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20 Cards in this Set
- Front
- Back
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What are the penalties for not filing or not paying taxes?
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Failure to file=5% of tax liability per month to max of 25%. If more than 60 days, min penalty is $135.
Failure to pay = .5% per month (25% for 50 months). If both failure to file and failure to pay apply, failure to file penalty is reduced by failure to pay penalty but both penaltys will be accessed. |
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How much taxes must you pay in order to avoid a penalty?
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Must pay 90% of current years tax liability or 100% of tax liability shown on preceding year if AGI is $150K or less. If AGI is greater than $150K must pay 110% of prior years tax liability
Must make estimated tax payments if TP expects to owe $1K or more |
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How much of social security is taxed?
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The maximum that may be taxed is 85%. There are thresholds four taxation: @50% S=$25K-$34K; MFJ=$32K-$44K
Based on provisional income (inludes tax exempt interest and foreign income plus 1/2 of SS |
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What is the TCMP
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Tax Compliance Measurement Program-randomly selected returns used for statistical purposes by IRS to develop discriminant analysis standards
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What are the three types of IRS audits
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field, correspondence and office
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How much is the accuracy related or negligence penalty
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20%
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How does one qualify for innocent spouse relief
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file a joint return, ignorant of understatements, unfair to hold spouse liable
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What is equitable relief
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If an individual does not qualify for innocent spouse relief, he can still be relieved of responsibility for tax, interest and penalties through equitable relief. This can be done if the individual and the spouse did not transfer assets to one another as part of a fraudulent scheme and the relief item must be attributable to other spouse
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What is the affordabe care act
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mandatory insurance, new $2.5K flex limit, net investment income tax, additional medicare tax
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What is the net investment income tax
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3.8% tax on on lesser of investment income or MAGI $200K s or $250K MFJ or $125K MFS
Does not apply to NR aliens and corporations |
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What is the additional medicare tax for 2013
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.9% of amounts over s $200K, MFJ=$250K, MFS $125
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When is part of a child's investment income taxed at parents rate
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Kiddie tax--investment income >$$2K, child is less than 18 or full time student less than 24, child required to file a tax return, one of the parents was alive.
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How is the kiddie tax computed
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first $1K is standard deduction for dependents and the next $1K is at childs rate. Balance of investment income is at parents rate
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When can parents elect to include their child's investent income on their own return
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only income is investment income, income is less than $10K, no estimated tax paymfnts for the child,no fed tax w/h from child's income
Cannot include royalties. onlly interest cg distributions and Alaska permanent funds dividends |
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What is the nanny tax and when must it be paid
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Employment taxes for household help. Must be paid if EE earns more than $1.8K Must wh SS and pay matching SS and medicare at 15.3%
Not required to w/h income taxes. However if wages are more than $1K per quarter or more, must pay federal unemployment tax which applies to the first $7K of EEs wages |
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What is the first time homebuyer credit repayment
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lst time homebuyres who claimed a special tax credit in 2008, 2009 and 2010 are required to repay a portion of funds received over a 15 year period. Maximum credit was $7,500 must pay at least $500 per year
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What is the foreign income exclusion
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$97600 per tp. TP must be resident and physically present in foreign country Also may exclude ER paid amounts for housing
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What is the foreign tax credit
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citizens and resident aliens are eligible for a foreign tax credit as an itemized deduction on schedule A or as a credit against us income tax
TP may claim credit on line 47 of 1040 if all foreign income is specified passive and total taxes paid do not exceed $300 S or $600 MFJ. If tax paid exceeds this amount, tp must file Form 1116, foreign tax credit. |
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Who must file the statement of specified foreign financial assets, form 8938
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TP who hold foreign financial assets wit an aggregate alue exceeding $50K or $100K MFJ
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Who must file the finCEN Form 114, Report of foreign bank and financial accounts (FBAR)
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foreign accounts of more than $10K. The return is due June 30 of year after meeting $10K. Failure to file=fine of $250K or 5 years inprison
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