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20 Cards in this Set
- Front
- Back
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Who has to file a tax return?
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Individuals, corporations and trusts and estates valued at more than $2 million
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Tax payers fall broadly into tow catagoies. What are they?
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Non-Dependents and Dependents
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What is the difference in Non-Dependent and Dependent taxpayers?
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Non-Dependent can claim their own exemption. Dependent are claimed on someone else's tax.
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Non-Dependent tax filing requirements (Most Common)
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Marital Status
Age Gross Income Relationship to qualifying children |
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Per IRS How is a persons marital status determined?
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A person's marital status is determined on the last day of the tax year, or on the date of death for taxpayers who die during the tax year.
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Per IRS How is a taxpayers age determined?
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A person's age-for tax purposes-is determined on the last day of the year. Therefore the IRS considers a TP to have attained his new age on the before his birthday
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Per IRS What is Gross Income?
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A TP must file a tax return when his gross income equals or exceeds the sum of the standard deduction and his personal exemption
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Community Property
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This means that income earned from work is considered half the husband's and half the wifes.
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Filing a tax return when not required?
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If a TP is not required to file according to IRS rules, it may still be advantageous to do in oreder to
-Get a refund of taxes withheld from his paycheck -Qualify for a tax benefit such as Earned Income Credit |
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What is included in Earned Income?
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Salaries, wages, tips and professional fees. It also includes taxable scholarship and fellowship grants.
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Dependent TP Filing Facts
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If a dependent taxpayer does file his own return, under no circumstance is he allowed to take his own personal exemption, even if the TP entitled to claim him as a dependent does not do so.
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Which form to use when filing your taxes?
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Form 1040EZ, Form 1040A and form 1040
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What is form 4868?
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Application for Automatic Extension of Time To File U.S. Individual Income Tax Return
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What is the meaning of "Filing Status"?
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TP's who meet certain requirements recieve special tax benefits depending on their "Filing Status"
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What are the five (5) filing status categories?
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1. Single
2. Married Filing Jointly (MFJ) 3. Married Filing Separate (MFS) 4. Head of Household (HOH) 5. Qualifying Widow/Widower with Dependent Child (QW) |
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Disadvantages of filing Single
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Smallest standard deduction and a higher tax rate.
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Advantages of filign MFJ.
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Usually results in a lower tax rate, a higher standard deduction and access to more deductions and credits than MFS.
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What are the advantages or disadvantages or filing MFS?
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Nobody has to file MFS. It is the only optional filing status. They may choose to file MFS if the TP is married, whether living together or apart or wants to be responsible for only his own tax.
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HOH requirements?
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Many but the main one is that the dependent must be related to the taxpayer.
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Characteristics of those who qualify to use Form 1040EZ
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- Filing status is Single or MFJ
-TP does not claim any dependents -Taxable income is less than $100,000 TP does not claim itemized deductions |
