Filing Status

Question 1

What are 5 filing status?

Answer 1

Married filing jointly, married filing separately, single, head of household, qualifying widow.

Question 2

When is marital status determined?

Answer 2

The last day of the taxable year.

Question 3

Is TP is legally separated, what is the filing status?

Answer 3

Single.

Question 4

Status when one spouse dies?

Answer 4

A joint return can be filed for the year of death.

Question 5

After the year of a spouse’s death, what will be the filing status for surviving spouse?

Answer 5

A surviving spouse may continue to use the rate for married filling joint for one more year (2 yrs total including the first year) if;

1. the spouse provides more than half of the cost of maintaining the household
2. for a dependent child (also step, adopted - foster child NOT included), who uses the home as a principal residence for the entire tax year.

Question 6

What does “maintaining the household” include?

Answer 6

Rent, mortgage, interest, taxes, home insurance, repairs, food consumed in the house, utilities, etc.

Question 7

Does “maintaining the household” include clothing? Education? Medical? Vacations and transportation? Rental value of the house”?

Answer 7

No.

Question 8

What are 4 criteria to be qualified for head of household status?

Answer 8

1. An unmarried person.
2. That provide more than half of the cost of maintaining the household.
3. For a qualifying child or a relative
4. Who uses the home as a principal residence for more than half the tax year.

Question 9

Head of household: is a qualifying relative rule the same as dependency relationship test?

Answer 9

No, this does not include non-relative living in the home for the entire tax year.

Question 10

Head of household: 2 exceptions to qualifying rules?

Answer 10

1. If the qualifying child is unmarried, the child need not qualify as a dependent - applies only when the parent has waived the dependency exemption so that it can be used by the non-custodial parent.
2. If the qualifying relative is a parent, the parent need not live with the TP, but still must provide more than 50% of the cost of maintaining the parent’s home.

Question 11

Can individuals of the same sex file married filing joint?

Answer 11

Yes, if they are legally married in a state that permits same sex marriage.

Question 12

Do those who are married legally have an option to choose filing status?

Answer 12

No, must file as married.

Question 13

Same sex marriage: what would be the filing status if they are married in the state that permits and now live in a state doesn’t permit?

Answer 13

The state where they got married determines the tax status - married.

Question 14

Can a dependent claim personal exemption?

Answer 14

No.

Question 15

Can a dependent claim any kind of deduction? Limit? How is the amount that is taxed at parents rate determined?

Answer 15

Yes, “mini” standard deduction - greater of;
$1,050 or earned income plus $350 (2016)..

This deduction is limited to regular standard deduction.

For 2017, the amount taxed at the parent’s rate is the unearned income in excess of $2,100.

Question 16

Who does kiddie tax include?

Answer 16

All children under 18.
Children who are 18, or between 19-23 who are full-time students, if their earned income does not exceed 50% of their total support for the year.

Question 17

Kiddie tax: how is it taxed?

Answer 17

Net unearned income in excess of a statutory amount ($2,100 for 2016) is taxed at the parents’ tax rate, while the remaining taxable income is taxed at child’s tax rate.

Question 18

Kiddie tax: example.

Unearned income: $2,250. Earned income: $250. What amount will be taxed at parents’ rate and child rate?

Answer 18

• 2,250+250=$2,500
• Mini deduction will apply; greater of $1,050 or earned income plus $350. Then, deduction is 1,050 (>250+350=600).
• 2,500-1,050=1,450 - taxable income.
• The excess of statutory amount for unearned income is 2,250-2,100(2016)=150 - taxed at parents’ rate.
• 1,450-150=1,300 - taxed at child’s rate.

Question 19

2017 standard deduction for each filing status?

Answer 19

Married filing joint: $12,700.
Head of household: $9,350.
Single: $6,350.
Married filing separate: $6,350.

Question 20

What is the circumstance that can increase standard deduction? Does this rule apply to dependents?

Answer 20

If TP is blind at year end or is at least age 65 ($1,300 - 2018).
No.

Question 21

Can spouses file jointly even if they have different tax years? Different accounting methods?

Answer 21

No.

Yes.