Filing Requirements - Preliminary Work Flashcards

1
Q

3 Reasons to Compare Prior returns to Current Year Returns

A

Prevents errors

Identify significant changes

Identify uncommon items

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

4 Typical Uncommon Items to look for on new returns

A

Sale of principal residence
Retirement Pay
Itemized Deductions
Applicable Taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

6 Items Needed from Prior Return to Complete Current Return - GASSFC

A
Gain or loss carry over, 
AMT for credit, 
State Income tax refund, 
Schedule D, 
Form 8801. 
Charitable gift carry over, 

8801 taxpayer not required to pay the alternative minimum tax but did will have a credit.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Taxpayers correspondence with the IRS will show issues that will affect the current year return.

3 reasons to review?

AJA

A

Compliance with prior audits, adjustments and judgements.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

4 items of taxpayer personal information that needs to be reviewed to verify the identity of individuals to process the tax return.

A

DOB, age, marital status and dependents.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

3 reasons the age of individual is important to review

A

Additional deductions, retirement distributions, dependency.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What affect does Married filing jointly have on deductions?

A

Increases beneficial dollar limit for deductions and credits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What should you obtain to verify the identity of an individual?

A

State issued ID.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are the types of taxes that can belong to an individual..

A

Income tax, withholding estimated tax, FICA self employment tax, FUTA, AMT, Estate tax, gift tax, GST

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What are the 2 classifications of a non US citizen called for tax purposes?

A

Non-resident alien, resident alien

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

2 types of tests to determine if an individual is a non-resident alien or a resident alien

A

Green card test and substantial presence test.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the difference between a non resident alien and a resident alien?

A

A non-resident alien FAILS the green card test AND the substantial presence test.

A resident alien PASSES the green card test OR the substantial presence test.

Need to pass in the calendar year.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

When does a dual status alien occur?

A

Occurs when a person first comes to the United States or leaves the United States and they had residency in two jurisdictions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What can a dual status alien choose for tax purposes?

A

Whether to be taxed as resident alien or a non-resident alien.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Determine if a tax payers needs to file a return, gross income includes..

A

Any income that can be excluded as foreign income or a foreign housing amount.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

T/F: Income, estate and gift tax returns, paying estimated tax are generally the same for U.S. and resident aliens.

A

True: whether they are living in the United States or abroad.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

T/F: Income, filing status and age generally determine whether a U.S. citizen or resident alien needs to file a tax return.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

T/F: Generally, U.S. citizens and residents aliens are taxed on domestic income.

A

False, they are generally taxed on world wide income.

19
Q

T/F: Non-resident aliens are generally taxed on domestic income only.

A

True, unless they elect to be treated as a U.S. resident. To file a joint return with a spouse who is a U.S. citizen or resident alien.

20
Q

Any U.S. citizen, resident or person doing business in the United States, who has an ownership interest, signatory authority, or other authority of financial account in excess of $10k at any time during the calendar year must file…

A

FINCEN report 114 report of foreign bank and financial accounts, commonly referred to as a FBAR

21
Q

When does a FBAR need to be filed by?

A

April 15th or October 15th if an extension is filed.

22
Q

What penalties if you fail to file an FBAR?

A

Civil and criminal penalties.

23
Q

What does form 8938 report on?

A

Reports specified foreign financial assets.

24
Q

Living in the United States, what is the threshold for individuals/MFS that need to file form 8938?

A

$50k at the last day of the year

More than $75k at any time during the year.

25
Q

Living outside the United States, what is the threshold for individuals/MFS that need to file form 8938?

A

$200k at the last day of the year

More than $300k at any time during the year.

26
Q

Living in the United States, what is the threshold for join returns that need to file form 8938?

A

$100k at the last day of the year

More than $150k at any time during the year.

27
Q

Living outside the United States, what is the threshold for joint returns that need to file form 8938?

A

$400k at the last day of the year

More than $600k at any time during the year.

28
Q

When must Form 8938 be filed?

A

It must be filed with any individual annual return.

29
Q

Do you need to file Form 8938 if you’re not required to file an annual individual income tax return?

A

No

30
Q

Do you need to file a FBAR if you file form 8938?

A

Yes

31
Q

Difference between filing dates between FBAR and Form 8938?

A

FBAR 4/15 or 10/15
8938 - With any annual return including income tax return 1040/1040NR/1040 SR, 1041N or information return 1065, 1120, 1120S

32
Q

Which type isn’t limited to Bank and Financial accounts? FBAR or Form 8938

A

Form 8938.

33
Q

Do you report FBAR or 8938 on FCEN?

A

FBAR

34
Q

Who must file Form 5471?

A

officers, directors or shareholders of foreign corporations.

35
Q

Form 5471 is used to satisfy the reporting requirements of these 3 sections

A

Section 1638 1646 and amounts related to sec. 965 and the related regulations with the tax return.

36
Q

What form is required for U.S. persons and executors of estate of U.S. decedents file to report certain transactions with foreign trusts, ownership of foreign trusts of rules 671-679 and receipts of large gifts and bequests from certain foreign persons.

A

Form 3520

37
Q

If you have interest in a foreign partnership what are the 4 categories that would require you to report form 8865.

A

50% or greater ownership
10% or greater of U.S. controlled corporation
Contributed property exceeding $100k or results in 10% ownership interest
Had a reportable event such as aquisitions, dispositions, or changes in proportinal interest.

38
Q

What is the normal due date of Form 1040?

A

15th day of the 4th months (4/15/2021).

This includes with respect to decendent or filed by the estate.

39
Q

What is the automatic extension of form 1040?

A

You have until the 15th day of the 6 month following year end if you live outside the U.S. or Puerto Rico due to main place of business or on-duty military service.

40
Q

What is a PTP?

A

A publicly trade partnership, an interest is traded on an established securities market, regardless of the # of partners.

41
Q

Withholding tax for PTP’s of foreign partners..

A

Any distribution to income to a foreign partner must pay withholding tax.

42
Q

What is form 1042?

A

Annual withholding tax return of U.S. source income of foreign persons of publicly traded partnerships.

43
Q

What is 1042 S?

A

Foreign persons U.S. source income subject to withholding to report withholding from distributions.

44
Q

Can you deduct losses to offset income from a PTP?

A

No, you can’t deduct the loss from income or other passive income activity. You must carry the loss forward when the PTP is profitable or when the taxpayer disposes their entire interest in the PTP.