M1 Filing Requirements, Filing Status and Exemptions

Question 1

What is the basic tax formula?

Answer 1

Gross Income

AGI

Taxable Income

Other taxes (i.e. Self-Employment)

Tax Due OR Refund

Question 2

Who must file a tax return? A Taxpayer must file a tax return if his or her income is greater than or equal than the sum of? (3 things)

Answer 2

1) personal exemption
2) PLUS regular standard deduction
3) PLUS additional standard deduction for taxpayers age 65 or older or blind

Question 3

Exceptions to who must file a return - Individuals whose net earnings from self-employment are what amount?

Answer 3

$400 or more

Question 4

What date decides your filing status?

Answer 4

December 31st of the current tax year

Question 5

Two rules to file as a qualifying widow(er) with Dependent Child (pass key / mnemonic)

Answer 5

1) Two years after the spouse’s death
2) Principal residence for the dependent child for the WHOLE year

*PASS KEY:
W = Widow = WHOLE year

Question 6

4 Conditions to file Head of Household (pass key)?

Answer 6

1) NOT married, legally separated or is married but has lived apart from his/her spouse for the last six months of the year.
2) not a qualifying widow(er)
3) not a nonresident alien
4) Principal residence of a qualifying person for more than HALF the year

*PASS KEY:
H = Head of household = HALF year

Question 7

Summary of Who Meets Qualifying Person Requirement:
Qualifying Dependent Lives with TP
Child or Descendant
Parents
Relative

Answer 7

Qualifying Dependent Lives with TP
Child or Descendant YES YES (H)
Parents YES NO
Relative YES YES

Question 8

Exemption types?

Answer 8

Personal (if joint, one per person)
Spouse as person on separate return (IF spouse has NO gross income and spouse was not claimed as dependent for another TP)
Dependency Exemptions (qualifying child and qualifying relative)

Question 9

Dependency Exemptions. What are the requirements for a qualifying child (MNEMONIC)

Answer 9

CARES
C = Close Relative
A = Age Limit (under 19 or 24+ full time student)
R = Residency (more than HALF year) and filing
requirements
E = Eliminate gross income test
S = Support test changes - requirement that child
contributing over 1/2 support is ELIMINATED

Question 10

Dependency Exemptions. What are the requirements for a qualifying relative (MNEMONIC)

Answer 10

SUPORT
S = Support (over 50% test)
U = Under a specific amount of gross income (less than
exemption amount ie. 2017 $4,050)
P = Precludes dependent filing a joint tax return
O = Only citizens (residents of US, Canada or Mexico)
R = Relative test OR
T = Taxpayer lives with individual for WHOLE year

Question 11

Multiple support agreements. What is the percentage must contribute in order to be able to claim him/her?

Answer 11

10%
Only one person can claim the person
Joint contributors must file multiple support declaration (form 2120)

Question 12

There is an increased standard deduction for who? (2)

Answer 12

Age 65 or older

Blind