inside the phase-in window
; D% = (TI − threshold) / window; same scaling applies to W-2 wages and UBIA
QBI deduction inside the phase-in range
; Tent = 20% × QBI; WageLim = W-2/UBIA cap; D% = disallowance percentage
Overall QBI deduction with REIT and PTP income
; TI = taxable income before QBI ded, NCG = net capital gain
Premium tax credit allowed amount
; SLCSP = second-lowest-cost silver plan premium, expected contribution = applicable % × household income
General business credit limitation
; TMT = tentative minimum tax
Residential clean energy credit (Section 25D)
; expenditures = solar, geothermal, wind, biomass, fuel cell costs (fuel cells capped at $500 per half-kW). P.L. 119-21 §70506 ends §25D for expenditures made after 12/31/2025, so 2025 is the last year
Taxation
3 items
Failure-to-file penalty
; m = months (or part) late, U = unpaid tax; reduced by concurrent failure-to-pay penalty for the same months
AMT exemption phaseout
; E = allowed exemption, E₀ = full exemption ($88,100 single / $137,000 MFJ), T = phaseout threshold ($626,350 / $1,252,700)
Additional Medicare tax
; SE = self-employment earnings, T = threshold ($200K single, $250K MFJ, $125K MFS)
Advising the Individual Taxpayer
10 items
Basis of replacement shares after a wash sale
; = cost of replacement shares, L_disallowed = loss disallowed under §1091; holding period tacks
Required minimum distribution (RMD)
; = prior year-end IRA balance, = Uniform Lifetime Table divisor for current age (begins age 73)
Maximum long-term tax on a collectibles gain under Section 408(m)
; = taxpayer's ordinary marginal rate, G = net long-term gain on collectibles
Nonqualified annuity exclusion ratio
; IIC = after-tax basis, expected return = total contract payout; taxable = payment × (1 − ratio)
Section 529 five-year-forward gift exclusion election cap
; 2025: 5 × $19,000 = $95,000 per donor ($190,000 MFJ split); elected on Form 709
Section 1041 carryover basis on spousal or divorce-incident transfer
; B = adjusted basis; gain/loss nonrecognition under §1041; holding period also tacks
Injured spouse allocated refund share on Form 8379
, capped at joint refund; WH = withholding, C = credits allocated to injured spouse, T = MFS-allocated tax on her income
Capital loss carryover to next year
; NetLoss = net capital loss after offsetting gains; use $1,500 if MFS; ST/LT character preserved
Annualized income installment required payment
; = annualized tax for cumulative period i; = 22.5%, 45%, 67.5%, 90% for Q1-Q4
Post-2017 net operating loss deduction limit
; = allowable NOL deduction; = taxable income computed before the NOL deduction
Specialized Returns for Individuals
9 items
Tentative estate and gift tax above the \$1M base
; B = tax base (taxable estate + adjusted taxable gifts), 40% is the top unified rate above $1M
Federal estate tax with unified credit
; TE = taxable estate, ATG = adjusted taxable gifts, GTP = gift tax payable on prior gifts, UC = unified credit ($5,541,800 in 2025)
Deceased Spousal Unused Exclusion amount
; = first decedent's basic exclusion, = first decedent's taxable estate, = first decedent's adjusted taxable gifts
Surviving spouse's total gift and estate exemption with DSUE
; = survivor's own basic exclusion amount ($13.99M in 2025), DSUE = deceased spousal unused exclusion elected on first spouse's Form 706; does NOT apply to GST
Current-year gift tax under the Form 709 cumulative method
; T() = tax from §2001 schedule, = cumulative lifetime taxable gifts including current year, = prior taxable gifts, = remaining unified credit
Gift-split taxable gift per spouse on a separate-property gift
; G = total separate-property gift to one donee, = annual exclusion per donee per spouse ($19,000 in 2025); both spouses must consent on Form 709
Section 6038(c) foreign tax credit reduction for missing Form 5471 or 8865
; n = 3-month periods (or fractions) of continued failure AFTER it has run more than 90 days past IRS notice, FT = available foreign taxes; §6038(c)(2) caps R at the GREATER of $10,000 or the entity's income; §6038(c)(3) then subtracts the §6038(b) penalty (floor $0)
Form 8938 maximum failure-to-file penalty
; k = 30-day periods (or fractions) the failure continues after it has run more than 90 days past IRS notice, so the first 90 days are free; add 40% accuracy penalty on related underpayment
Willful FBAR penalty
; P = penalty, B = account balance at time of violation (2025 inflation-adjusted floor)
EA Part 1 Limits and Thresholds
Preliminary Work and Taxpayer Data
6 items
CTC is $2,200 per qualifying child under 17, refundable up to $1,700 as ACTC.
