LH SU1 STATUSES AND FILING REQUIREMENTS

TAXABLE INCOME

TAXPAYER IS CONSIDERED UNMARRIED IF ALL REQ ARE MET FOR HOH:

1) TP PAID MORE THAN HALF THE COST OF UP KEEPING THEIR HOME FOR TY

2) TP SPOUSE DID NOT LIVE IN HOME DURING LAST 6 MONTHS OF TY

3) THE HOME WAS THE HOME FOR AT LEAST 6 MONTHS FOR QUAL DEPENDENT FOR MORE THAN HALF THE YEAR

CANNOT USE FOSTER CHILDREN AS DEP FOR HOH

FOR A QUALIFYING RELATIVE, WHAT IS THE INCOME LIMIT?

$5200

NET UNEARNED INCOME

TOTAL UNEARNED INCOME MINUS 2700

KIDDIE TAX

FIRST $1350 OF UNEARNED INCOME IS TAX FREE. THE NEXT $1350 IS TAXED AT CHILD’S RATE. ANY AMOUNT ABOVE $2700 (NUI) IS TAXED AT PARENTS RATE.

WHEN MUST A DEPENDENT FILE A RETURN?

IF UNEARNED INCOME EXCEEDS $1350

OR

THE GROSS INCOME EXCEEDS STANDARD DEDUCTION

WHAT IS THE STANDARD DEDUCTION FOR A DEPENDENT?

EARNED INCOME PLUS 450

OR

1350

WHICHEVER AMOUNT IS GREATER. THE DEDUCTION CANNOT EXCEED THE STANDARD DEDUCTION OF $15,750

IF YOU DO NOT HAVE PERMAMENT RESIDENCY AND YOU ARE HERE ON VACATION AND YOU WORK A JOB IN AMERICA, IS IT TAXABLE?

YES, EARNINGS MADE IN AMERICA ARE TAXABLE

QUALIFYING CHILD REQUIREMENTS

1. UNDER 19, OR UNDER 24 AS A FULL TIME COLLEGE STUDENT

2. NO INCOME LIMIT

3. PARENT MUST SUPPORT MORE THAN 50%

4. MUST BE DIRECT RELATIVE, NO FOSTER CHILD OR COUSIN

5. DEPEDENT LIVED WITH TAXPAYER FOR 6 MONTHS OF YEAR

QUALIFYING RELATIVE REQUIREMENTS

1. NO AGE LIMIT

2. GROSS INCOME CANNOT EXCEED $5200

3. IF DIRECTLY RELATED THERE IS NO MINIMUM RESIDENCY REQUIREMENT

4. IF NOT DIRECTLY RELATED THE DEPENDENT MUST HAVE LIVED WITH YOU ALL YEAR

NON RELATIVE FOR QUALIFYING RELATIVE

COUSIN, FRIEND, FIANCEE

STANDARD DEDUCTION FOR STATUSES

SINGLE $15,750

MFJ/QSS $31,500

HOH $23,625

MFS $5

WHAT AGE DOES KIDDIE TAX APPLY TO

CHILDREN UNDER AGE 18, 18 YEAR OLDS WHO DO NOT PROVIDE MORE THAN HALF THEIR OWN SUPPORT AND FULL TIME STUDENTS UNDER AGE 24. MUST BE CLAIMED AS A DEPENDENT.

ACTUAL EXPENSES METHOD FOR CALCULATING KIDDIE TAX

YOU CAN ITEMIZE EXPENSES FROM INVESTING RATHER THAN SUBTRACTING THE 2700. YOU SUBTRACT $1350 PLUS THE ACTUAL AMOUNT OF THOSE ITEMIZED EXPENSES.

UNEARNED INCOME

TOTAL AMOUNT OF UNEARNED INCOME

WHAT IF NRA RECEIVES SCHOLARSHIP FROM US ORGANIZATION TO ATTEND SCHOOLING IN THEIR HOME COUNTRY

TREATED AS FOREIGN INCOME AND HAS NO US TAX

1099-K

GROSS TRANSACTIONS ON ONE PLATFORM OF $20K AND 200 TRANSACTIONS IS REQUIRED TO FILE A 1099K.

