Exemptions and Dependents
Filing Status
Income
Itemized Deductions
Tax Credits
100
What is the difference between a personal and dependent exemption?
A personal exemption is the taxpayer and/or spouse. A dependent exemption is either a qual. child or qual. relative.
100
Name the five filing statuses.
Single, HoH, MFJ, MFS, Qual. Widow with dep. child
100
What is the difference between earned and unearned income? Name examples for each.
Earned income is money you received for services performed. -wages, salaries, tips, self-employment Unearned income is when an asset earned the money for you.-interest, dividends, pension income, unemployment compensation, rental property income
100
List three types of itemized deductions.
1. medical/dental expenses 2. Taxes you paid (real estate, personal, general sales tax or state income tax) 3. Interest you paid (mortgage, insurance premiums) 4. Gifts to charity (cash and non-cash)
100
What two non-refundable credits have we discussed so far?
Child tax credit, child and dependent care expense credit
200
What are the 5 tests that must be met for qualifying child?
1. Relationship 2. Age 3. Residency 4. Support 5. Joint return
200
What are the filing statuses used to determine?
Filing requirements, standard deduction, and tax rate
200
True or False. Income reported on Form 1099-MISC, box 7, is not reported as wages on line 7 of Form 1040.
True, it is reported on line 12 of Form 1040 and you must fill out a Sch. C for self-employment income.
200
Medical and dental expenses that exceed (blank)% of your adjusted gross income are deductible. (and what % if either you or your spouse are 65 or older?)
10% 7.5%
200
What is the purpose of tax credits?
To reduce your income tax dollar for dollar.
300
What are the four test that must be met for qualifying relative?
1. NOT a qual. child 2. Member of the household or relationship test 3. Gross income test 4. Support test
300
True or false. To file MFJ, both individuals must have income.
FALSE.
300
If you were not required to report tips to your employer because it was less than the required amount, what form must you file on your tax return and why?
You must file Form 4137-Social Security and Medicare Tax on Unreported Tip Income. You are required to pay SS and medicare taxes as well as include it in income.
300
What is the standard mileage rate for medical and volunteer miles?
23.5 cents 14 cents
300
True or false. You can only receive credits for up to three children for the child tax credit.
FALSE!!! For each qual. child you can receive up to $1000. The EIC is for 0, 1, 2, or 3 or more children.
400
Name different types of temporary absences allowed to still meet the residency test.
illness, education, business, vacation, military service, kidnapped children
400
To be considered unmarried for tax purposes, what tests must ALL be met?
1. You file a separate return. 2. You paid more than 1/2 the cost of keeping up the home. 3. You did NOT live with your spouse at ANY time during the last 6 mths. of the year. 4. Your home was the main home of your child, stepchild, or eligible foster child for more than 1/2 of the year. 5. You must be ABLE to claim the exemption for the child. (However, you can still meet the test if you cannot claim the exemption ONLY b/c the noncustodial parent is allowed to claim the exemption for the child.
400
True or False. Colin was injured on the job and received workers' compensation payments. The amount he received will be included in box 1 of Form W-2 as taxable compensation.
False, workers' compensation is not taxable.
400
List at least 3 types of taxes and fees that are NOT deductible.
1. Federal taxes-income tax, Social security (FICA), Medicare 2. driver's, marriage, hunting, or pet licenses 3. water and sewer taxes 4. taxes on alcohol, tobacco, cigarettes 5. utility taxes-phone, gas, electricity
400
True or False. You can receive a credit for all expenses you paid for child and dependent care.
FALSE! You can only receive a percentage, between 20-35% if they are qualified expenses for qualified dependents.
500
What are the only two countries that the US has treaties with that allow dependents to not live in the US?
Canada and Mexico
500
If you file MFS, you are disqualified from what benefits? (Name all that apply.)
1. You cannot claim the standard deduction if your spouse itemizes 2. You cannot claim the EIC. 3. You cannot claim the credit for child and dependent care expenses. 4. You cannot claim interest you paid on student loan interest. 5. You cannot claim education credits.
500
Define what Medicaid Waiver payments are.
On Jan. 3, 2014 the IRS issued a notice that enables certain individuals who otherwise would require care in a hospital or nursing facility to receive care in the individual care provider's home. The payment the care provider receives is treated as difficulty of care payments and is excludable from gross income.
500
What form must you file if your non-cash contributions exceed $500?
Form 8283, Noncash Charitable Contributions
500
What are the additional requirements if you want to claim the EIC but you have no qualifying children.
1. You must be at least 25 but less than 65 years old. 2. You cannot be the dependent of another person. 3. You cannot be the qual. child of another person. 4. You must have lived in the US for more than 1/2 the year.
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