2025 HSA contribution limits are $4,300 self-only and $8,550 family, with a $1,000 catch-up at age 55+.
A 2025 qualifying relative must have gross income under $5,200 and receive more than half of support from the taxpayer.
The Form 1116 de minimis exception skips the form when foreign tax shown on 1099s is $300 or less ($600 MFJ).
Kiddie tax applies to a child's unearned income above $2,700 at the parent's marginal rate, filed on Form 8615.
Form 8938 thresholds for a single U.S. resident are $50,000 at year-end or $75,000 at any time during the year.
Income and Assets
16 items
2025 LTCG and qualified-dividend rates are 0% up to $48,350 single / $96,700 MFJ, with the top 20% rate above $533,400/$600,050.
§121 excludes up to $250,000 single / $500,000 MFJ of gain on a principal residence with 2-of-5-year ownership and use tests.
QCDs are available at age 70½, capped at $108,000 per year (2025), and count toward the RMD while excluded from AGI.
For 2025 a third-party settlement organization files Form 1099-K only when a payee exceeds both $20,000 in payments and 200 transactions; payment-card transactions have no threshold.
Form 5471 is required for U.S. persons owning 10% or more of a foreign corporation, with a $10,000 per-form minimum penalty.
W-2G is issued at $1,200 for slots/bingo, $1,500 for keno, $5,000 for poker, or $600 and 300x the wager.
Qualified principal residence COD exclusion (through 2025) is capped at $750,000 ($375,000 MFS), acquisition debt only.
Qualified plan loans are capped at the lesser of $50,000 or 50% of the vested balance, repaid within 5 years.
Roth IRA contributions phase out from $150,000 to $165,000 single and $236,000 to $246,000 MFJ in 2025.
The 2025 IRA contribution limit is $7,000 with a catch-up to $8,000 at age 50.
ISO favorable treatment requires holding the stock at least 2 years from grant and 1 year from exercise, with the bargain element an AMT preference at exercise.
Section 1031 like-kind exchanges require identification within 45 days and closing within 180 days, and post-2018 apply only to real property.
Section 1245 depreciation is recaptured as ordinary income, while unrecaptured Section 1250 gain on real property is taxed at a maximum rate of 25%.
Traditional IRA active-participant deduction phaseout is $79,000-$89,000 single and $126,000-$146,000 MFJ for 2025.
SEP-IRA contributions are capped at 25% of employee comp or 20% of net SE income for the owner, with an overall cap of $70,000.
Student loan interest deduction is capped at $2,500 with MAGI phaseout $85,000-$100,000 single and $170,000-$200,000 MFJ; MFS disqualified.
Deductions and Credits
10 items
The QBI wage limit and SSTB limit begin phasing in at taxable income of $197,300 single/HoH/MFS and $394,600 MFJ for 2025.
2025 mileage rates are $0.70 business, $0.21 medical, and $0.14 charitable.
Personal casualty losses in a federally declared disaster apply a $100 per-event floor and a 10% of AGI floor on the aggregate.
Nonresident aliens cannot claim the standard deduction except under U.S.-India treaty Article 21(2) for students and business apprentices.
On 1040-NR Schedule A, a federally declared disaster casualty loss is deductible only if the property was located within the United States (§873(b)(1)). The §165(h) floors match Form 1040: $100 per event plus 10% of AGI.