1099G

CERTAIN GOVERNMENT PAYMENTS

THINGS YOU NEED FOR PRIOR YEAR RETURN

STATE INCOME TAX REFUND

AMT FOR CREDIT

GAIN OR LOSS CARRYOVER

CHARITABLE GIFT CARRYOVER

SCHEDULE D

FORM 8801

FORM FINCEN REPORT 114

REPORT OF FOREGIN BANK AND FINANCIAL ACCOUNTS THAT YOU HAVE AUTHORITY OVER AND THE TOTAL COMBINED OF THESE ACCOUNTS EXCEEDS $10,000 AT ANY TIME DURING THE CALENDAR YEAR. FILED SEPARATELY FROM 1040

STATEMENT OF SPECIFIED FOREIGN FINANCIAL ASSETS

FORM 8938. ATTACHED TO 1040. THIS IS USED TO REPORT SPECIFIED FOREIGN FINANCIAL ASSETS.

DUE DATE FOR FBAR

APRIL 15 OR OCTOBER 15 IF YOU FILED AN EXTENSION

FORM 8938 - STATEMENT OF SPECIFIED FOREIGN FINANCIAL ASSETS— THRESHOLD FOR STATUESES WHO ARE LIVING OUTSIDE THE US

NO MORE THAN $200K FOR VALUE AT THE LAST DAY OF THE YEAR OR MORE THAN $300K AT ANY TIME DURING THE YEAR. DOUBLES FOR MFJ WHO ARE LIVING OUTSIDE THE US

FORM 8938 - STATEMENT OF SPECIFIED FOREIGN FINANCIAL ASSETS— THRESHOLD FOR STATUSES WHO ARE LIVING INSIDE THE US

VALUE GREATER THAN $50K AT THE LAST DAY OF THE YEAR OR MORE THAN $75K AT ANY TIME DURING THE TAX YEAR. THESE THRESHOLDS DOUBLE FOR MFJ

INFORMATION RETURN OF US PERSONS WITH RESPECT TO CERTAIN FOREIGN CORPORATIONS

FORM 5471. USED BY CERTAIN US CITIZENS AND RESIDENTS WHO ARE OFFICERS, DIRECTORS, SHAREHOLDERS IN CERTAIN FOREIGN CORPORATIONS. THE FORMS AND SCHEDULES ARE USED TO SATISFY THE REPORTING REQUIREMENTS OF SECTIONS 6038, 6046, 965 (TRANSITION TAX) AND REGULATED REGULATIONS. THIS IS FILED WITH THE TAX RETURN.

ANNUAL RETURN TO REPORT TRANSACTIONS WITH FOREIGN TRUSTS AND RECEIPTS OF CERTAIN FOREIGN GIFTS

FORM 3520. US PERSONS AND EXECUTORS OF ESTATES OF US DECEDENTS FILE THIS FORM TO REPORT CERTAIN TRANSACTIONS WITH FOREIGN TRUSTS, OWNERSHIP OF FOREIGN TRUSTS UNDER SECTIONS 671-679 AND RECEIPT OF CERTAIN LARGE GIFTS OR BEQUESTS FROM CERTAIN FOREIGN PERSONS.

RETURN OF US PERSONS WITH RESPECT TO CERTAIN FOREIGN PARTNERSHIPS WITH THE TAX RETURN

FORM 8865. US PERSONS QUALIFYING BASED ON INTEREST IN A FOREIGN PARTNERSHIP UNDER ONE OR MORE OF THE 4 CATEGORIES MUST FILE FORM 8865 WITH TAX RETURN

4 CATEGORIES FOR FORM 8865

CATEGORY 1- 50% OR GREATER OWNERSHIP

CATEGORY 2- 10% OR GREATER OWNERSHIP OF US CONTROLLED PARTNERSHIP

CATEGORY 3- CONTRIBUTED PROPERTY (1) RESULTING IN AT LEAST 10% INTEREST OR (2) WITH A VALUE OF MORE THAN $100K

CATEGORY 4- HAD A REPORTABLE EVENT (ACQUISITION, DISPOSITION OR CHANGE IN PROPORTIONAL INTEREST)

