1.2 Filing Status and Residency

joint, MFS

Example: Dauphine and her husband, Vince, have a 12 year old son. Vince dies suddenly of a heart attack on February 1, 2020. Dauphine remarries on December 20, 2020. Since she remarried in the same year her late husband died, she no longer qualifies for the ___ return filing status with her deceased husband. However, Dauphine does qualify to file jointly with her new husband. Therefore, Vince's filing status for his final tax return must be ___. The executor of Vince's estate would be responsible for filing his final tax return.

120, 40, 20, resident, substantial presence

Example: Vienna is a citizen of Brazil. She obtains a visitor's visa and was physically present in the U.S. for 120 days in each of the years 2018, 2019 and 2020. To determine if she meets the substantial presence test for 2020, she must count the full ___days of presence in 2020, ___ days in 2019 (1/3 of 120), and ___days in 2018 (1/6 of 120). Since the total for the 3-year period is 180 days (and therefore under the 183-day requirement for the substantial presence test), Vienna is not considered a ___ under the ___ ___ test for 2020.

12400, 14050, 18650, 20300, 24800, 26100, 27400, 5, 24800, 26100

Gross Income Filing Thresholds Not every person is required to file a tax return. Single: $___ (65 or older: $___ ) Head of household: $___ (65 or older: $___) Married filing jointly: $___ 65 or older (one spouse): $___ 65 or older (both spouses): $___ Married filing separately (of any age): $___ (this is not a typo; it really is $5) Qualifying widow(er) with dependent child: $___ (65 or older $___ ).

24800

Married filing jointly: $___

27,400

Married filing jointly: 65 or older (both spouses): $___

26,100

Married filing jointly: 65 or older (one spouse): $___

5

Married filing separately (of any age): $___ (this is not a typo; it really is $5)

a (A U.S. citizen (or U.S. resident), who is married to a nonresident alien, can elect to file a joint return as long as both spouses sign the return and agree to be taxed on their worldwide income. A Social Security number is not required for the nonresident spouse because a nonresident spouse that is ineligible for an SSN may request an ITIN to file jointly with a U.S. resident spouse. An election statement must be attached to the return.)

11. A U.S. citizen who is married to a nonresident alien can file a joint return as long as both spouses: A. Sign the return and agree to be taxed on their worldwide income. B. Are living overseas and do not plan to reside in the United States. C. Have valid Social Security numbers. D. Are physically present in the United States.

separate, half, six, exemption, rent, insurance, food, welfare

"CONSIDERED UNMARRIED" FOR HOH STATUS There are some instances where a taxpayer can be "considered unmarried" for tax purposes only. To be "considered unmarried" on the last day of the tax year, a taxpayer must meet all of the following conditions: File a ___ return from the other spouse. Pay more than ___ the cost of keeping up a home for the tax year, and maintain the home as the main residence of a qualifying child, stepchild, or foster child for more than half the year. Not live with a spouse in the home during the last ___ months of the tax year. Be able to claim an ___ for the child (although there is an exception for divorced parents). For the purpose of determining head of household filing status, valid household expenses used to calculate whether a taxpayer is paying more than half the cost of maintaining a home include: ___, mortgage interest, property taxes Home ___, repairs, utilities ___ eaten in the home Valid expenses do not include clothing, education, medical treatment, vacations, life insurance, or transportation. ___ payments are not considered amounts that the taxpayer provides to maintain a home.

a ( A single dependent whose earned income was more than $12,400 in 2020 must file a return. Her father may still claim Reyna as a dependent and a qualifying child because she is a full-time student and under age 24 at the end of the year, and did not provide more than one-half of her own support. )

1. Reyna, age 22, is single and a full-time college student who is claimed as a dependent on her father's tax return. Her father provides the majority of his daughter's support and pays for all her college tuition and books. In 2020, Reyna earned $13,000 in wages from her part-time job as a waitress. She had no other income. Is she required to file a tax return? A. Yes. B. No. C. Reyna is only required to file a tax return if she is a full-time student. D. Reyna should file a return because she will receive a refund, but she is not required to file.

b (Bobby must live with his grandfather for more than half the year (over six months) in order to qualify as his qualifying child. There are exceptions for temporary absences.)

10. In 2020, Clarence took legal and physical custody of his ten-year-old grandson, Bobby. Bobby's parents were both incarcerated all year and do not have the right to claim Bobby as a dependent. How long must Bobby live in Clarence's home for Clarence to qualify for head of household status? A. At least three months. B. More than half the year. C. The entire year. D. More than twelve months.

c (Victor qualifies for head of household filing status because he can be "considered unmarried" for tax purposes. His son lived with him for more than six months, he did not live with his spouse. the last half of the year, and he paid more than half the cost of keeping up a home for the year for a qualifying child. Couples who are living apart but not yet divorced or legally separated are allowed to file jointly, but both spouses must agree to do so. Therefore, if Eleanor refuses to file jointly with Victor, the most beneficial filing status for Victor is head of household.)

