Tax implications of special circumstances Flashcards
Payments are classified as all alimony only if the following conditions are satisfied?
Payments are made in cash: checks money orders to third-party on behalf of spouse includes payments for medical expenses, life insurance premium, housing cost taxes, tuition, and so forth
Payee and payer are not members of the same household
No liability to make the payments for any period after the death of the payee
Payments are made directly to the payee spouse or to the third-party for direct benefit of the payee spouse
Is child support Included in the taxable income of the payee and is it deductible by the payer
Not included in taxable income of the payee, and it is not deductible by the Payor
If payments to a former spouse are reduced when the child receives a certain age, Marries or dies, the amount of the reduction is presumed to be what?
Child support with the remainder being considered alimony
What is the kiddie tax?
Applies to unearned income of a dependent child who has not attained age 19 before the close the tax year or a full-time student who has not attain age 24 before the close of the tax year
Dependence, honored income is taxed at the parents top marginal tax bracket
Total unearned income will be reduced by what amount in arriving at the amount of subject to the kiddie tax?
$2600 (2024)
Where there is earned income for the child, the standard deduction becomes the amount of earned income plus $400 when figuring out the kiddie tax, what is the standard deduction for 2024 on a child’s income?
14,600
Look at the following example of how to calculate the Kiddie tax when there is earned and unearned income
