Filing Status Flashcards
What are the 5 types of filing statuses?
- Single
- Married filing jointly
- Married filing separately
- Head of household
- Qualified Widower with dependent
Why is filing status important?
Filing status impacts the calculation of income tax, affects the amount of the standard deduction, and determines allowance or limitation of certain credits and deductions.
Taxpayers generally considered to be unmarried for the entire year if on the last day of the tax year they were:
- Unmarried
- Legally separated from their spouse under a divorce or separate maintenance decree
Who governs whether taxpayers are married or legally separated under a divorce or separate maintenance decree?
State law governs whether taxpayers are married or legally separated under a divorce or separate maintenance decree.
Taxpayers are considered to be married for the entire year if they are what?
• They were married on the last day of the tax year, or
• The spouse died during the year and the surviving spouse has not remarried
Taxpayers can use the Single filing status if, on the last day of the tax year, they were considered what?
• Not married
• Legally separated or divorced, or
• Widowed before the beginning of the tax year and did not remarry
Can Single taxpayers qualify for another status?
What does that mean for them if they can qualify for another status?
Some single taxpayers qualify for Head of Household or for Qualifying Widow(er) with Dependent Child status, which can mean a lower tax.
What is Married Filing Jointly?
Married taxpayers who choose to file a joint return will use one return to report their combined income and to deduct combined allowable expenses.
Can married taxpayers select Married Filing Jointly even if one of the spouses did not have any income or deductions?
Yes, married taxpayers can select this status even if one of the spouses did not have any income or any deductions.
The Married Filing Jointly status can be claimed by taxpayers who, on the last day of the tax year were? (4)
• Were married and lived together.
• Were married and living apart, but were not legally separated under a divorce or separate maintenance decree.
• Were common law married pursuant to the laws of the state in which they live (or in the state where the common law marriage began) and the marriage has not been dissolved, such as by death or divorce.
• Are the surviving spouse who did not remarry before the end of the tax year (surviving taxpayer can file a joint return with the deceased spouse).
What are the responsibilities of each taxpayer on a joint return?
Both taxpayers must include all worldwide income on their joint return
Who is responsible for all the tax and any interest or penalty due on a Married Filing Jointly return?
They each may be held responsible for all the tax and for any interest or penalty due, even if all the income was earned by only one spouse.
Does a subsequent divorce relieve either spouse of the liability associated with the joint return?
No, a subsequent divorce usually does not relieve either spouse of the liability associated with the joint return.
What is Married Filing Separately status and who reports the income and deductions on their tax returns?
The Married Filing Separately status is for taxpayers who are married, and either:
• Choose to file separate returns, or
• Cannot agree to file a joint return
Taxpayers who file as Married Filing Separately each report their own income and deductions on separate returns.
Why are taxes usually higher for Married Filing Separately and give an four examples?
Special rules apply to Married Filing Separately taxpayers, which generally result in a higher tax. For example, when filing separately:
• The tax rate is generally higher than on a joint return.
• Taxpayers cannot take the child and dependent care credit, earned income credit, education credits, and certain other benefits and credits.
• Some credits and deductions, such as the child tax credit and the retirement savings contributions credit, are reduced at income levels that are half those for a joint return.
• If a taxpayer is Married Filing Separately and the spouse itemizes deductions on their return, the taxpayer must itemize and cannot take the standard deduction.
What are the 9 states that are considered Community Properties?
Are there special rules for taxpayers who live in community property states?
The income of taxpayers who lived in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin are considered community properties.
Yes, during the tax year, those who choose to file separate returns may be considered separate income or community income for tax purposes. Each state has its own community property laws, which may affect the amount of tax owed by taxpayers.
If filing jointly generally results in the lowest total tax, what are two reasons why married taxpayers may want to file separately?
- Married taxpayers sometimes choose to file separate returns when one spouse does not want to be responsible for the other spouse’s tax obligations, or because filing separately may result in a lower total tax.
- Another common reason taxpayers file as Married Filing Separately is to avoid an offset of their refund against their spouse’s outstanding debts. This includes past due child support, past due student loans, or a tax liability the spouse incurred before they were married.
For example, if one spouse has high medical expenses, separate returns may result in lower total taxes because a lower adjusted gross income allows more expenses to be deducted.
If married taxpayers want to file separately, and a potential refund offset is the reason, what form do they file to file a joint return?
Form 8379
Who is considered to be an injured spouse?
When a joint return is filed and only one spouse owes a past-due amount, the other spouse can be considered an injured spouse.
