1.1 - Filing Requirements & Status

Question 1

What is the formula used to calculate taxable income if using the standard deduction?

Answer 1

Gross income - adjustments = Adjusted Gross Income
AGI - Standard Deduction - QBI Deduction = Taxable Income

Question 2

What is the formula used to calculate taxable income if using itemized deductions?

Answer 2

Gross income - adjustments = Adjusted Gross Income
AGI - itemized deductions - QBI Deduction = Taxable Income

Question 3

What is the formula used to calculate the taxes due or refund for individuals?

Answer 3

Federal Income Tax - Tax Credits + Other Taxes - Payments = Tax Due or Refund

Question 4

What is the base for the individual income tax?

Answer 4

Taxable income

Question 5

What items are included in gross income?

Answer 5

Wages, interest, dividends, state tax refunds, alimony received (for divorces before 2018), business income, capital gains/losses, IRA income, pension and annuity, rental income/loss, K-1 flow thru income/loss, unemployment compensation, social security benefits.

Question 6

What items are deducted as part of “Adjustments” from the gross income to arrive at the adjusted gross income?

Answer 6

Educator expenses, IRA contributions, student loan interest, health savings accounts, moving expenses (for those in the military), half of self employment taxes, self employed health insurance, self employed retirement, interest withdrawal penalty, alimony paid (for divorced before 2018).

Question 7

What items are included as part of “Itemized deductions” that is subtracted from the AGI to arrive at the taxable income before QBI deduction?

Answer 7

Medical expenses in excess of 7.5% of the AGI
State and local taxes on property, income, or sales up to $10,000
Interest expense on homes or investments
Charitable contributions
Casualty/theft loss attributable to a federal disaster in excess of 10% of AGI

Question 8

Who must file a tax return?

Answer 8

Anyone who’s income is equal to or greater than the regular standard deduction amount plus the additional standard deduction amount for taxpayers 65 and older or blind.

Question 9

When must individual taxpayers file?

Answer 9

On or before April 15th

Question 10

An automatic extension is available for taxpayers who are unable to meet the April 15 deadline. When is the extension deadline and what does it entail?

Answer 10

October 15th
Payment must be maid on April 15th still

Question 11

What date/time frame determines the filing status for single and joint returns?

Answer 11

December 31

Question 12

If divorced during the year can you file a joint return?
If spouse dies during the year can you file a joint return?

Answer 12

No
Yes

Question 13

When may a married taxpayer file a married filing separately return?

Answer 13

If only one spouse has income for the year

Question 14

What date/time frame determines the filing status for qualifying widower with dependent child and head of household filers?

Answer 14

Widower w/ dependent child = whole year
Head of household = half a year

Question 15

Who can use the qualifying widower filing status?

Answer 15

A taxpayer who may use the joint tax return std. deduction and rates for two taxable yaears following the year of death of his or her spouse.

Question 16

How long must the dependent reside w the taxpayer in order for them to qualify as a widow with dependent child?

Answer 16

The whole year

Question 17

What is a benefit/or attraction for taxpayers to have the head of household filing status?

Answer 17

Certain tax payers pay lower taxes

Question 18

What qualifies a taxpayer as the head of household filing status?

Answer 18

• Unmarried, legally separated, or married & has lived apart from their spouse for the las 6 months of the year.
• Not a qualified widow
• Maintains a residence for more than half the year for a qualifying person including a dependent child, parent, or relative.

Question 19

Who is considered a qualifying child?

Answer 19

Child, stepchild, adopted child, foster child, brother or sister, or descendant of any of those who meets the definition of a dependent.

Question 20

Who is considered a dependent parent?

Answer 20

A parent of a taxpayer that the taxpayer maintains a home for (or costs for their home) for the entire year. Dependent parents do not need to live w the taxpayer.

Question 21

Who qualifies as a dependent relative?

Answer 21

Grandparents, brothers & sisters, aunts & uncles, nephews & nieces, stepparents, parent in-laws, sister and brother in-laws. A dependent relative other than a mother or father must live with the taxpayer in order to qualify.

Question 22

Who does not qualify as a dependent relative?

Answer 22

Cousins, Forster parents, and unrelated dependents

Question 23

For the following to meet the Head-of-Household Qualifying Persons requirement, do they qualify as dependents and do they need to live w the taxpayer?
- Child or descendant
- Parents
- Other relatives

Answer 23

Child or descendant - Y & Y
Parents - Y & N
Other relatives - Y & Y

Question 24

What are some filing requirements to be a qualifying child?

Answer 24

CARES
Close relative
Age limit
Residency and filing requirements
Eliminate gross income test
Support test

Question 25

What are some filing requirements to be a qualifying relative?

Answer 25

SUPORT
Support test
Under a specific amount of taxable gross income test
Precludes dependent filing a joint tax return test
Only citizens test
Relative test OR Taxpayer lives with individual for whole year

Question 26

What are the requirements (specifically) that a qualifying child must satisfy?

Answer 26

1. Be a child, stepchild, sibling, step sibling, or descendant of those listed
2. Be under the age of 19, or 24 and a full time student
3. Live with the taxpayer for more than half of the year
4. Must not contribute more than half of his/her own support

Question 27

What are the requirements (specifically) that a qualifying relative must satisfy?

Answer 27

1. Taxpayer must supply more than half of the individuals support
2. The individual must have gross income of less than $4,400
3. Must be a child, grandchild, parent, grandparent, sibling, aunt/uncle, niece/nephew, stepchild, stepparent, or in law OR someone who lives with the taxpayer for the entire year

Question 28

What happens when two or more taxpayers together contribute more than 50% support of a person?

Answer 28

They can agree among themselves, who may claim the individual as a dependent for tax benefits

Question 29

A contributor in a multiple support agreement must have contributed how much?

Answer 29

More than 10%

Question 30

Joint contributors are required to file what form?

Answer 30

Form 2120 which is a Multiple Support Declaration

Question 31

Peter is single and lives alone. He has no income and is supported by the following people:

Tim (a friend) - $2,400 - 48% of total support
Angie (sister) - $2,250 - 43% of total support
Mike (Peter’s son) -$450 - 9% of total support

Under a multiple support agreement, Peter is considered a dependent of who?

Answer 31

Angie only

Peter is a friend, friends don’t qualify
Mike does not provide more than 10%

Question 32

If parents have custody of a child for equal parts of the year, who claims the tax benefits related to the dependent?

Answer 32

The parent with the higher adjusted gross income