Download Tax Law Exercises and Questions: A Guide to Filing, Credits, and Deductions and more Exams Law in PDF only on Docsity!
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List 4 Due Diligence Req's
- Complete (forms)
- Keep
- Knowledge
- Document Earned income Wages, tips, commissions, farming & other business income. $ for services Unearned income Taxable income including investment money, dividends, rents, royalties, pensions, alimony, unemployment (not performing services) Single filing requirements < 65 10,
65 11, MFJ filing requirements <65. 20,
- 21,950 (1 spouse)
- 23200 (2 spouses) MFS Filing requirement 4050
Dependent filing requirement $1050 unearned income HOH FILING REQUIREMENT <65 13,
65 14900 When is marital status determined? Last day of tax year. Or Date of death if one spouse died How much is added Ro standard deduction if taxpayer is 65+ or blind? 1250 Married & QW 1550 Single & HOH Personal exemption amount? 4050 2 amounts added to decide gross income filing requirements Standard Deduction + Personal exemption 5 tests for a Qualifying Child
- Relationship 2)Age
- Residency
- Support
- Joint Return (Child not filing joint return)
- unmarried or considered unmarried on last day of tax year
- QC or QR
- Taxpayer maintains household for QC/QR or patent that they can claim Costs of maintaining home? Rent Mort interest RE taxes INS - rent or homeowners Repairs Utilities Food Requirements for Qualifying Widower
- taxpayers spouse died in either of the 2 years prior to the current tax year.
- taxpayer paid >1/2 cost of maintaining home of kids etc.. What firm would a custodial Parent use to relinquish rights for that year to claim child so that other parent can claim that child? 8332 When do you use a schedule B? When interest or dividends exceed $ Is interest received on US treasury obligations taxable on state/local returns? NEVER Is a municipal bond taxed on a federal return?
No Limitations to medical deductions 10% of your AGI or 7 1/2% of your AGI if you or spouse is over 65 Types of taxes that are deductible:
- state and local taxes
- Real property tax
- personal property tax
- Foreign income tax No Children: How does this taxpayer qualify for EITC?
- age 25- < 65 on 1/1 of year taxes are filed (so you file 2016 taxes in 2017) (or at least one spouse fills age requirement)
- not be ABLE to be claimed by anyone else
- Not be a QC if another
- live in US > 1/2 year
- Earned income & AGI < 14880S/20430 M Taxpayer has 1+ child. What are 4 qualifications to receive EITC
- Have a QC
- QC not claimed by another taxpayer
- Have earned income & AGI less than 39,296 (44,846)...... 1 QC MFJ 44,648 (50,198)...... 2 QC MFJ 47,955 (53,505)....... 3 QC MFJ
What's the Premium Tax Credit? Credit that helps pay the cost of health insurance What's the maximum Lifetime Learning Credit? 20% of total qualified credits with a max of $ How is Lifetime Learning Credit calculated? 20% if Total Qualified Expenses What's the maximum Tuition and fees deduction? May deduct up to $4000 as an adjustment to income (per return not per student) What is a Qualified Retirement Plan? A plan that is eligible for favorable tax treatment Who can establish an IRA? A taxpayer with earned income who is NOT 70 1/2 by end of tax year IRA Contribution Limit? 5500 (6500 if 50+) What can a NON ACTIVE Participants do? Can fully deduct the amount contributed from their earnings. Difference between a traditional IRA and Roth IRA? Traditional - taxed when it comes out Roth - taxed when it goes in
Covered means Active Participant Active participant Taxpayer participated in
- qualified retirement plan
- qualified annuity plan
- 403B
- SIMPLE plan
- government plan
- certain pension plans funded solely by EMPLOYEE contributions
- A plan established by a self-employed taxpayer On a W-2, how can you tell if a taxpayer was covered (participating in) an employer- maintained plan? Box 13 is checked under "retirement plan" When do you stop being an active participant? When you are no longer working for the employer that was covering you What is a NON-ACTIVE participant? People that fund their own IRAs not through an employer What a huge benefit to being a non active participant in a retirement plan? IRA contributions are fully deductible up to maximum contribution amount. MAGI for traditional IRA is calculated by: AGI plus..
Student loan int deduction Tuition and fees deduction