The injured spouse:
- Must not be legally obligated to pay the past-due amount, and
- Must have made and reported tax payments (such as federal income tax withheld from wages or estimated tax payments), or claimed a refundable tax credit
Both of these conditions must apply unless the injured spouse lived in a community property state at any time during the tax year.
What happens to the surviving spouse if their spouse died during the tax year?
Taxpayers whose spouses died during the tax year are considered married for the entire year, provided they did not remarry. The surviving spouse is eligible to file as Married Filing Jointly or Married Filing Separately.
What form does a taxpayer file to claim Injured Spouses status?
Form 8379
What rules apply to injured spouses who live in community states?
In community property states, the injured spouse must meet only the first condition. If the taxpayer meets these requirements, Form 8379 can be e-filed with the joint return.
What are the filing status of both parties if the surviving spouse remarries before the end of the tax year?
Surviving spouses who have remarried must file with the new spouse, either jointly or separately. The deceased spouse’s filing status becomes Married Filing Separately.
How can taxpayers qualify for Head of Household filing status?
Taxpayers may qualify for the Head of Household filing status, if they:
• Are unmarried or “considered unmarried” on the last day of the tax year, and
• Paid more than half the cost of keeping up a home for the required period of time, and
• Had a qualifying person living in their home for more than half the year (except for temporary absences, such as school)
Does a taxpayer’s dependent parent have to live with them to be considered a qualifying person?
No, a qualifying person who is the taxpayer’s dependent parent does not have to live with the taxpayer.
However, the parent(s) must qualify as the taxpayer’s dependent(s) for the taxpayer to qualify as Head of Household without using the multiple support provision (Form 2120, Multiple Support Declaration
What are the costs of keeping up a home?
The costs of keeping up a home include expenses such as
rent,
mortgage interest,
real estate taxes,
insurance on the home,
repairs, utilities,
and food eaten in the home.
Under proposed regulations, a taxpayer may treat a home’s fair market rental value as a cost of maintaining a household instead of the sum of payments for mortgage interest, property taxes, and insurance.
Who is a qualifying person for Head of Household status?
• A qualifying child who is single (whether or not the child can be claimed as a dependent)
• A married child who can be claimed as a dependent
• A dependent parent
• A qualifying relative who lived with the taxpayer more than half the year, and is one of the relatives listed on the chart, and can be claimed as a dependent by the taxpayer
What would happen if no one provides more than half the support on an individual?
Sometimes no one provides more than half of the support of an individual. Instead, two or more persons, each of whom would be able to claim the individual as a dependent but for the support test, together provide more than half of the individual’s support.
What is the percentage of support an individual must provide when no one provides more than half of the support of an individual and two or more persons, each of whom would be able to claim the individual as a dependent but for the support test, together provide more than half of the individual’s support?
When this happens, a person who individually provides more than 10% of the individual’s support can claim the individual as a dependent by agreement
Is an individual who is claimed as a dependent only because of a multiple support agreement a qualifying person for Head of Household status?
An individual who is claimed as a dependent only because of a multiple support agreement is not a qualifying person for Head of Household status.
What are the advantages of filing as Head of Household?
The Head of Household filing status provides a higher standard deduction and, generally, a lower tax rate than Single or Married Filing Separately
Who can be “considered unmarried” for Head of Household?
Married taxpayers may be “considered unmarried” and file as Head of Household if they:
• File a return for the tax year separate from their spouse.
• Paid more than half the cost of keeping up their home.
• Lived apart from their spouse during the entire last six months of the tax year. The spouse is considered to have lived in the home even if temporarily absent due to special circumstances, such as military service or education.
• Provided the main home for more than half the year of a dependent child, stepchild, or foster child placed by an authorized agency. This test is also met if the taxpayer cannot claim the exemption only because the noncustodial parent can claim the child using the rules described in Publication 17
Who is a Qualifying Widow(er)?
Taxpayers who do not remarry in the year their spouse dies can file jointly with the deceased spouse. For the two years following the year of death, the surviving spouse may be able to use the Qualifying Widow(er)
filing status. To qualify, the taxpayer must:
• Be entitled to file a joint return for the year the spouse died, regardless of whether the taxpayer actually filed a joint return that year.
• Have had a spouse who died in either of the two prior years. The taxpayer must not remarry before the end of the current tax year.
• Have a child, stepchild, or adopted child who qualifies as the taxpayer’s dependent for the year or would qualify as the taxpayer’s dependent except that he or she does not meet the gross income test, or does not meet the joint return test, or except that the taxpayer may be claimed as a dependent of another taxpayer.
• Live with this child in the taxpayer’s home all year, except for temporary absences.
• Have paid more than half the cost of keeping up the home for the year.
