Key Definitions to KNOW Flashcards
Qualifying Child Test
CARES
C - Close Relative (children, step-children, siblings, step-siblings, legally adopted or foster children)
A - Age Limit (under age 19 or 24 for full-time college students that attended colllege at least 5 months)
R - Residency and Filing Requirements
E - Eliminate Gross Income
S - SUPORT Test (QC does not contribute more that half of his or her own support)
Qualifying Relative Test
SUPORT
S - Support Test (Taxpayer support more than half of QR)
U - Under Gross Income Limitation ($5,050)
P - Precludes Dependent Filing a Joint Return
O - Only Citizens of the U.S., Mexico, Canada
R - Relative (close + extended, no cousins or foster parents)
OR
T - Taxpayer Lives with the Individual (if Non-relative like a cousin or foster parent) for the Whole Year
What is an Qualified Trade or Business (QTB) and what is included?
A QTB is any business other than a specified trade or business (SSTB)
What is a Specified Trade or Business (SSTB) and what is included?
A SSTB is a business that have direct services like the following:
* Health
* Law
* Accounting
* Actuarial Science
* Investments
* Consulting
* Athletics
* Financial Services
What does MAGI include?
AEIOU
A - Adoption Exclusion
E - EE Bond Income
I - IRAs
O - Out of the U.S. Income (i.e. foreign income)
U - University Student Loan Interest
A taxpayers’s witholding is the lesser of…….
- 90% of current years tax; OR
- 100% of the prior years tax
UNLESS taxpayer had AGI > $150,000 - then 110% of the prior years tax
The primary difference between a Qualifying Surviving Spouse (Widow(er)) and Head of Household
A Qualifying Surviving Spouse has a dependent child that lived with taxpayer for a whole year
A Head of Household has a qualifying person that lived with taxpayer for more than half a year
How many years can a taxpayer file as a Qualifying Surviving Spouse?
2 years after spouse’s death