ACQUISITION

corporate action where one company purchases most or all of another company's shares or assets to gain operational control

DISPOSITION

final settlement or transfer of something

CHANGE IN PROPORTIONAL INTEREST

an alteration in how ownership shares are divided among individuals or entities in a property or business

1040 DUE DATE

15TH DAY OF THE 4TH MONTH

1040 EXCEPTIONS TO APRIL 15TH DUE DATE

AUTOMATIC 2 MONTH EXTENSION IF ON REGULAR DUE DATE OF THE RETURN, TAXPAYER IS LIVING OUTSIDE THE US AND PUERTO RICO DUE TO (1) MAIN PLACE OF BUSINESS OR POST OF DUTY OR (2) ON DUTY MILITARY SERVICE

PTP ACRONOYM AND DEFINITON

PUBLICLY TRADED PARTNERSHIPS. PARTNERSHIP IN WHICH THE INTEREST IS REGULARY TRADED ON AN ESTABLISHED SECURITIES MARKET REGARDLESS OF THE NUMBER OF PARTNERS

A PTP THAT HAS EFFECTIVELY CONNECTED:

income, gain or loss must pay withholding tax on any distributions of that income made to its foreign partners. In this situation, a PTP must use form 1042 and form 1042S to report withholding from distributions

Form 1042

Annual Withholding Tax Return for US Source Income of Foreign Persons

Form 1042-S

Foreign Persons’s US Source Income Subject to Withholding

TAXPAYERS NET INCOME FROM A PTP MAY NOT BE USED TO

OFFSET NET LOSSES FROM OTHER PTPs OR NET LOSSES FROM OTHER PASSIVE ACTIVITIES. A DISALLOWED LOSS FROM A PTP IS CARRIED FORWARD AND ALLOWED AS A DEDUCTION IN A TAX YEAR WHEN THE PTP HAS NET INCOME OR WHEN THE TAXPAYER DISPOSES OF THEIR ENTIRE INTEREST IN PTP.

CAN YOU LIVE APART IF YOU WANT TO FILE AS MFJ?

YES AS LONG AS YOU ARE LEGALLY MARRIED AND NOT SEPARATED

SPOUSE 1 DIES TAX YEAR 1. SPOUSE 2 REMARRIED AT END OF TAX YEAR 1. HOW DOES SPOUSE 1 FILE?

MFS

MFJ ON NRA

MFJ IS NOT ALLOWED IF ONE SPOUSE WAS A NRA AT ANY TIME DURING THE TAX YEAR UNLESS THE US CITIZEN AND NRA SPOUSE ELECT AND AGREE TO BE TAXED ON THEIR WORLDWIDE INCOME

TIMELINE FOR AMENDING TAX RETURN FROM MFJ TO MFS

MUST BE AMENDED BY THE 4/15 DEADLINE

TIMELINE FOR AMENDING MFS TO MFJ RETURNS

WITHIN 3 YEARS FROM ORIGINAL DUE DATE. TAX LIABILITY IS NOT REQUIRED AT THE TIME THE AMENDED RETURN IS FILED

WHAT HAPPENS IF TAXPAYER OBTAINS A MARRIAGE ANNULMENT?

INDIVIDUALS MUST AMEND RETURNS FOR YEARS FILED AS MARRIED AND CHANGE STATUS TO SINGLE OR HOH. MUST DO THIS TO ALL TAX YEARS NOT CLOSED BY THE STATUTE OF LIMITATIONS

IS MFJ ALLOWED WHEN SPOUSES USE DIFFERENT ACCOUNTING METHODS?

YES

INJURED SPOUSE RELIEF

FORM 8379. WHEN MFJ IS FILED AND ONLY ONE SPOUSE OWES A PAST DUE AMOUNT, THE INJURED SPOUSE CAN FILE FOR RELIEF OR REFUND.

REQUIREMENTS FOR INJURED SPOUSE

1. FILE MFJ

2. HAVE REPORTED INCOME

3. HAVE MADE TAX PAYMENTS OR CLAIMED THE EIC OR OTHER REFUNDABLE CREDIT

4. NOT BE REQUIRED TO PAY A PAST DUE AMOUNT

DUE DATE FOR INJURED SPOUSE FORM 8379

MUST BE FILED WITHIN 3 YEARS FROM THE DUE DATE OF RETURN OR 2 YEARS FROM THE DATE THE TAX WAS PAID

INNOCENT SPOUSE RELIEF WHAT IS THE RELIEF ON?

