Tax, Chp 3

Front 1

Enables a married taxpayer with a dependent child whose spouse did not live in the taxpayer's home during the last six months of the tax year to file as a head of household rather than as married filing separately.

Back 1

abandoned spouse

Front 2

A tax credit based solely on the number of qualifying children under age 17. The maximum credit available is $1,000 per child through 2012. A qualifying child must be claimed as a dependent on a parent's tax return in order to qualify for the credit. Taxpayers who qualify for the credit may also qualify for a supplemental credit. The supplement credit is treated as a component of the earned income credit and is therefore refundable. The credit is phased out for higher-income taxpayers.

Back 2

child tax credit

Front 3

The tax law provides an exemption for each individual taxpayer and an additional exemption for the taxpayer's spouse if a joint return is filed. An individual may also claim a dependency exemptions for each dependent, provided certain tests are met. The amount of personal/dependency exemptions is $3,800 in 2012. The amount is indexed for inflation. The exemptions is subject to phaseout once adjusted gross income exceeds certain statutory threshold amounts. The Tax Relief Act of 2010 put off the reinstatement for two years (2011/2012)

Back 3

personal & dependency exemption

Front 4

An individual who, as to the taxpayer, satisfies the relationship, gross income, support, citizenship, and joint return tests. Such an individual can be claimed as a dependent of the taxpayer.

Back 4

qualifying relative

Front 5

An unmarried individual who maintains a household for another and satisfies certain conditions. Such status enables the taxpayer to use a set of income tax rates that are lower than those applicable to other unmarried individuals but higher than those applicable to surviving spouses and married persons filing a joint return.

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Head-of-household

Front 6

Certain personal expenditures allowed by the Code as deductions from adjusted gross income. Reported on Sch A

Back 6

itemized deductions

Front 7

To reduce the tax savings that result from shifting income from parents to children, the net unearned income of a child under age 19 (or under 24 if a full-time student) is taxed at the marginal tax rate of the parent(s). For the provision to apply, the child must have at least one living parent and unearned income of more than $1,900 for the tax year.

Back 7

kiddie tax

Front 8

The additional tax liability that results for a married couple compared with what their tax liability would be if they were not married and filed separate returns.

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marriage penalty

Front 9

To qualify for a dependency exemption, the support test must be satisfied. This requires that over 50% of the support of the potential dependent be provided by the taxpayer. Where no one person provides more than 50% of the support, enables a taxpayer to still qualify for the dependency exemption. Any person who contibuted more than 10% of the support is entitled to claim the exemption if each person in the group who contributed more than 10% files a written consent. Must meet all the requirements for claiming a dependency exemption.

Back 9

multiple support agreement

Front 10

An individual who, as to the taxpayer, satisfies the relationship, abode, and age tests. To be claimed as a dependent, such an individual must also meet the citizenship and joint return tests and not be self-supporting.

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qualifying child

Front 11

The individual taxpayer can either itemize deductions or take this type of deduction. The amount depends on the taxpayer's filing status.

Back 11

standard deduction

Front 12

The joint return tax rates apply to this for the two tax years after the tax year of the death of the spouse. To qualify, the taxpayer must maintain a household for a dependent child.

Back 12

surviving spouse

Front 13

Used by upper-income taxpayers and those not permitted to use the tax table. Separate ones are provided for married individuals filing jointly, head of household, single, estates and trusts, and married individuals filing separate returns.

Back 13

tax rate schedules

Front 14

Provided for taxpayers with less than $100,000 of taxable income. Separate columns are provided for single taxpayers, married taxpayers filing jointly, head of household, and married filing separate.

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tax table

Front 15

Aka investment income, it includes such income as interest, dividends, capital gains, rents, royalties, and pension annuity income.

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unearned income