Flashcards in Chapter 1 Section 1-2: Filing Status and Exemptions Deck (18)
What is the difference between an adjustment and a deduction?
Adjustment: above the line, to get to AGI. You can always take it, no matter what.
Deduction: below the line, to get to taxable income. They are added up and often restricted, and you can only take it when the aggregate exceeds the standard deduction.
What does an extension request extend?
For how long?
It only extends the time to file the paperwork. You still need to pay your taxes on April 15.
What date decides your filing status?
December 31. If you're single on 12/31, you're single on the return. If married on 12/31, you're married on the return.
What are the two situations in which you can file as single?
Single at year end
Legally separated at year end
What filing status do you use if your spouse died during the year?
Married filing joint
What status can you file in the years following the death of your spouse?
For how long?
What's the qualifier?
Qualifying widow with dependent child
Two years following death
You must maintain a household that was the principle place of abode for the qualifying dependent for the whole year.
Explain the head of household status:
What is the length of time the household must be maintained for?
Who can be the dependent?
You pay lower taxes if you maintain a household that is the principle residence of a dependent for more than half the year.
Dependent son or daughter: must live with you
Dependent parent: don't need to live with you (assisted living)
Dependent relative: needs to live with you. No cousins.
When can you not take a personal exemption for yourself?
When someone else can claim you
When can your spouse claim you when filing married filing separately?
When you have no income and you were not claimed as someone else's dependent
Can you take a personal exemption for someone who died or was born during the year?
Yes - take the full exemption
By what amount does the phase-out reduce personal exemptions?
By two percent for every $2,500 over the threshold
What are the requirements to take a dependency exemption for a qualifying child?
Residency and filing requirements
Eliminate gross income test
Support test changes
What are the requirements to take a dependency exemption for a qualifying relative?
Support (over 50%) test
Under a specific amount of taxable gross income test
Precludes dependent filing a joint tax return test
Only citizens/residents of North America
Relative test OR
Taxpayer lives with individual for whole year test
What is the age limit for a qualifying child?
19, or 24 if a full-time student
What is the residency requirement for a qualifying child?
Live with them for more than one half of the year
What is the support test for a qualifying child?
They can't provide more than 1/2 of their own support
What is the support test for a qualifying relative?
The taxpayer must have provided more than 1/2 of their support