ONLY FOR TAXES DUE ON THE GUILTY SPOUSE’S INCOME AND NOT ON THE INNOCENT SPOUSE’S INCOME.

QUALIFYING EVENTS FOR CLAIMING INNOCENT SPOUSE

AN UNDERSTATEMENT OF TAX BECAUSE THE SPOUSE OMMITTED IINCOME OR CLAIMED FALSE DEDUCTIONS OR CREDITS AND THE INNOCENT SPOUSE WAS NOT AWARE

UNDERSTATEMENT OF TAX AND THE INNOCENT SPOUSE IS DIVORCED OR NO LONGER LIVING WITH THE SPOUSE

GIVEN ALL FACTS AND CIRCUMSTANCES, IT IS NOT FAIR TO HOLD THE INNOCENT SPOUSE LIABLE

WHEN CAN INNOCENT SPOUSE NOT BE CLAIMED?

INNOCENT SPOUSE KNEW OF ERROS OR A REASONABLE PERSON IN SIMILAR CIRCUMSTANCES WOULD HAVE KNOWN ABOUT THE ERROS

IS THERE AN EXCEPTION FOR INNOCENT SPOUSE?

YES, EVEN IF INNOCENT SPOUSE KNEW ABOUT THE ERRORS. IF THE INNOCENT SPOUSE WAS A VICTIM OF SPOUSAL ABUSE OR DOMESTIC ABUSE BEFORE SIGNING THE RETURN, DID NOT CHALLENGE THE ITEMS ON RETURN BECAUSE OF FEAR, SIGNED THE JOINT RETURN BECAUSE THE INNOCENT SPOUSE WAS PRESSURED OR THREATENED

TIMELINES FOR FORM 8857, INNOCENT SPOUSE RELIEF TO BE FILED

MUST BE REQUESTED WITHIN 2 YEARS OF RECEIVING AN IRS NOTICE OF AN AUDIT OR TAXES DUE BECAUSE OF ERROR ON RETURN

QUALIFYING SURVIVING SPOUSE REQUIREMENTS

THE STATUS IS AVAILABLE FOR 2 YEARS FOLLOWING THE YEAR OF DEATH OF A SPOUSE AND MAY BE ELECTED IF:

1. SURVIVING SPOUSE DID NOT REMARRY DURING TAX YEAR

2. SURVIVING SPOUSE QUALIFIED WITH DECEASED SPOUSE FOR MFJ STATUS FOR TAX YEAR OF DEATH OF SPOUSE

3. SURVIVING SPOUSE MAINTAINED A HOUSEHOLD FOR THE TAX YEAR. — MEANS SPOUSE FURNISHES MORE THAN 50% OF COSTS TO MAINTAIN THE HOUSEHOLD

4. HOUSEHOLD MUST BE PRINCIPAL PLACE OF ABODE OF A QUALIFYING DEPENDENT OF THE SURVIVING SPOUSE

5. DEPENDENT MUST BE SON, DAUGHTER, STEPSON, STEPDAUGHTER, OR ADOPTED CHILD. DOES NOT INCLUDE FOSTER CHILD

IF TAXPAYER WANTS TO FILE AS HOH AND THE SPOUSE IS A NRA:

TAXPAYER IS CONSIDERED UNMARRIED IF SPOUSE IS NRA AND CAN HAVE THE STATUS HOH IF THEY MEET REQ

HOH REQUIREMENTS

1. UNMARRIED OR CONSIDERED UNMARRIED

2. TAXPAYER MAINTAINED HOUSEHOLD THAT IS PRINCIPAL PLACE OF ABODE FOR A QUALIFYING CHILD OR RELATIVE

3. QUALIFYING CHILD DOES NOT NEED TO BE FILED AS A DEPENDENT IF FILED FORM 8832 “RELEASE OF CLAIM TO EXEMPTION FOR CHILD BY CUSTODIAL PARENT”