12. Victor is 39 years old and has lived apart from his wife, Eleanor, since February 1, 2020. Their divorce was not yet final at the end of the year, and they were not legally separated under a separate maintenance decree. They have two children, a son, age fifteen, and a daughter, age nine. After Victor and Eleanor split up, their son lived with Victor. Their daughter chose to live with Eleanor. Victor provides all of the support for the minor child living with him. Eleanor refuses to file jointly with Victor in 2020. The most beneficial filing status that Victor qualifies for is: A. Married filing separately. B. Single. C. Head of household. D. Married filing jointly.

c (A dependent parent does not have to live with a taxpayer for the taxpayer to elect the head of household filing status. This special rule applies to parents who are related to the taxpayer by blood, marriage, or adoption if the taxpayer pays more than half of the qualifying parent's household costs. Answer "A" is incorrect because a married person can still qualify for head of household if they are "considered unmarried" for tax purposes. A married person can be "considered unmarried" in certain circumstances if they live apart from their spouse and can file as head of household.)

13. Which of the following statements is correct regarding the HOH filing status? A. The taxpayer must be unmarried to qualify for the head of household filing status. B. The taxpayer's spouse must live in the home during the tax year. C. The taxpayer's dependent parent does not have to live with the taxpayer to qualify for head of household status. D. The taxpayer must have paid roughly half of the cost of keeping up the house for the entire year.

b ( The married filing separately (MFS) status is for taxpayers who are married and either: Choose to file separate returns, or Do not agree to file a joint return.)

14. The married filing separately (MFS) status is for taxpayers who: A. Are legally divorced on the last day of the year. B. Are married and choose to file separate returns. C. Are unmarried but engaged to be married. D. Are unmarried but have a dependent child.

c (Huang is exempt from the substantial presence test for five years. In determining residency status for tax purposes, students temporarily in the U.S. on an F, J, M, or Q visa are exempt from the substantial presence test for five years. In addition, an individual who is in either of the following categories is temporarily exempt from counting days toward the substantial presence test: Teacher or trainee: This includes any nonimmigrant temporarily present in the U.S. on a J or Q visa who is not a student. The definition includes physicians, au pairs, short-term scholars, summer camp workers, and cultural exchange visitors temporarily present in the U.S. Closer connection to home country: This includes individuals who have a tax home in a foreign country and a closer connection to that country than they do to the U.S.)

15. Huang is an international student temporarily in the U.S. on an F-1 Visa. Huang arrived in the U.S. on January 1, 2020, and was present in the U.S. all year. How long is he exempt from the substantial presence test? A. One year. B. Three years. C. Five years. D. There is no exemption to the substantial presence test.

d (In 2020, Liza is eligible for "qualifying widow(er) with dependent child" filing status. Liza and Stuart qualified to file MFJ in the year he died, with Liza signing the tax return as a surviving spouse. The year of death is the last year for which a taxpayer can file MFJ. For each of the two years following the year of the spouse's death, the surviving spouse can use the qualifying widow status, if she has a qualifying dependent and does not remarry.)

16. Liza and Stuart were married for nine years. Stuart died on April 3, 2018. Liza did not remarry after her husband's death. Liza has one dependent child, age 5. Which filing status should Liza use for her 2020 tax return? A. Single. B. Married filing jointly. C. Head of household. D. Qualifying widow with a dependent child.

b (Married couples must agree to file jointly. If one spouse does not agree to file jointly, they are individually subject to the MFS filing threshold. In this case, Adrienne and Troy are both required to file separate tax returns because both are above the applicable earnings threshold for MFS.)

17. Adrienne and Troy are married and lived together all year. Adrienne earned $1,900 in wages during the year, and Troy earned $72,000. Adrienne wants to file a joint return, but Troy refuses to file with Adrienne and instead files a separate return on his own. Which of the following statements is correct? A. Adrienne can file a joint tax return and e-file it if Troy refuses to provide his signature. B. Adrienne and Troy must both file separate returns. C. Adrienne can file as single because Troy refuses to sign a joint return. D. Adrienne does not have a filing requirement because her income is below the filing threshold.

c (A parent is the only dependent relative who does not have to live with the taxpayer for the taxpayer to claim "head of household" status. In order to file for head of house hold, the qualifying person" must be one of the following: a birth child, adopted child, grandchild, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of those. The qualifying person must also live with the taxpayer (unless the absence is temporary). The only exception to the residency test is a parent, who does not have to live with the taxpayer. A cousin does not qualify because they do not meet the relationship test. The adopted child in answer "D" does not qualify because the child lived with the taxpayer for less than one-half of the year.)

