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Federal tax prep > Ch 2 - Questions (Filing Requirements) > Flashcards

Ch 2 - Questions (Filing Requirements) Flashcards

1
Q

What three factors determine filing requirements of nondependents?

A

Filing status, Age, Gross Income

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2
Q

List the 5 filing statuses

A

Single, MFJ, MFS, HoH, Qualifying widow(er)

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3
Q

Marital status is determined when?

A

On the last day of the tax year.

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4
Q

Unmarried taxpayers can file with which statuses

A

Single, HoH, Qualifying widow(er).

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5
Q

Married taxpayers can file with which statuses

A

MFJ, MFS

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6
Q

How is common-law marriage addressed

A

If they are in a common-law marriage recognized by the state, at the end of the tax year, they are considered married.

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7
Q

How does common-law divorce work

A

There is no common-law divorce. Common-law marrieds must divorce the same as any other married couple.

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8
Q

How is the age of someone determined for tax purposes

A

The person is considered to have attained a given age the day before their birthday. For example, someone born Jan 1 is considered to be the age they were Dec 31.

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9
Q

How is the age of someone determined when they die

A

The age is determined as of the date of death.

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10
Q

What are the two aspects to determining gross income?

A

Who owns the income. What income should be reported on a tax return.

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11
Q

How is ownership of income determined.

A

By state law. (Community property, non-community property states)

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12
Q

For a single person, they are required to file if their gross income is:

A

$10400 if they are under age 65. $11950 if they are 65+,

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13
Q

For MFJ, they are required to file if their gross income is:

A

$20800 if they are both under age 65, $22050 if one spouse is 65+, $23300 if they are both 65+

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14
Q

For MFS, they are required to file if their gross income is:

A

$4050

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15
Q

For HOH, they are required to file if their gross income is:

A

$13400 if under age 65, $14950 if 65+

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16
Q

For Qualifying Widow(er), they are required to file if their gross income is:

A

$16750 if they are under age 65, $18000 if they are 65+

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17
Q

What are the standard deduction amounts for people who are not blind or age 65+

A

$6350 single or MFS, $12700 MFJ or Qualifying widow(er), $9350 HoH.

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18
Q

What are the increases for standard deductions for blind or 65 or older taxpayers.

A

$1550 per condition, for single and HoH. $1250 per condition, for married and qualifying widow(er).

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19
Q

How is blindness recognized for tax purposes

A

Taxpayer must obtain a certified statement from their eye doctor or registered optometrist.

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20
Q

What are the degrees of blindness that are considered for tax purposes

A

Totally blind, or partly blind seeing no better than 20/200 in the better eye with corrective lenses, or the person has a field of vision not more than 20 degrees.

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21
Q

When MFS, a taxpayer may claim their spouse’s personal exemption under what criteria?

A

Spouse has no gross income, is not filing a return, is not a dependent of another person.

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22
Q

What is the Personal Exemption Phaseout (PEP)?

A 
For higher-income taxpayers, reduces their personal exemption by 2% for every $2500 ($1250 for MFS) that exceeds particular AGI thresholds.
$261500 - Single
$313800 - MFJ and QW
$287650 - HoH
$156900 - MFS
23
Q

What happens with personal exemptions as of 2018

A

All personal exemptions are eliminated beginning in 2018

24
Q

Under what circumstances can a dependent claim their own personal exemption.

A

A dependent cannot claim their own personal exemption, even if the person entitled to claim it does not.

25
Q

Must a dependent file a return

A

They may or may not need to file a return. This is determined by: 1. if they have unearned income greater than $1050, or 2. Their earned income exceeds the filing threshold amount based on marital status, age, blindness. Or 3. If the dependent is married and if their spouse is filing a separate return and itemizing deductions and has over $5 in GI. Or 4. If dependent’s gross income exceeds threshold amount based on marital status, age, blindness and exceeds threshold.

26
Q

What happens if a dependent taxpayer’s standard deduction exceeds the regular filing status standard deduction?

A

It may not exceed the regular standard deduction.

27
Q

Can a parent include the child’s income on their return instead of the child filing a return?

A

Yes, if they are under age

28
Q

What form is used if parents are eligible to include the child’s income on their return?

