Above the Line

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Above the Line

1. Income and expenses a company incurs in its day-to-day operations. Above the line items increase or decrease the company's profit. These items are called above the line because they do not deal with how profits or losses are distributed. See also: Below the line.

2. Advertising in which a company buys space or airtime as opposed to only paying commissions on the revenue earned from the advertising. For example, a commercial on television is above the line, while telemarketing is not.

3. A tax deduction one takes on one's gross income instead of one's adjusted gross income.
References in periodicals archive ?
In this section, we examine (1) the impact of an above-the-line deduction that is available regardless of whether a taxpayer itemizes and (2) a replacement of the charitable deduction with a flat-rate 25 percent nonrefundable tax credit, which is an option the CBO previously analyzed.
On page 18 we look at how it can complement traditional advertising and build levels of trust and loyalty where above-the-line campaigns fall short.
Tuition and fees deduction is an "above-the-line" deduction of up to $4,000 for qualified tuition expenses and related fees paid in 2015.
Above-the-line deductions offer two key advantages.
The extenders also include an above-the-line deduction for schoolteachers in kindergarten through high school who spend their own money on books and supplies for the classroom.
If a taxpayer uses funds withdrawn from a 529 plan to pay qualified tuition or related educational expenses, the taxpayer is allowed to take the above-the-line IRC section 222 deduction or utilize the American Opportunity tax credit or Lifetime Learning tax credit, subject to the phaseout rules.
(The hospital insurance tax is imposed on all of a taxpayer's self-employment income.) However, an above-the-line deduction is permitted for one-half of the self-employment tax paid by an individual and attributable to a trade or business carried on by the individual (not as an employee).
Common above-the-line deductions include traditional Individual Retirement Account (IRA) and Health Savings Account (HSA) contributions, moving expenses, self-employed health insurance costs and alimony payments.
Here's some good news--in the final days of the 109th Congress, with pressure from NEA and leadership from Senators Susan Collins (R-ME) and John Warner (R-VA), legislators extended the $250 above-the-line tax deduction for out-of-pocket classroom expenses.
The AICPA's proposal also makes clear that simply because certain state laws require group policies to cover more than one employee (and therefore many corporations are not eligible for group policies), this should not prevent shareholders in small organizations from deducting premiums above-the-line. How large an impact the IRS's May Headliner may have on individuals in your state may depend on your state's insurance laws.
AN ABOVE-THE-LINE tax deduction for long term care insurance premiums--a top federal legislative priority for life insurance agents--is unlikely to be approved by the incoming Democratic-controlled Congress, says the top lobbyist for the National Association of Insurance and Financial Advisors.
* The tax treatment of damages and legal fees and costs varies according to the type of underlying claim, Congressional action providing an above-the-line deduction for legal fees for discrimination claims and a recent Supreme Court decision in Commissioner v.