Filing Requirements - Preliminary Work Flashcards
3 Reasons to Compare Prior returns to Current Year Returns
Prevents errors
Identify significant changes
Identify uncommon items
4 Typical Uncommon Items to look for on new returns
Sale of principal residence
Retirement Pay
Itemized Deductions
Applicable Taxes
6 Items Needed from Prior Return to Complete Current Return - GASSFC
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.
Taxpayers correspondence with the IRS will show issues that will affect the current year return.
3 reasons to review?
AJA
Compliance with prior audits, adjustments and judgements.
4 items of taxpayer personal information that needs to be reviewed to verify the identity of individuals to process the tax return.
DOB, age, marital status and dependents.
3 reasons the age of individual is important to review
Additional deductions, retirement distributions, dependency.
What affect does Married filing jointly have on deductions?
Increases beneficial dollar limit for deductions and credits
What should you obtain to verify the identity of an individual?
State issued ID.
What are the types of taxes that can belong to an individual..
Income tax, withholding estimated tax, FICA self employment tax, FUTA, AMT, Estate tax, gift tax, GST
What are the 2 classifications of a non US citizen called for tax purposes?
Non-resident alien, resident alien
2 types of tests to determine if an individual is a non-resident alien or a resident alien
Green card test and substantial presence test.
What is the difference between a non resident alien and a resident alien?
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.
When does a dual status alien occur?
Occurs when a person first comes to the United States or leaves the United States and they had residency in two jurisdictions.
What can a dual status alien choose for tax purposes?
Whether to be taxed as resident alien or a non-resident alien.
Determine if a tax payers needs to file a return, gross income includes..
Any income that can be excluded as foreign income or a foreign housing amount.
T/F: Income, estate and gift tax returns, paying estimated tax are generally the same for U.S. and resident aliens.
True: whether they are living in the United States or abroad.
T/F: Income, filing status and age generally determine whether a U.S. citizen or resident alien needs to file a tax return.
True