18. Which dependent relative may qualify a taxpayer for head of household filing status? A. An adult stepdaughter who lives in her own apartment who is supported by the taxpayer. B. A cousin who lives with the taxpayer all year. C. A parent who lives in his own home and not with the taxpayer. D. An adopted child who lived with the taxpayer for five months of the tax year.

b (Church employees who are exempt from Social Security and Medicare taxes and have wages of $108.28 or more for the year are required to file a tax return. In answer B, the church employee's wages are below that threshold. In all of the other answers, the taxpayer would be required to file a return.)

19. All of the following individuals are required to file an income tax return except: A. A taxpayer who owes household employment tax for a nanny. B. A church employee who is exempt from FICA taxes, who earned $104 of wages in 2020. C. A 67-year-old qualifying widower who is blind and earned $47,500 in 2020. D. A single taxpayer who earned $6,500 in 2020 and owes excise tax on withdrawals from a traditional IRA account.

b (Janella and Marcello must both file tax returns. Normally, Janella and Marcello would not be required to file because their combined gross income was less than the filing requirement, and they are both over 65 (this threshold applies if both spouses are 65 or over and they are filing jointly). However, because Marcello's net earnings from self-employment exceeds $400, he is required to file a return, including Schedules C and SE. Further, if Janella did not wish to file a joint return with Marcello, she would nevertheless be required to file separately because her income exceeds the applicable threshold of $5 for MFS filers in 2020. Whether they choose to file jointly or separately, both are required to file tax returns for 2020.)

2. Janella, age 65, and Marcello, age 66, are married and file jointly. Janella's income was $17,600 in wages, and Marcello's net earnings from self-employment was $520, and he also had $4,000 in Social Security income. Neither had any other income during the year. Based on this information, which of the following statements is correct? A. Janella and Marcello are not required to file tax returns. B. Janella and Marcello are both required to file tax returns. C. Only Janella is required to file a tax return. D. Only Marcello is required to file a tax return.

a (Lauren has to file a tax return because of the amount of her unearned income: i.e., the $3,400 lottery prize. Her earned income $1,400 in wages was not high enough to trigger a filing requirement, but the lottery winnings (unearned income) do trigger a filing requirement. Answer "D" is incorrect because most U.S. states allow 18-year-olds to play the state lottery because they are legal adults. Despite the fact that Lauren has to file her own return, her parents can still claim her as a qualifying child.)

20. Lauren is an 18-year-old high school senior in her last year of high school. She worked as a grocery store bagger on weekends and earned $1,400 in wages during 2020. She also received $3,400 for a winning scratch-off lottery ticket. Her parents claim Lauren as a dependent on their joint tax return. Does Lauren have to file her own return? A. Yes, because of the amount of her unearned income. B. Yes, because of the combined amount of her unearned and earned income. C. No, because her earned income is below the threshold for a dependent. D. No, because it is illegal for a high school student to play the lottery.

b (To be eligible for the qualifying widow(er) filing status, the taxpayer normally must have a dependent child. For the purposes of this filing status, a qualifying child can be an adopted child, biological child, or stepchild, but does not include a foster child. This special rule for dependents that excludes foster children only pertains to the qualifying widow(er) filing status. Answer "C" is incorrect because legally adopted children are always treated the same as biological children for federal tax law purposes. Note that this is a very unique rule that applies to the qualifying widower filing status ONLY. For a qualifying widower (a taxpayer whose spouse has died) a "qualifying child" does not include a foster child. Please be aware that qualifying widower filing status is very rare and a scenario where you would have a surviving spouse with a foster child would be even more so. It is unlikely that you would ever see this scenario in actual practice, but we briefly cover it here, because on the EA exam the IRS does test on exceptions, in addition to the general rules.)

21. Which of the following dependency relationships would not qualify a taxpayer to claim qualifying widow(er) as their filing status after the death of a spouse? A. A biological child. B. A foster child. C. An adopted child. D. A stepchild.

d (For Louisa to file as head of household, her home must have been the main home of her qualifying child for more than half the tax year (i.e., over six months). Since her son lived with her for only four months, he would not have been in the household sufficient time to qualify her for this filing status.)

22. Louisa legally separated from her husband in 2020. They share custody of a 13-year-old son. Which of the following facts would prevent Louisa from filing as head of household? A. Louisa has maintained a separate residence from her husband since February 1, 2020. B. Her son's principal home is with Louisa. C. Louisa's parents assisted her with 40% of her household costs. D. Louisa's son lived with her for four months. he lived with his father for the rest of the year.

b (As long as they are married and are neither divorced nor legally separated, Elisabete and Sirius can file a joint return or file separately. They cannot file as single.)

