R1 - big topic 2/3 - individual tax - exemptions

Question 1

Exemptions - 1. Personal Exemptions

Answer 1

Goal of personal exemptions - is indexed annually for inflation.

Personal exemptions 只能被一人使用

Married

• each spouse has personal exemption
• spouse can fill other spouse exemption if: 1) other has no income 2) other’s exemption has not been used.

Birth and death - still can use exemptions for the entire year

Question 2

Exemptions - 2. Dependency Exemptions

Answer 2

Qualified Children (CARES)
C - Close relatives
A - Ages (19 - general or 24 - if go to college)
R - Residency (same principal place as the taxpayer for more than 1/2 year)
E - Eliminate Gross income test
S - Support test changes (child didnt support more than 50% of his own support)

Qualifying Relatives (SUPORT)
S - Support test (taxpayer must support 50% +)
**multiple support agreements -> only one can claim exemption. and contributor must support 10%+.
U - Under exemption amount of taxable gross income
** tax-free income is okay.
P - Precludes dependent filing a joint return
O - Only us citizen
R - relative
or
T - nonrelative lives with taxpayer for whole year