A

Form 8814

29
Q

Under what conditions can a parent include a child’s income on their own return

A

Child is dependent under age of 19, or under age 24 and a full time student. Child only had income from interest and dividends and their gross income was less than $10500. The child does not file a return. No federal income tax was withheld from the child’s current-year income, no current-year estimated taxes were made by or for the child, or no previous year overpayments were applied against the child’s current-year tax liability.

30
Q

True or False - If a taxpayer does not meet the income filing requirements, they will for sure not have to file.

A

False - there are some circumstances where they must file. Some of these are:
Owes uncollected social security or medicare tax on tips not reported to the employer or on wages received from an employer who did not withhold these taxes. The taxpayer received HSA, Archer MSA, or Medicare Advantage MSA distributions during the tax year. Has net earnings from self-employment of $400 or more. Received an advanced premium tax credit (APTC) during the tax year.

31
Q

A taxpayer who has a tax balance due and fails to file by the due date may receive what?

A

A penalty

32
Q

What is the penalty for failing to file a return when there is a tax balance owed?

A

Generally 5% for each month or part of month return is late, but not more than 25%. This can increase if failure to file is found to be fraud.

33
Q

If a taxpayer is not able to file their return by the due date what form do they file?

A

Form 4868, a six-month extension.

34
Q

If a taxpayer owes a tax balance, and they file a six-month extension, when is their tax balance due?

A

Tax balances are due at the filing deadline, regardless of the extension.

35
Q

How much is a failure-to-pay penalty?

A

0.5% of the unpaid taxes for each month or part of a month after the due date, but not more than 25% of the unpaid tax. However, the penalty does not apply if there is an extension filed if the taxpayer paid at least 90% of the actual tax liability on or before the due date, and the balance was paid when the return was filed.

36
Q

If a taxpayer has an extension to file, how much of their liability do they need to pay by the filing (not extension) due date in order to not receive a failure-to-pay penalty?

A

90%, with the balance paid when the return is filed.

37
Q

Single filing status

A

Taxpayers who are unmarried and do not qualify as HoH or QW.

38
Q

Married filing status (J or S)

A

Married legally and not legally separated under a decree of divorce or separate maintenance as of the last day of the tax year. Includes common-law marriages based on state law.

39
Q

If a MFS itemizes deductions, what happens if the other taxpayer does not itemize deductions on their return?

A

Their standard deduction is $0.

40
Q

Is is usually more advantageous for a married couple to file jointly or separately.

A

Jointly

41
Q

If a surviving spouse remarries in the same tax year as their spouse died, what filing status do they use?

A

They may choose to file a joint return or separate.

42
Q

When may a nonresident alien file a joint return

A

Only if married to a US citizen or resident alien at the end of the year, and both agree to report their total worldwide income for the year on their joint US return.

43
Q

What form is used for keep a spouse from having their refund taken due to a spouse’s past due debts?

A

Form 8379 Injured Spouse Allocation

44
Q

What is the Injured Spouse Allocation used

A

When the injured spouse wants their share of the refund, and also is not legally obligated to pay the past due debt, and (if in a non-community-property state) the injured spouse made or reported tax payments or claimed a refundable tax credit.

45
Q

What form is used to provide relief from joint responsibility for tax, interest, and penalties on a return?

A

Form 8857 Request for Injured Spouse Relief.

46
Q

What three types of relief can form 8857 provide?

A

Innocent spouse relief. Separation of liability. Equitable relief.

47
Q

What types of debts may offset income tax refunds?

A

Past due federal tax, student loans, child and/or spousal support payments, state income tax, state unemployment compensation.

48
Q

Can credit card debts offset income tax refunds?

A

No

49
Q

Can past due student loans offset income tax refunds?

A

Yes

50
Q

Can owed child support offset income tax refunds?

A

Yes

51
Q

Does tax preparer have right to determine if an individual is married?

A

No. If there is any confusion, ask manager to assist.

52
Q

When are children considered to have attained a certain age?

A

On their birthday. (Adults are day before birthday)

53
Q

Does a taxpayer have to have a dependent to file as QW?

A

Yes

54
Q

Does a taxpayer have to have a dependant to file as HoH.

A

Yes

Federal tax prep (33 decks)

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