Individual Taxation: Filing Requirements Flashcards
What is the filing requirement (threshold) for an individual filing single?
Single filer:
income > $12,000, or net SE income >$400
(The filing requirement for the 1040 is
always that income is greater than the taxpayers standard deduction)
What is the filing requirement (threshold) for an individual filing head of household?
Head of household:
income > $18,000, or net SE income >$400
(The filing requirement for the 1040 is
always that income is greater than the taxpayers standard deduction)
What is the filing requirement (threshold) for an individual filing married filing jointly?
Married filing jointly:
income > $24,000, or net SE income >$400
(The filing requirement for the 1040 is
always that income is greater than the taxpayers standard deduction)
What are the Kiddie Tax rates?
Kiddie Tax rates = Trust Tax rates
24%, 35%, 37%
(If a child has unearned income above certain thresholds is subject to the kiddie tax)
What is the triggering threshold for the Kiddie Tax?
The Kiddie Tax would apply to a child’s unearned income that is:
> $2,100
When do you Recognize Income and Recognize Deductions under the Cash Basis of accounting?
Recognize Income: When cash or property is received, at FMV
Recognize Deductions: When cash is disbursed or expenses are charged to a credit card
Is prepaid interest deductible for a cash basis taxpayer?
Prepaid interest is not deductible. It must be amortized over the period which it applies to
When do you Recognize Income and Book Expenses under the Accrual Basis of accounting?
Recognize Income: In the period when it is earned
*Unearned Income must also be recognized
Book Expenses: In the period when it is incurred
What does “Constructively Received mean” and to whom does it apply?
Constructively Received = payment has been available to the taxpayer, and the taxpayer has an unrestricted right to it
