Unit 2 - Determining Filing Status and Residency

Question 1

What is the eligibility to file as Married Filing Jointly?

Answer 1

Both spouses must agree to file a joint return.
They are eligible if they are married as of December 31 and live together as husband and wife or legally married same sex couple, married under common law, live apart but not legally separated or divorced, or are separated but divorce is not finalized

Question 2

How can a widowed taxpayer elect the MFJ status?

Answer 2

If she doesn’t remarry at the end of the year the spouse dies

Question 3

How can a US citizen or US resident married to a nonresident alien elect to file a joint return?

Answer 3

Both must agree to file to be taxed on their worldwide income

Question 4

What are the reasons for filing separately?

Answer 4

to not be liable for the spouse’s taxes owed or to avoid a refund offset on the spouse’s other debt obligations

Question 5

What is the rule to change filing status from married filing jointly to married filing separately and what is the exception?

Answer 5

Changes can’t be made after the due date. An exception is for a deceased taxpayer’s representative to change the filing status for up to a year after the deadline

Question 6

what is the rule to change filing status from separate returns to married filing jointly?

Answer 6

You have within three years of filing date to file 1040x (excluding extensions)

Question 7

How are civil unions and registered domestic partnerships treated for IRS purposes?

Answer 7

They are not recognized by IRS, therefore must fie as single

Question 8

What are the requirements to meet Head of Household Status?

Answer 8

The taxpayer must be single, divorced, legally separated, or “considered unmarried”
Must pay more than half the cost of expenses of keeping up the home
Must have a qualifying person living more than half the year

Question 9

What conditions must be met to be considered “unmarried” for HOH status?

Answer 9

must file a separate return, bear more than half the expenses and maintain the residence of a qualifying child, stepchild, or foster child for more than half the year
not live with the spouse the last six months of the year
able to claim exemption for the child

Question 10

What expenses are used to determine if a taxpayer pays more than half the cost of maintaining a home?

Answer 10

Rent, mortgage interest, property taxes
home insurance, repairs, utilities,
food eaten at home

Question 11

What is a qualifying person for Head of household?

Answer 11

must be related to the taxpayer by blood, adoption, marriage, or government placed foster child

Question 12

What is a qualifying person defined?

Answer 12

a qualifying child, married child who can be claimed as a dependent, or a dependent parent

Question 13

What is the exemption relating to head of household for divorced or noncustodial parents?

Answer 13

a custodial parent can claim head of household without claiming a qualifying child as a dependent by releasing the dependency exemption to the noncustodial parent

Question 14

How can a taxpayer claim head of household if the qualifying child is born or dies during the year

Answer 14

They must have provided more than half the cost of keeping up th emain home while the child is alive

Question 15

How can a taxpayer file head of household for a qualifying parent?

Answer 15

they have to pay have the cost of the main home of the parent for the entire year but the parent doesn’t have to live with them

Question 16

What is the unique rule applied to a taxpayer who is married to a nonresident alien spouse?

Answer 16

The taxpayer can file head of household even if they lived together throughout the year but must elect the spouse as a resident and have a qualifying dependent/person such as a child or parent

Question 17

What is the rule to claim as Qualifying Widower filing status?

Answer 17

the status can be used for two years after the spouse’s death if he has a qualifying child

Question 18

What is the eligibility requirement to be a qualifying widower?

Answer 18

not remarried by the end of the year
eligible to find a joint return in the year the spouse died
have a qualifying child, except for a foster child
furnished over half the cost of keeping up the child’s home for the entire year

Question 19

How does an annulment affect taxpayer’s returns?

Answer 19

Taxpayers must file an amended return correcting their status for the tax years affected

Question 20

What is an “alien” and how are they classified?

Answer 20

An alien is an individual who is not a US citizen classified as resident or nonresident aliens

Question 21

how are resident aliens taxed?

Answer 21

taxed on worldwide income

Question 22

how are nonresident aliens taxed?

Answer 22

US sourced income and any trade or business related income

Question 23

What residency tests must be met to be a resident alien?

Answer 23

the green card test and substantial presence test

Question 24

What is the green card test:

Answer 24

The individual must have been a lawful immigrant any time during the year and was issued an alien registration or green card

Question 25

What is the substantial presence test?

Answer 25

you must be physically present in the US for at least 31 days in the current tax year and 183 days during the 3-year period, which includes the current year and the two years immediately preceding the current year, counting all the days present in the current year, and 1/3 of the days you were present in the first year before the current year, and 1/6 of the days you were present in the second year before the current year

Question 26

What are exceptions to the presence test?

Answer 26

days commuted to work in the US from a residence in Canada or Mexico
days in the US for less than 24 hours
Days as a crew member of a foreign vessel
Days unable to leave the US due to medical conditions
a professional athlete to compete in a charitable sports event
foreign government-related individuals in the US temporarily
teachers on temporary visas
visiting scholars or researchers
students on temporary visas

Question 27

What are the exemptions for International Students and Scholars holding specific visas regarding substantial presence test?

Answer 27

They are exempt from the substantial presence test for the first five calendar years. Any part of the year counts as a full year

Question 28

What is 2019 filing threshold for Single status?

Answer 28

$12,200; $13,850 for 65 or older

Question 29

What is the 2019 filing threshold for Head of Household?

Answer 29

$18,350; $20,000 for 65 or older

Question 30

What is the 2019 filing threshold for Married Filing Jointly

Answer 30

$24,400; one spouse 65 or older $25,700; two spouses $27,000

Question 31

What is the 2019 filing threshold for married filing separately

Answer 31

$5

Question 32

What is the 2019 filing threshold for qualifying widower with dependent child?

Answer 32

$24,400; $25,700 for 65 or older

Question 33

What is the filing threshold for self-employment income

Answer 33

$400 or more

Question 34

What is “earned income”?

Answer 34

taxable income received such as wages, salaries, tips, other employee compensation, self-employment income, and taxable scholarships

Question 35

What are the filing requirements for dependents under 65?

Answer 35

Unearned income over $1100, earned income over $12,200; or the gross income was more than the larger of: $1100 or their earned income (up to $11850) plus $350

Question 36

What other conditions should a taxpayer file a tax return even if not legally required?

Answer 36

had income withheld
made estimated tax payments or had prior year overpayments
qualifies for earned income tax credit, or
qualifies for any other refundable tax credits

Question 37

What are additional filing requirements even if the threshold is not met?

Answer 37

$108.28 or more as a church employee
SS or medicare tax on tips not reported to employer
if you must pay the alternative minimum tax
If taxpayer owes additional tax in connection with a qualified plan, IRA, or health savings account, or another tax-favord health plan
If the taxpayer received a Medicare Advantage MSA, Archer MSa, or health savings accounting distribution
household employment taxes for a household worker
recapturing an education credit, investment credit, or other credit
if the taxpayer received advance payments of the premium tax credit for himself, spouse, or a dependent who enrolled in a coverage through the Health Insurance Marketplace