Ernst & Young Tax Guide 2018

Everything you need to prepare your 2017 tax return

This guide includes ongoing access throughout the 2017 tax return filing season to ey.com/EYTaxGuide More than 1,000 money–saving tips Latest 2017 tax law changes at your fingertips Complete coverage for families, homeowners, investors, entrepreneurs, senior citizens and military Navigating the 3.8% Net Investment Income Tax Applying the tangible property regulations

The industry–leading guide to DIY tax prep, fully updated for 2018

Maximize savings and avoid mistakes Highlights new laws and common errors at a glance Guidance on how to handle special cases and unusual scenarios Reference tables, checklists, sample forms and other tools to help simplify the filing process Determine your obligations under the comprehensive and complex Net Investment Income Tax, with real–world examples and tips for figuring this additional tax Find out how e–filing works Learn about the tax implications of the Affordable Care Act on individuals, including how to figure your Premium Tax Credit Practical considerations for dealing with the complex tangible property regulations Streamline the filing process with the tax organizer and tax calendar Find deductions and tax breaks without wading through tax code Learn how to report income from tips, interest, dividends, rentals and more Claim credits and deduct expenses related to education, health care and more Provides detailed insight from EY professionals with easy navigation and quick reference

ii 2018 tax calendar

v How to use this guide

viii Special contents

x Changes in the tax law you should know about

xiv Important 2017 tax reminders

xvi How to avoid 25 common errors

xvii 50 of the most easily overlooked deductions

xviii Individual tax organizer

xxvi Income and expense records you should keep in addition to your income tax return

Part I The income tax return 1

3 CHAPTER 1 Filing information

48 CHAPTER 2 Filing status

62 CHAPTER 3 Personal exemptions and dependents

92 CHAPTER 4 Tax withholding and estimated tax

Part II Income 121

123 CHAPTER 5 Wages, salaries, and other earnings

149 CHAPTER 6 Tip income

159 CHAPTER 7 Interest income

191 CHAPTER 8 Dividends and other corporate distributions

213 CHAPTER 9 Rental income and expenses

240 CHAPTER 10 Retirement plans, pensions, and annuities

269 CHAPTER 11 Social security and equivalent railroad retirement benefits

282 CHAPTER 12 Other income

Part III Gains and losses 323

325 CHAPTER 13 Basis of property

349 CHAPTER 14 Sale of property

390 CHAPTER 15 Selling your home

411 CHAPTER 16 Reporting gains and losses

Part IV Adjustments to income 431

433 CHAPTER 17 Individual retirement arrangements (IRAs)

474 CHAPTER 18 Alimony

489 CHAPTER 19 Education–related adjustments

501 CHAPTER 20 Moving expenses

Part V Standard deduction and itemized deductions 517

519 CHAPTER 21 Standard deduction

526 CHAPTER 22 Medical and dental expenses

546 CHAPTER 23 Taxes you may deduct

561 CHAPTER 24 Interest expense

587 CHAPTER 25 Contributions

618 CHAPTER 26 Nonbusiness casualty and theft losses

647 CHAPTER 27 Car expenses and other employee business expenses

695 CHAPTER 28 Tax benefits for work–related education

709 CHAPTER 29 Miscellaneous deductions

733 CHAPTER 30 Limit on itemized deductions

Part VI Figuring your taxes and credits 737

739 CHAPTER 31 How to figure your tax

755 CHAPTER 32 Tax on unearned income of certain children

764 CHAPTER 33 Child and dependent care credit

785 CHAPTER 34 Credit for the elderly or the disabled

791 CHAPTER 35 Child tax credit

796 CHAPTER 36 Education credits and other education tax benefits

809 CHAPTER 37 Premium Tax Credit (PTC)

816 CHAPTER 38 Other credits including the earned income credit

Part VII Special situations and tax planning 853

855 CHAPTER 39 Self–employment income: How to file Schedule C

889 CHAPTER 40 Mutual funds

910 CHAPTER 41 What to do if you employ domestic help

918 CHAPTER 42 U.S. citizens working abroad: Tax treatment of foreign earned income

929 CHAPTER 43 Foreign citizensliving in the United States

939 CHAPTER 44 Decedents: Dealing with the death of a family member

956 CHAPTER 45 Estate and gift tax planning

971 CHAPTER 46 Everything you need to know about e–filing

979 CHAPTER 47 If your return is examined

995 CHAPTER 48 Rules for expensing and capitalizing tangible property used in a trade or business

1005 CHAPTER 49 Net investment income tax

1018 CHAPTER 50 Planning ahead for 2018 and beyond

1033 CHAPTER 51 2017 tax rate schedules

Special Contents

Family tax guide

Homeowners′ tax guide

Investors′ tax guide

(If You Own Stocks, Bonds, or Limited Partnerships)

Real estate investors′ tax guide

Self–employed entrepreneurs′ tax guide

Business executives′ tax guide

Senior citizens′ tax guide

Members of the Armed Forces′ tax guide (Including Veterans)

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