The §199A W-2 wage and UBIA limit is the greater of 50% of W-2 wages or 25% of W-2 wages plus 2.5% of UBIA.
The 2025 adoption credit is $17,280 per child, with up to $5,000 refundable and the non-refundable remainder carrying forward 5 years, phasing out from MAGI $259,190 to $299,190.
2025 EITC maximums are $8,046 with 3+ kids and $4,328 with 1 child, with investment income capped at $11,950.
AOTC and LLC both phase out at MAGI $80,000 to $90,000 single/HoH and $160,000 to $180,000 MFJ, with MFS disqualified from both.
Clean vehicle credits under §30D, §25E and §45W are denied for vehicles acquired after September 30, 2025, while §25C and §25D end after December 31, 2025.
Taxation
2 items
When a return is more than 60 days late, the minimum failure-to-file penalty is the lesser of $510 (returns required to be filed in 2025) or 100% of unpaid tax.
Schedule H 2025: cash wages of $2,800 to one household employee triggers FICA; $1,000 in any quarter triggers FUTA on the first $7,000.
Advising the Individual Taxpayer
12 items
2025 gift annual exclusion is $19,000 per donee, with a lifetime gift/estate exemption of $13.99M reported on Form 709; top transfer-tax rate is 40%.
§72(t) 10% early-withdrawal penalty applies before age 59½; first-time homebuyer IRA exception is capped at $10,000 lifetime.
§6654 estimated-tax safe harbor: pay 90% current or 100% prior, rising to 110% if prior AGI exceeds $150,000.
2025 401(k)/403(b)/457(b) elective deferral is $23,500 with an age-50 catch-up of $7,500 and an ages 60-63 super catch-up of $11,250.
SECURE 2.0 allows unused §529 balances to roll to the beneficiary's Roth IRA up to $35,000 lifetime when the account is at least 15 years old.
The §529 5-year-forward election front-loads $95,000 single or $190,000 MFJ in one year via Form 709.
Section 1041 treats property as incident to divorce if transferred within 1 year of marriage ending or pursuant to instrument within 6 years.
Pre-2019 alimony triggers front-loading recapture if payments drop by more than $15,000 between years 1, 2, and 3.
Alimony under instruments executed after 12/31/2018 is not deductible by payer and not taxable to recipient.
Post-2017 NOLs carry forward indefinitely with no carryback and are capped at 80% of taxable income before the NOL deduction.
Charitable contribution carryovers last 5 years (or 15 years for qualified conservation easements), and foreign tax credits carry 1 back, 10 forward by category.
Form 1045 tentative refund for an NOL must be filed within 12 months of the loss year-end, and the IRS must act on it within 90 days.
Specialized Returns for Individuals
8 items
Form 706-NA is required for a nonresident alien decedent with U.S.-situs property exceeding $60,000, due 9 months after death.
§6166 defers estate tax when a closely held business exceeds 35% of the adjusted gross estate, with 2% interest on the deferred tax on the first $1,900,000 of taxable estate above the exclusion for a 2025 decedent.
Gift-splitting under §2513 doubles the 2025 annual exclusion to $38,000 per donee, and each spouse generally files a separate Form 709.
A GST skip person is at least 2 generations below the transferor, or an unrelated individual more than 37.5 years younger.
The 2025 annual gift limit to a noncitizen spouse is $190,000, while transfers to a U.S. citizen spouse qualify for an unlimited marital deduction.
Form 8938 failure-to-file is $10,000, plus $10,000 per 30-day period once the failure runs more than 90 days past IRS notice, up to $50,000 more, plus a 40% accuracy penalty on the related underpayment.
Form 3520 is triggered by foreign gifts exceeding $100,000 from a nonresident individual or $20,116 from a foreign corporation or partnership in 2025.
Willful FBAR penalty is the greater of $100,000 or 50% of the account balance; non-willful is $10,000 per form per year post-Bittner.
