💥 Hit Me With Your Best Tax
This tax is generally withheld from an employee's wages to fund Social Security and Medicare.
What is FICA tax?
A taxpayer receives $25,000 from a relative's estate. The amount is generally excluded from gross income as this.
What is an inheritance?
A taxpayer is required to file a federal income tax return but does not submit it by the due date. This penalty may apply.
What is the failure-to-file penalty?
When a taxpayer dies, this person is generally responsible for filing the taxpayer's final income tax return.
Who is the personal representative or surviving spouse?
A taxpayer purchases land for $75,000 and pays $2,000 in legal fees to acquire the property. This is the taxpayer's basis in the land.
What is $77,000?
This form reports contributions made to an HSA or Archer MSA.
What is Form 5498-SA?
A taxpayer receives $50,000 of net earnings from self-employment. This schedule is used to calculate the tax imposed on those earnings.
What is Schedule SE?
An employer pays up to the statutory annual limit for an employee's qualifying educational assistance under a qualified plan. This benefit may generally be treated this way.
What is excluded from the employee's gross income?
The IRS may generally assess additional tax within this period after a return is filed.
What is three years?
A taxpayer dies on December 31. For federal income tax purposes, the taxpayer's final tax year ends on this date.
What is December 31—the date of death and the end of the taxpayer's tax year occur on the same date?
A taxpayer receives a $5,000 assessment from the city for a new sidewalk that increases the value of the taxpayer's property. The assessment generally has this effect on basis.
What is it increases the property's basis?
This form reports distributions from a Health Savings Account, Archer MSA, or Medicare Advantage MSA.
What is Form 1099-SA?
An employer generally begins withholding Additional Medicare Tax when an employee's wages exceed this amount, regardless of the employee's filing status.
What is $200,000?
A taxpayer receives life insurance proceeds in installments and earns interest on the unpaid balance. The death benefit may be excluded, but this portion is taxable.
What is the interest income?
A taxpayer is a U.S. citizen living and working outside the United States on the regular filing due date. The taxpayer may generally receive this automatic extension of time to file.
What is two months?
A U.S. citizen receives income from sources outside the United States. Unless a specific exclusion or credit applies, this income is generally treated this way for U.S. federal income tax purposes.
What is taxable and must generally be reported on the U.S. tax return?
A taxpayer owns rental property and is entitled to $10,000 of depreciation but fails to claim it. The property's basis must generally be reduced by this amount.
What is $10,000?
💡 Allowed or allowable
This form reports payments received through payment cards and certain third-party network transactions.
What is Form 1099-K?
A taxpayer meets the estimated tax safe harbor using 100% of the prior year's tax. However, the taxpayer's prior-year AGI exceeded $150,000. This percentage is generally required instead.
What is 110%?
A student receives a scholarship that pays $15,000 of tuition and $5,000 for room and board. This amount is generally taxable.
What is $5,000?
A taxpayer never files a required federal income tax return. The statute of limitations for the IRS to assess the tax begins on this date.
What is it doesn't begin—there is no statute of limitations when a required return is not filed?
A taxpayer dies before receiving taxable interest that had accrued before death. When later received by the beneficiary or estate, the interest is generally treated as this.
What is Income in Respect of a Decedent (IRD)?
A taxpayer receives gifted property with a donor's basis of $40,000 and a fair market value of $30,000 on the date of the gift. The taxpayer later sells the property for $35,000. This is the recognized gain or loss.
What is no gain and no loss?
This form is used to report the sale or exchange of real estate, including certain principal residence transactions.
What is Form 1099-S?
This tax may apply to the unearned income of certain children and uses the parent's marginal tax rate.
What is the Kiddie Tax?
An employee receives a $50 cash gift card from their employer as a holiday gift. Even though the amount is small, it generally does not qualify as this type of excluded fringe benefit.
What is a de minimis fringe benefit?
A taxpayer files a fraudulent return with the intent to evade tax. The IRS has this amount of time to assess the tax.
What is no time limit?
A taxpayer dies owing medical expenses. The expenses are paid by the estate within one year after death. The executor may elect to deduct qualifying expenses on this return instead of the estate tax return.
What is the decedent's final Form 1040?
A taxpayer buys a rental property for $200,000, makes $25,000 of capital improvements, and has $40,000 of depreciation allowed or allowable. This is the adjusted basis.
What is $185,000?
$200,000 + $25,000 − $40,000 = $185,000
This form is generally issued when a lender cancels $600 or more of a taxpayer's debt.
What is Form 1099-C?