VITA Tax Flashcards
What three factors should you consider when determining if someone must file a tax return?
1) Filing status
2) Age
3) Gross income
T or F: When it is not required, a taxpayer should never file a tax return.
False, sometimes even it is not required, it is still beneficial to file a tax return if they are eligible for credits.
What are the different filing statuses?
1) Single
2) Married filing jointly
3) Married filing separately
4) Head of household
5) Qualified surviving spouse (QSS)
What are the two most beneficial filing statuses for taxpayers?
Married filing jointly and Qualified surviving spouse
What requirements must be met to file as single?
On the last day of the year:
(1) Not married
(2) Legally separated or divorced
(3) Widowed before the beginning of the tax yr and didn’t remarry
What requirements must be met to file MFJ?
On the last day of the year:
(1) Married & live together
(2) Live apart but not legally separated/divorced
(3) Didn’t remarry after spouse died during year
What are the downsides to MFS?
- Taxes are higher
- Loss of tax credits
- 85% of Social Security receipts taxed
- If one spouse itemizes, so does the other
What requirements must be met to file HOH?
- File separate return from spouse
- Live apart during last 6 mo of the yr
- Paid more than 50% of home costs
- Had qualifying person living w/ them for more than half of yr
What are the requirements to file as QSS?
- Available f/ 2 years following year of spouse’s death
- Taxpayer uses MFJ for year of spouse’s death
- Dependent child lives w/ taxpayer all yr and paid for 50% of home costs
What is an exemption as it refers to tax returns?
A dollar amount that can be deducted from an individual’s total income.
In order to claim personal exemptions, the taxpayer and their spouse __________ be claimed as a dependent on another’s return.
cannot
T or F: If a couple is filing MFJ and one of them can be claimed as a dependent on another person’s tax return, they do not have to disclose that information.
False, they must still indicate on their return that they can be claimed as a dependent.
How do you calculate the qualified expenses for the AOC?
1098T Box 1 - Box 5 + any text book fees.
On the 1099R is they have a distribution code ____ then they’re income is treated as earned income and might receive EIC.
3
T or F: EIC is refundable.
True