HOUSEHOLD MAINTENANCE QUALIFYING COSTS

PROP TAX

1098

RENT

UTILITIES

UPKEEP

REPAIR

PROP INSURANCE

FOOD CONSUMED IN HOME

HOUSEHOLD MAINTENANCE NONQUALIFYING COSTS

CLOTHING

EDUCATION

MEDICAL TREATMENT

LIFE INSURANCE

TRANSPORTATION

VACATIONS

SERVICES

RELEASE/REVOCATION OF RELEASE OF CLAIM TO EXEMPTION FOR CHILD BY CUSTODIAL PARENT

CUSTODIAL PARENT USES FORM 8332 TO GIVE UP THE RIGHT TO CLAIM A CHILD AS A DEPENDENT AND IT ALLOWS THE NONCUSTODIAL PARENT TO CLAIM THE CHILD AND RELATED TAX CREDITS. CUSTODIAL PARENT CAN STILL USE CHILD FOR HOH STATUS IF QUALIFIED.

REQUIREMENTS FOR FILING 1040 AS A SELF EMPLOYED TAXPAYER

NET EARNINGS IS $400 OR MORE

TAXABLE INCOME

AGI MINUS below the line deductions then

MINUS:

QBID

TIPS DEDUCTION

OVERTIME DEDUCTION

CAR LOAN DEDUCTION

ENHANCED DEDUCTION FOR SENIORS

INELIGIBLE FOR STANDARD DEDUCTION

1. PERSON WHO ITEMIZES DEDUCTIONS

2. NRA

3. INDIVIDUALS WHO FILE A SHORT PERIOD RETURN

4. MFS RETURN AND ONE SPOUSE ITEMIZES DEDUCTIONS

5. PARTNERSHIPS, ESTATES AND TRUSTS

6. CORPORATIONS

HOW DOES IRS DETERMINE IF YOU’RE BLIND

NO BETTER THAN 20/200 VISION IN THE BETTER EYE EVEN WITH CORRECTIVE LENSES

FOR THE SENIOR DEDUCTION, WHEN ARE THEY ENTITLED TO IT

TAXPAYER HAS REACHED AGE 65 BY THE END OF TAX YEAR. EVEN IF YOU DIE BEFORE THE END OF TAX YEAR.

FOR THE SENIOR DEDUCTION, WHEN ARE THEY NOT ENTITLED TO IT

TAXPAYER DIES BEFORE REACHING AGE 65 EVEN IF TAXPAYER WOULD HAVE REACHED AGE 65 BEFORE YEAR END

HOW MUCH IS THE BLIND DEDUCTION FOR EACH FILING STATUS? WHAT KIND OF DEDUCTION IS IT?

SINGLE OR HOH - 2K

MFJ OR MFS OR QSS - 1600 PER QUALIFYING PERSON

BELOW THE LINE DEDUCTION

HOW MUCH IS THE STANDARD SENIOR DEDUCTION? WHAT KIND OF DEDUCTION IS IT?

SINGLE OR HOH - 2K

MFJ OR MFS OR QSS - 1600 PER QUALIFYING PERSON

BELOW THE LINE DEDUCTION

DEFINITION OF BELOW THE LINE DEDUCTIONS. WHAT DOES IT REDUCE?

REDUCES AGI WHICH AFTER BELOW THE LINE DEDUCTIONS ARE DEDUCTED IT IS NOT YOUR TAXABLE INCOME

WHAT ARE ABOVE THE LINE DEDUCTIONS

EXPENSES SUBTRACTED FROM GROSS INCOME TO CALCULATE YOUR AGI

WHAT IS GROSS INCOME

TOTAL AMOUNT OF MONEY EARNED OR RECEIVED FROM ALL SOURCES BEFORE TAXES OR DEDUCTIONS ARE SUBTRACTED. DOES NOT INCLUDE SOCIAL SECURITY UNLESS IT MEETS THE EXCEPTION

WHAT IS PROVISIONAL INCOME

USED BY IRS TO CALCULATE TAXABLE SOCIAL SECURITY.

ADD AGI WITHOUT SOCIAL SECURITY. ADD TAX EXEMPT INTEREST. ADD 50% OF SOCIAL SECURITY BENEFITS.

