Class 03 Flashcards
dependents + filing status
what are characteristics of a personal + dependency exemption?
(exempted till 2025)
1. reduce income by the dollar ($ x people on tax return)
2. on top of the standard deduction/itemization
3. cannot double dip
what is a dependent?
a qualifying child or relative
what qualifies a child as a dependent?
- relationship—across/down the family tree
- age—younger than taxpayer + 19/24 (student) OR disabled
- abode—lived w/ taxpayer 6 months+
- support—dependent can’t provide 50% of own support
what if parents filing separately want to claim a dependent?
- check RAAS test—then tie breakers
- parents claim first
- whoever lives w/ parent more
- higher AGI (cuts slack to higher earner due to progressive tax rate)
what qualifies a relative as a dependent?
- relationship—child + up family tree (unrelated living with you exempt)
- support—child
- income—less than “exemption” ($4700)
why does filing status matter?
it affects tax bracket + stand deduction
what is a “single” status?
unmarried + not HoH
what is a “MFJ” status?
- married dec. 31 (inc. surviving spouse in the same yr)
- must sign no joint & several liability (no ignorance defense)
what is a “surviving spouse” status?
widow(er) w/ QC (applicable for 2yrs—exempt if remarried)
what is a “HoH” status?
- unmarried OR abandoned spouse (pay over 50% QC/QR cost)
- pay 50% cost of mom/dad (even if not living together)
- spouse not home 6 months + pays 50% for QC
what is a “MFS” status?
- married but file separately
- joint & several liability exempt
what are tax credit benefits?
reduce liability by the dollar
what are refundable credits?
credits paid even if larger than tax liability
what are non-refundable credits?
no credits paid even if larger than tax liability
what is the child tax credit?
$2000/child + under 17
