Individual Taxation - Exemptions

Question 1

Is the exemption for a spouse a personal or a dependency exemption?

Answer 1

The exemption for a spouse is always considered a personal exemption, even if the spouse does not work

Question 2

When can a married taxpayer filing separately claim their spouse’s personal exemption?

Answer 2

When the following two conditions are met:

1. The taxpayer’s spouse has no income; and
2. The taxpayer’s spouse was not claimed as a dependent of another taxpayer

Question 3

What are the two categories of dependency exemptions?

Answer 3

a. Qualifying Child (“CARES”); or

b. Qualifying Relative (“SUPORT”)

Question 4

What requirements must be met to satisfy the “Qualifying Child” dependency exemption?

Answer 4

“CARES”:

a. Close relative
b. Age Limit (19-24)
c. Residency and filing requirements (same principle residence for more than half a year)
d. Eliminate gross income test
e. Support test changes (has been eliminated)

Question 5

What requirements must be met to satisfy the “Qualifying Relative” dependency exemption?

Answer 5

“SUPORT”:

a. Support test (taxpayer supplied more than 50% of support)
b. Under exemption amount of taxable gross income
c. Precludes dependent filing a joint return
d. Only citizens of the US or residents of the US, Mexico or Canada
e. Relative
f. Taxpayer lives with individual the whole year (if non-relative)

Question 6

What are the two ways to gain an increased standard deduction?

Answer 6

a. Being old (65 and older)

b. Being blind