FILING THRESHOLD IS BASED OFF OF WHAT INCOME

GROSS INCOME

WHAT ARE THE EXCEPTIONS THAT GROSS INCOME WILL INCLUDE YOUR SOCIAL SECURITY

1. TAXPAYER ARE MFS AND LIVED WITH SPOUSE AT ANY TIME DURING THE YEAR

2. PROVISIONAL INCOME IS MORE THAN BASE AMOUNT

FOR PROVISIONAL INCOME, WHAT DO YOU ADD TOGETHER

ALL INCOME, INCLUDING TAX EXEMPT AND EXCLUSIONS

SPECIAL CONDITIONS THAT MAY REQUIRE FILING REGARDLESS OF GROSS INCOME THRESHOLD

LIABILITY FOR SPECIAL TAX SUCH AS AMT OR RECEIPT OF WAGES FROM A CHURCH.

WHEN MUST THE TAX LIABILITY PAYMENT BE PAID? AND HOW MUCH OF THE PAYMENT IS REQUIRED WHEN YOU FILE AN EXTENSION?

IT MUST BE PAID WHEN THE RETURN MUST BE FILED. THE PAYMENT CANNOT BE LESS THAN 90% OF THE ACTUAL TAX LIABILITY DUE

WHEN IS INTEREST CHARGED ON AN UNPAID TAX LIABILITY?

THE ORIGINAL DUE DATE OF THE RETURN

FAILURE TO FILE A RETURN PENALTY

5% PER MONTH UP TO 25% OF UNPAID LIABILITY

FAILURE TO PAY PENALTY INFO AND WHEN DOES IT START CHARGING

0.5% PER MONTH OF THE UNPAID LIABILITY, MAX 25% WHICH STARTS WHEN THE ORIGINAL TAX IS DUE

FOR THE FAILURE TO PAY PENALTY AND THE FAILURE TO FILE, WHICH ONE OFFSETS ONE ANOTHER?

FAILURE TO PAY PENALTY MAY OFFSET A FAILURE TO FILE PENALTY

HOW CAN A FAILURE TO FILE PENALTY BE AVOIDED?

FILING AN EXTENSION.

HOW CAN A FAILURE TO PAY PENALTY BE AVOIDED?

PAYING 90% OF TAX LIABILITY WHEN RETURN IS DUE AND THE BALANCE MUST BE PAID WHEN THE RETURN IS FILED

HOW LONG DO YOU KEEP THE RECORDS?

RECORDS MUST BE MAINTAINED AS LONG AS THE CONTENTS MAY BE MATERIAL IN ADMINISTRATION OF ANY IRS LAW

HOW LONG ARE EMPLOYERS REQUIRED TO KEEP RECORDS ON EMPLOYMENT TAXES?

AT LEAST 4 YEARS AFTER THE DUE DATE OF THE RETURN OR PAYMENT OF THE TAX

WHAT MUST AN INDIVIDUAL HAVE TO REPORT EMPLOYMENT TAXES OR GIVE TAX STATEMENTS TO EMPLOYEES?

EIN

EMPLOYER PENALTIES DEFINITION

EMPLOYER FAILS TO MAKE A REQUIRED DEPOSIT OF TAXES ON TIME

EMPLOYER PENALTIES AMOUNTS

2% FOR 1-5 DAYS LATE

5% FOR 6-15 DAYS LATE

10% FOR 16+ DAYS LATE

IP PIN

6 DIGIT NUMBER ASSIGNED TO ELIGIBLE TAXPAYERS TO HELP PREVENT THE MISUSE OF THEIR SSN

2 TYPES OF DEPENDENTS

QUALIFYING CHILD

QUALIFYING RELATIVE

WHAT IS CONSIDERED SUPPORT FOR A DEPENDENT

FOOD, CLOTHING, SHELTER, UTILITIES, MEDICAN AND DENTAL CARE AND INSURANCE AND EDUCATION AND CHILD CARE AND VACATIONS ECT

WHAT IS NOT CONSIDERED SUPPORT FOR A DEPEDENT

TAXES, MEDICAL INSURANCE BENEFITS, LIFE INSURANCE PREMIUMS, PURCHASE OF CAPITAL ITEMS LIKE FURNITURE, CARS, APPLIANCES IF THEY ARE PURCHASED FOR PERSONAL AND FAMILY REASONS AND BENEFIT THE ENTIRE HOUSEHOLD

