Filing Requirements Flashcards
Some expenses that do not qualify as household maintenance include
Clothing,
Education,
Medical treatment,
Life insurance,
Transportation,
Vacations,
Services by the taxpayer, and
Services by the dependent.
A married individual who lives with a dependent apart from the spouse will be considered unmarried and qualify for head of household status if, for the tax year,
(S)he files separately;
(S)he pays more than 50% toward maintaining the household;
The spouse is not a member of the household for the last 6 months;
The household is the principal home of the individual’s child, stepchild, or qualified foster child for more than half of the year; and
The individual can claim the child as a dependent.
When must an individual file as single?
An individual must file as single if (s)he neither is married nor qualifies for surviving spouse or head of household status.
Taxable income is adjusted gross income (AGI) minus
The greater of itemized deductions or the standard deduction.
When would a taxpayer elect to itemize deductions?
The taxpayer itemizes deductions if the total allowable itemized deductions, after all limits have been applied, is greater than the standard deduction.
When would a taxpayer choose to take the standard deduction?
The taxpayer takes the standard deduction if the standard deduction is greater than the total allowable itemized deductions (after all limits have been applied).
How does a taxpayer elect to itemize deductions?
Election to itemize deductions is made by filing Schedule A of Form 1040. Election in any other taxable year is not relevant.
The standard deduction may not be used by
Persons who itemize deductions
Nonresident alien individuals
Individuals who file a “short period” return
A married individual who files a separate return and whose spouse itemizes
Partnerships, estates, and trusts
The basic standard deduction amount depends on what two factors?
Filing status and
Dependency status on another’s return.
The basic standard deduction amount of a child under age 19 at the end of the year, a student under age 24 at the end of the year, or any age if permanently and totally disabled who can be claimed as a dependent on another individual’s income tax return is limited to the greater of either
$1,150 or
Earned income for the year plus $400 up to the applicable single standard deduction.
Who is entitled to the additional standard deduction?
An individual who has attained the age of 65 or is blind is entitled to the additional standard deduction.
What is the definition of “blind” for the purposes of claiming the additional standard deduction?
“Blind” in this context means no better than 20/200 vision in the better eye, even with corrective lenses.
Can an individual ever be entitled to twice the additional standard deduction?
Yes, an individual who has both reached age 65 and is blind is entitled to twice the amount.
When does an individual qualify as having reached age 65 for the purposes of claiming the additional standard deduction?
The individual is entitled to the amount if (s)he attains age 65 before the end of the tax year, even if (s)he dies before the end of the year (but not if (s)he dies before reaching age 65).
When does an individual not qualify as having reached age 65 for the purposes of claiming the additional standard deduction?
An individual is not entitled to the amount if (s)he dies before attaining age 65, even if (s)he would have otherwise reached age 65 before the year’s end
Must a taxpayer be blind for the entire year to claim the additional standard deduction?
No, a person who becomes blind on or before the last day of the taxable year is entitled to the full amount.
Is the standard deduction prorated if the taxpayer dies during a tax year?
No, once qualified, the standard deduction is allowed in full.
When must an individual file a federal income tax return?
When any of the following conditions are met:
Gross income is above a threshold
Net earnings from self-employment is $400 or more
(S)he is a dependent with more gross income than the standard deduction
Unearned income is over $1,100
The gross income threshold amount generally is
The standard deduction (excluding any amount for being blind)
If one spouse filing separately itemizes deductions, can the other spouse filing separately include the standard deduction in the threshold computation?
No. If one spouse married filing separately itemizes deductions, the other is required to itemize, as well.
Even if not required, what are some reasons a person should file a tax return?
To obtain a refund
To establish a record
To trigger the running of the statute of limitations
When must an income tax return be filed (postmarked)?
It must be filed no later than the 15th day of the fourth month following the close of the tax year.
For a calendar-year taxpayer, when must the income tax return be filed (postmarked)?
It must be filed by April 15.
How can a person obtain an automatic 6-month extension to file their tax return?
An automatic 6-month extension is provided for an individual who files Form 4868 or uses a credit card to make the required tax payment on or before the initial due date.