R1 Flashcards
If Tax payer’s spouse dies during the year, What is his filing status
His filing status is MARRIED FILING JOINTLY. The surviving spouse in considered to be married for the entire year. (against the general rule)
How does one qualify for Surving spouse/ Qualifying Widower?
1)the taxpayer has a child that can be claimed as a dependent. 2)Dependent lived in his home for the entire tax year 3)Taxpayer payed over haldf of the dependent’s living expenses. 4) The taxpayer could have filed a joint tax return in the year spouse died.
If a married couple file separate returns, could one spouse claim the other spouse for an exemption?
Yes! If the other spouse has no gross income and not claimed on someone else return.
do relatives have to live with the taxpayer in order to claim as a dependent?
No! Only non-relatives have to also live with the tax payer to be considered dependent.
For payments to be considered alimony…
Are damages for Personal Injury included in gross Income? ie. Workers comp for job related injuries
No, they a re specifically excluded from Gross Income
How are Federal Income tax Refunds treated? Taxable?
Refunds themselves are not taxable; however, their interest income is taxable.
A Premature Distribution from an IRA usually results in a BLANK% Penalty? Except when? (nemonic)
10%!!
HIM DEAD
Home buyer (1st time) $10,000 max
Insurance (Medical)
Medical expenses in excess of 10% AGI
Disability
Eeducation
And
Death
Alimony
What form of compensation is included in Gross Income?
Cash and CAsh Equivalents (Ie. paying bills on behalf of the spouse)
Tax Benefit rule
When I recieve a refund for an expense that i deducted last year. I have to record the refund as income for the current year.
Ie. State taxes are fully deductable, but then I recieve a refund the next year! The refund is included in this years income.
1) What is a non-accountable Plan?
1) expenses are not reported to the employer. So the amount recieved by the employee from the employer has to be included in the employee’s wages (W2). Any expenses that the money was used for are treated as miscilaneous itemized deductions. subject to the 2% AGI Limitation.
Until what age are withdrawals from a traditional IRA penalized?
59.5
The Uniform of Capitalization rules:
1) Costs required to be capitalized
2) Not required to be capitalized
Is pre-paid rental included in gross income?
yes!
are propery settlements taxable?
no!
