Individual Tax

Question 1

Dependents - Qualifying Child

Answer 1

1. Relationship Test (includes siblings, brothers, sisters, nieces, nephews)
2. Residence Test - must have same principal residence for >1/2 of the tax year
3. Age Test - less than 19 at end of tax year, or 24 if a full-time studenf ro 5 months+
4. Joint Return test - if married, cannot be claimed if filing a joint return, unless no tax liab.
5. Citizenship/residency test - must be a US citizen or reisent, or a resident of canada or mexico
6. Not self-supporting - must not provide more than 50% of his own suppor

Question 2

Dedpendents - Qualifying Relative

Answer 2

1. Relationship test - common relatives, except cousins, or any TP who lived in the TPs home for the entire year
2. Support test - TP must provide more than 50% of the dependents’ total support
3. Joint Return Test - if married, cannot be claimed if filling a joint return, unless there is no tax liab
4. Citizenship/residency test - must be a US citizen or resident, or a resident of Canada or Mexico
5. Gross Income Test - Gross income must be less than the exemption amount for the year ($3,950 in 2014), excludes SS payments
   
   1. Exception for a child/stepchild who is <19 or <24 for full time student

Question 3

Filing Status - Married

Answer 3

Married

• status as of last day of taxable year
• If spouse dies, joint return filled in year of death, surviving spouse (qualifying widower) can be used for 2 years after if:
  
  • spouse provides more than 1/2 the cost of maintaining the household
  • for a dependent child
  • who uses the home as a principal residence
• Abandonded Spouse - Married TP allowed to file as unmarried if:
  
  • TPs spouse has not lived in the home for the last 6 mo of calendar year
  • TP provides more than 1/2 cost of maintaining a home for self and a ependent child
    *

Question 4

Head of Household

Answer 4

• TP is unmarried
• Provides more than 1/2 the cost of maintaining the household
• for a qualifying child or relative
• Who uses the home as a principal residence for >1/2 of the tax year
• 2 Exceptions:
  
  • If the qualifying child is unmarried, the child need not qualify as a dependent
  • If the qualifying relative is a parent, the parent need not live in the TPs home, but the TP must provide more than 50% of the cost to maintain the relative’s home

Dependent

Live in Home

Child

No

Yes

Parent

Yes

No

Question 5

“Mini” Standard Duduction

Answer 5

• If a dependent on another return, but required to file his own return
• no personal exemption allowed
• Standard deduction limited to $1,050 or earned income + $350 (limited to regular std deduction)

Question 6

Kiddie Tax

Answer 6

• All children under 18
• Children who are between 19 and 23 if full-time students and their income does not exceed 50% of their total support
• Net undearned income in excess of a statutory amount is taxed at the parent’s tax rate, remaining is taxed at child’s rate