YOU DO NOT NEED TO DO THE SUPPORT TEST FOR A DEPENDENT IF:

DIVORCED OR SEPARATED

AND YOU MEET THE FOLLOWING CONDITIONS:

1. PROVIDED MORE THAN 50% OF SUPPORT

2. HAD CUSTODY FOR MORE THAN 50% OF YEAR

3. LIVED APART FROM EX SPOUSE FOR THE LAST HALF OF THE YEAR

4. DID NOT HAVE A MULTIPLE SUPPORT AGREEMENT IN EFFECT

WHO IS ENTITLED TO THE DEPENDENCY EXEMPTION?

PARENT WITH MORE THAN 50% OF CUSTODY. BUT YOU CAN GIVE THE EXEMPTION TO NONCUSTODIAL IF THERE IS AN AGREEMENT SIGNED BY CUSTODIAL PARENT AND ATTACHED TO NONCUSTODIAL PARENT RETURN

FOR MULTIPLE SUPPORT AGREEMENT FORM 2120, WHATS THE REQ?

1. MUST SUPPORT DEPENDENT MORE THAN 10%

2. NO PERSON IN AGREEMENT HAS PROVIDED MORE THAN 50% OF SUPPORT

3. EVERY PERSON IN GROUP MUST SIGN A WRITTEN CONSENT FILED WITH THE RETURN OF THE TAXPAYER WHO CLAIMS THE DEPENDENCY EXEMPTION

4. TAXPAYER CANNOT BE A DEPENDENT TO ANYONE ELSE

WHAT IF THE CHILD DIES DURING THE TAX YEAR?

THEY CAN STILL BE CLAIMED AS A DEPENDENT

CITIZENSHIP OR RESIDENT STATUS FOR QUALIFYING AS A DEPENDENT

MUST BE FOR ANY PART OF THE YEAR A:

1. US CITIZEN

2. US RESIDENT

3. US NATIONAL

4. CANADIAN RESIDENT

5. MEXICAN RESIDENT

CAN YOU BE A DEPENDENT OF SOMEONE IF YOU ARE CLAIMING A DEPENDENT/

NO, YOU CAN ONLY HAVE 1

HOW TO CALCULATE KIDDIE TAX AND PORTION FOR CHILDS TAX RATE

CALCULATE DEDUCTION (EARNED INCOME PLUS 450 MAX IS $15,750. or 1350. WHICHEVER IS GREATER)

CALCULATE GROSS INCOME

SUBTRACT DEDUCTION FROM GROSS INCOME

NOW YOU HAVE THE TAXABLE INCOME (THIS IS THE CHILDS PORTION THAT WILL BE TAXED AT THEIR RATE)

CALCULATE GROSS UNEARNED INCOME

SUBTRACT 2700 = NUI

COMPARE THE 2 NUMBERS OF NUI AND TOTAL TAXABLE INCOME. PICK WHICHEVER IS LESS.

WHICHEVER ONE IS LESS IS THE PORTION TAXED ON THE PARENTS RETURN.

IF THE NUI IS LESS THAN, THEN MINUS THE TOTAL TAXABLE INCOME MINUS NUI AND THAT PORTION IS TAXED ON THE CHILDS RETURN

WHEN IS A TAXPAYER CONSIDERED A DUAL STATUS ALIEN

TAXPAYER WAS BOTH A NON RESIDENT AND RESIDENT ALIEN DURING THE YEAR

WHEN IS A TAXPAYER CONSIDERED A RESIDENT ALIEN?

GREEN CARD TEST OR SUBSTANTIAL PRESENCE TEST IS MET OR IF BOTH SPOUSES ELECT FOR NRA TO BE TREATED AS A US CITIZEN

GREEN CARD TEST

IF YOU OBTAIN A GREEN CARD WHICH MEANS YOU ARE A LAWFUL PERMANENT RESIDENT OF THE US AT ANY TIME DURING THE YEAR