Filing Requirements and Filing Status

Question 1

Basic Tax Formula

Answer 1

Gross Income
-Adjustments
AGI
-Itemized Ded. or Stand Ded.
TI before QBI ded.
QBI ded.
Taxable Income
Tentative FIT
- Tax Credits
+ Other Taxes
- Payments
Tax due or Refund

Question 2

Basic list of income inclusions (14)

Answer 2

(1) Wages
(2) Interest
(3) Dividends
(4) State Tax Refunds
(5) Business Income (Sched C.)
(6) Capital gain/loss
(7) Ira Income
(8) Pension and annuity
(9) Rental Income/Loss
(10) K-1 Flow Through Income/Loss
(11) Unemployment Compensation
(12) SS Benefits
(13) Alimony (Agreement entered before 2018)
(14) Other Income

Question 3

Basic list of deductions FOR AGI (10)

Answer 3

(1) Educator Expenses
(2) Traditional IRA Contributions
(3) Student Loan Interest
(4) HSA Contributions
(5) One-half of self-employment taxes
(6) Self-Employed health insurance
(7) Self-Employed retirement
(8) Military members moving
(9) Interest Withdrawal Penalty
(10) Alimony Paid (Agreement entered before 2018)

Question 4

Basic list of Itemized Deductions (5)

Answer 4

(1) Medical Expenses
(2) State and Local Taxes
(3) Interest Expense (Home and Investment)
(4) Charitable Contributions
(5) Casualty/theft loss

Question 5

When must a taxpayer file a return?

Answer 5

When income is greater than the standard deduction.

Question 6

How does extension for individuals work?

Answer 6

Taxpayers get automatic six month extension. However, tax is still due on April 15 and Form 4868 must be filed by April 15.

Question 7

List of Filing Statuses in order of priority

Answer 7

(1) Married filing jointly/singly
(2) Qualifying Surviving Spouse with dependent child
(3) Head of Household
(4) Single

Question 8

When does one qualify for a Married filing status?

Answer 8

Taxpayers must be married at year end. Common law marriages count as well as marriages where couple is living separately so long as not legally separated or divorced. If a spouse dies during year, may still file as married.

Question 9

How to attain Qualifying surviving spouse with dependent child status?

Answer 9

May be used for each of two years following a spouse’s death so long as no remarriage.
SS must pay over half the costs of maintaining a household where dependent child lives the WHOLE year. Dependent child must be child or stepchild of SS.

Question 10

Head of Household basic requirements? (3)

Answer 10

(1) Taxpayer doesn’t qualify for married or qualifying SS statuses.
(2) Individual is not a nonresident.
(3) Individual maintains a home which is the principal residence for more than half the year of a qualifying person including an independent child, parent, or relative.

Question 11

What is a qualifying child for Head of Household filing status purposes?

Answer 11

A qualifying child is a taxpayer’s child, stepchild, adopted child, foster child, sibling, or a descendant of one of these that meets the definition of a dependent.

Question 12

Qualifying parent for Head of Household status purposes?

Answer 12

Parent need not live in taxpayer’s household so long as taxpayer maintains the principal residence of the parent for over half the year.

Question 13

X

Question 14

What are the requirements of a Qualifying/Dependent child? (4)

Answer 14

(1) Close Relationship: Must be taxpayer’s (step)child, adopted child, foster child, (step) sibling, or descendent of one of these.
(2) Age limit: Child must be younger than the taxpayer and under 19 or under 24 if a full time student for at least five months of the year.
(3) Residency and Citizenship: Child must have same principal place of abode as the taxpayer for over half the year. Child must also be a citizen and cannot file a joint return.
(4) Support: Qualifying child must not provide more than half of their own support. Scholarship not included in calculating support if full time student and actual (step)child of taxpayer.

Question 15

Test for Qualifying/Dependent Relative/Parent (6)

Answer 15

(1) Support: Taxpayer must have supplied more than one half of the support of the dependent.
(2) Gross Income Limit: Gross Income must be less than $5,050. Don’t count non-taxable income.
(3) Qualifying relative may not file a joint return unless no tax liability on the joint return and neither spouse would have had tax liability if filing separately.
(4) Citizenship/Residency: Must be a citizen of US or resident of US, Canada, or Mexico.
(5) Relative test: Children, grandchildren, parents, grandparents, siblings, aunts/uncles, nieces/nephews, step, and in-laws.
(6) Non-relative: Dependent may not be non-relative but must live with taxpayer for entire year.

Question 16

What are the requirements for claiming a dependent under a Multiple Support Agreement?

Answer 16

Occurs when multiple taxpayers collectively contribute more than 50% of a dependent’s support. They may choose who will claim dependent. Taxpayer may only claim if they gave more than 10% support.

Question 17

Who claims child in divorce situation?

Answer 17

Whoever child lives with for greater amount of time during the year regardless of who provides support. If time is equal, determined by parent with higher AGI.