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10 Cards in this Set
- Front
- Back
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What are the primary purpose of the IRS?
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1. Enforce IRC
2. Educate taxpayers 3. Collect current and delinquent taxes |
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What is property tax and their two categories?
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A levy on property that the owner is required to pay.
2 Categories: Realty - building/land Personal property - tangible property |
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What is transaction tax and the 3 types of them?
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A levy placed on a specific type of monetary transaction for a particular purpose.
Excise - applies to specific goods and commodities. ex: gasoline, alcohol, tobacco, etc. Sales - applies to a broad range of goods/services Use - Prevent the avoidance of paying a sales tax. |
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What are transfer taxes and two types of them?
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A tax on the passing of title to property from one person (or entity) to another.
2 Types of transfer tax: 1. Gift tax - annual exclusion is $130,000 per donor, per donee (receipent) 2. Estate tax (inheritance tax) - tax base is value of property, annual exclusion (2012) |
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What is the formula for taxable income?
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Income
- Exclusions _____________ Gross Income - Deductions for AGI __________________ AGI - Std. Deductions or Itemized deductions (greater of the two) - Personal/dependency exemptions _____________________________ Taxable Income |
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What are the qualifications of a qualifying child (QC)?
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Must meet these tests:
1) Relationship Test - child, siblings, and descendants 2) Support Test - cannot be self-supporting 3) Age Test - under 19 yrs of age or under 24 if full-time student. 4) Abode Test - must live with taxpayer > 1/2 year. |
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What are the qualifications of a qualifying relative (QR)?
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1) Relationship Test - relatives, and members of the household (not cousins).
2) Gross Income Test - Gross Income < Exemption Amount ($3,800) 3) Support Test - taxpayer must provide > 50% of the person's support. |
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What is the head of household filing status?
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Unmarried taxpayers who maintains a household for at least one dependent that lives with them. (Qualifying Child/Qualifying Relative)
Qualifications: 1) Taxpayer must pay over half of the cost of maintaining a household as his/her home. 2) Household must be the principal home of the dependent. |
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What is the surviving spouse status?
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Available for 2 years following the death of spouse if taxpayer has a qualifying child.
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What is the general rule for determining if a taxpayer must file a tax return?
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If Gross Income is greater or equal to:
- Standard deduction + Additional standard deduction (age only) + personal exemptions |
