individual tax issues

Question 1

Personal Exemptions

Answer 1

No personal exemption can be claimed for a taxpayer or spouse who is claimed on another tax return

• personal exemptions include taxpayer and spouse if MFJ
• Personal exemption is claimed on taxpayer’s final return even if taxpayer or spouse dies DURING return

Question 2

Dependency Exemptions

Answer 2

• applied on LAST day of tax year or the last day the dependent was alive.
• qualify as qualified child or relative
• –child= relationship, residence and age test along with joint return test/citizen/50% of support

Question 3

qualifying relative

Answer 3

anyone who lives with the taxpayer the entire year

- common relatives except for cousins who get 50% or more support from taxpayer

Question 4

Gross income test- relative

Answer 4

dependents gross income must be less than the exemption amount ($4,000 for 2015)..
income that is taxable^^

two exceptions for child/stepchild if under the age of 19 or 24 and a full time student

Question 5

Deemed distribution

Answer 5

SE tax in determining SE income cantake a deemed deduction of 7/65% for income taxes