REG 1 Individual Taxation: Filing Status

Question 1

How do you get to taxable income AND tax due or refund?

Answer 1

Gross Income
- Adjustments
= Adjusted Gross Income
- Standard Deduction OR Itemized Deduction
- Exemptions
= Taxable Income

Federal Income Tax
- Tax Credits
Other Taxes
- Payments
= Tax Due or Refund

Question 2

What items are included in gross income?

Answer 2

Wages
Interest
Dividends
State Tax Refund
Alimony Received
Business Income
Capital Gain/Loss
IRA Income
Pension and Annuity
Rental Income/Loss
K-1 Income/Loss
Unemployment Compensation
Social Security Benefits
Other Income

Question 3

What are included in adjustments?

Answer 3

Educator Expenses
IRA
Student Loan Interest Expenses
Tuition and Fee Deduction
Health Savings Account
Moving Expenses
One-Half Self-Employment FICA
Self-Employed Health Insurance
Self-Employed Retirement
Interest Withdrawal Penalty
Alimony Paid

Question 4

What do itemized deductions include?

Answer 4

Medical (in excess of 10% of AGI)
Taxes - State/Local (Income/Sales & Property)
Interest Expense (Home & Investment)
Charity (Up to 50% of AGI)
Casualty/Theft (in excess of 10% of AGI)
Miscellaneous (in excess of 2% of AGI)
Other Miscellaneous

Question 5

What is the exemption for 2015?

Answer 5

$4,000 * Taxpayer

          * Spouse
          * Dependents

Question 6

When is the due date to file, and what is the automatic extension?

Answer 6

April 15

6-month (Oct. 15) An extension to file, not for the payment of any taxes owed (that date remains April 15)

Question 7

What is a qualifying Widow(er) and how are they entitled to a dependency exemption?

Answer 7

A taxpayer who may use the joint tax return standard deduction and rates (but not exemption for deceased spouse) for each of the two taxable years following the year of death.
Must maintain a household for the Whole taxable year as the principal place of abode of a son, stepson, daughter, or stepdaughter whether by blood or adoption.

Question 8

How do you qualify as Head of Household?

Answer 8

Not married, legally separated, or married but lived apart 6 months at close of tax yr.; not a qualifying widow(er); not a nonresident alien; maintains their home a household for more than Half the taxable yr. as the principal residence of a dependent son or daughter (or descendant), a father or mother, or a dependent relative.

Question 9

What are the rules to qualify as a dependent for the head of household?

Answer 9

Dependent son or daughter or descendent: Must live with taxpayer; Father or Mother: not required to live with taxpayer but they must maintain a home that was the principal residence of the parent for the entire yr. (contributing over half the cost of upkeep); And Dependent relatives: must live with taxpayer (cousins, foster parents, and unrelated dependents do not qualify).