Dependent Filing
Dependent Filing
Interest and Dividend
EIC
Other Income/Adjustments
100
What four requirements must every individual meet to be claimed as a dependent?
What is The dependent must be a qualifying child or qualifying relative; they must be a U.S. citizen or a resident of the United States, Canada, or Mexico; they cannot file a joint return (unless to claim a refund); and the taxpayer claiming the dependent must not be a dependent.
100
What happens when more than one taxpayer claims the same qualifying child?
What is The IRS will apply the tie-breaker rules to award the qualifying child to the qualifying taxpayer.
100
How is interest income reported to the taxpayer?
What is Interest income is reported to the taxpayer on Form 1099-INT or a substitute statement.
100
What is the difference between nonrefundable and refundable credits?
What is The combined amount of a nonrefundable credit cannot reduce the tax to less than $0. Refundable credits can reduce the tax to less than $0, allowing the taxpayer to receive a refund of the excess.
100
If a taxpayer receives less than $20 in a calendar month from tips from any one job, how are they reported on the tax return?
What is Such tips are entered directly on the “wages” line of the tax return. They are subject only to income tax.
200
What are the five tests for a qualifying child?
What is Relationship, residency, age, support, and joint return.
200
What additional requirements must be met by a qualifying child for purposes of this credit?
What is For purposes of the Child Tax Credit, the child must be a qualifying child who is the taxpayer’s dependent and who has not reached their 17th birthday by the end of the year. The child must be a citizen, national, or resident of the United States.
200
What is dividend income, and how is it reported to the taxpayer?
What is Dividend income may consist of ordinary dividends, capital gain distributions, or nontaxable (return of capital) distributions. Dividend income is reported to the taxpayer on Form 1099-DIV or a substitute statement.
200
Who may qualify for the Additional Child Tax Credit?
What is Taxpayers who qualify for the Child Tax Credit and have earned income in excess of $3,000 for 2015, or those with three or more qualifying children for Child Tax Credit purposes whose Child Tax Credit was limited by their tax liabilities.
200
What four types of adjustments to income are allowed on Form 1040A?
What is • Educator expenses (line 16). • IRA deduction (line 17). • Student loan interest deduction (line 18). • Tuition and fees (line 19).
300
How can a married individual meet the joint return test to remain a qualifying child?
What is They can meet this test by not filing a joint return with their spouse, or they can file a joint return with their spouse if they are filing only to claim a refund of any taxes withheld.
300
What four tests must be met to be considered a qualifying relative?
What is Relationship or member of the household, gross income, support, and not a qualifying child.
300
Is interest received on U.S. Treasury obligations taxable on state and/or local returns?
What is No. Interest on U.S. Treasury obligations is exempt from state and local tax by federal law.
300
What are the four qualifications specific to taxpayers, without qualifying children, to receive the Earned Income Credit?
What is The four qualifications are: • Be at least 25 years old, but younger than age 65, on December 31, 2015. • Not be able to be claimed as a dependent on another taxpayer’s return. • Live in the United States more than half the year. • Have earned income and AGI of less than $14,820 ($20,330 if married filing jointly).
400
How can you determine who paid more than half of the person’s support?
What is Total support is determined and reduced by the funds received by and for the person from all sources other than the taxpayer. Other sources of support might include relatives, government programs, and the dependent’s own income.
400
How can the gross income test be satisfied?
What is The qualifying relative’s gross income must be less than the exemption amount ($4,000 for 2015).
400
Is municipal bond interest taxable on a federal return?
What is No, the federal government does not tax municipal bond interest.
400
What is the possible penalty for failing to comply with the EIC due diligence rules?
What is A Tax Professional is subject to a $505 penalty for each occurrence.
500
What happens if an individual is a qualifying child of more than one taxpayer?
What is Only one taxpayer can claim the child unless the special rule for divorced or separated parents applies. The tiebreaker rules may be applied to determine which person can treat the child as a qualifying child.
500
What is the purpose of Form 2120, Multiple Support Declaration?
What is If two or more persons together provided over one-half of a person’s support, the other(s) agree to allow the specified taxpayer to claim the exemption. A statement waiving the right to claim the dependency exemption should be signed by each contributor who is not claiming the exemption and retained by the one who is. Form 2210 is attached to the return of the taxpayer claiming the exemption.
500
Which taxpayers will use the Qualified Dividends and Capital Gain Tax Worksheet?
What is Taxpayers whose only capital gain income is qualified dividends (shown in box 1b of Form 1099-DIV) and “normal” capital gain distributions (shown in box 2a of Form 1099-DIV) from mutual funds or regulated investment companies may use the Qualified Dividend and Capital Gain Tax Worksheet to compute their tax.
500
What are the four requirements of EIC due diligence?
What is 1. Complete an eligibility checklist. 2. Compute the amount of credit. 3. Comply with the knowledge requirement. 4. Retain records.
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