23. Elisabete and Sirius were married in 2016. They have no children or other dependents. They split up two years ago but never officially filed for divorce. Although they lived apart all of 2020, they are neither divorced nor legally separated. Which of the following filing statuses can they use? A. Single or married filing separately. B. Married filing jointly or married filing separately. C. Married filing separately or head of household. D. Single or qualifying widow(er).

c (Alexandra cannot claim head of household status because Sebastian lived with her for only five months, which is less than half the year.)

24. Alexandra's younger brother, Sebastian, is 18 and a full-time student. Sebastian lived with a friend from January through February of 2020. From March through July, Sebastian lived with his sister, Alexandra. On August 1, 2020, Sebastian moved back in with his friends and stayed with them for the rest of the year. However, since Sebastian did not have a job, Alexandra gave him money every month and provided the majority of his financial support for the entire year. Alexandra has no other dependents. Which of the following statements is correct? A. Alexandra can file as head of household. B. Alexandra can file jointly with Sebastian. C. Alexandra cannot file as head of household. D. Sebastian can file as head of household.

a (Leslie must file amended tax returns for the previous two years. She cannot file jointly with her former husband in 2020. If a couple obtains a court decree of annulment, the taxpayer must file amended returns (Form 1040-X), claiming single or head of household status for all tax years affected by the annulment that are not closed by the statute of limitations for filing an amended tax return.)

25. Leslie's marriage was annulled on February 25, 2020. She filed jointly with her husband in the previous two years. She has not yet filed her 2020 tax return. Leslie has no dependents. Which of the following statements is correct? A. She must file amended returns, claiming single filing status for all open years affected by the annulment. She will file as single for 2020. B. She is not required to file amended returns. She can file jointly with her husband because she was still married to him for part of the year. C. She is not required to amend returns for any prior years. She must file as married filing separately in 2020. D. She is not required to amend returns for any prior years. She must file as single in 2020.

a ( Taxpayers are considered "married" for the entire year if: They were married on the last day of the tax year, or One spouse died during the year, and the surviving spouse has not remarried as of the end of the year.)

3. Taxpayers are considered to be "married" for the entire year if: A. One spouse dies during the year, and the surviving spouse does not remarry. B. The spouses are legally separated under a separate maintenance decree. C. The spouses are divorced on December 31 of the tax year. D. The spouses had their marriage annulled during the tax year.

b (Ezequiel and Candra are allowed to amend their separate returns to a joint return in order to claim the credit. If a taxpayer files a separate return, he may elect to amend the filing status to married filing jointly at any time within three years from the due date of the original return (not including any extensions). However, the same does not hold true in reverse. Once a taxpayer files a joint return, he cannot choose to file a separate return for that year after the due date of the return (with a rare exception for deceased taxpayers).)

4. Ezequiel and Candra are married, but they choose to file separate returns for 2020 because the IRS is auditing Ezequiel for a previous tax issue. Ezequiel and Candra file their MFS returns on time. A few months after filing their separate returns, the audit is over, and Ezequiel's previous tax issue has been resolved. He then wishes to file amended returns and file jointly with his wife to claim the Earned Income Tax Credit (EITC). Which of the following statements is correct? A. Taxpayers are prohibited from changing their filing status to claim the EITC. B. Ezequiel and Candra can amend their MFS tax returns to MFJ in order to claim EITC. C. Ezequiel and Candra can amend their MFS tax returns to MFJ, but they cannot claim the EITC on an amended return. D. Candra cannot file jointly with Ezequiel after she has already filed a separate tax return.

c (Because she is legally divorced, Tania could file as Single. However, because she has children and meets the requirements for Head of Household, she should use this as her filing status because it will result in a lower tax.)

5. Tania's divorce became final on October 1, 2020. She has sole custody of her two children, who lived with her the entire year. The children are under the age of 17. She provided more than half of the cost of keeping up the home. What filing status should she use? A. Single. B. Married Filing Separately. C. Head of Household. D. Qualifying Widow(er).

a (If a taxpayer's spouse died during the year, the taxpayer is considered married for the whole year and can file as MFJ. Therefore, Yolanda should file a joint return for 2020.)

6. Yolanda's husband died on November 14, 2020. She has one dependent son, who is eight years old. She did not remarry during the year. What is the most beneficial filing status for Yolanda to use? A. Married filing jointly. B. Single. C. Qualifying widow(er). D. Head of household.

d ( Although Pierre provided over half the cost of maintaining a home for Madison and Ivette, he cannot file as head of household since Ivette (his daughter) did not live with him for more than half the year. Madison cannot file as HOH either because she did not provide more than one-half the cost of keeping up the home for her daughter. However, either Pierre or Madison may still claim Ivette as a dependent and file "Single." Generally, a child is the qualifying child of the custodial parent, so Madison would have the primary right to claim Ivette. But Madison may also choose to release the dependency exemption to Pierre (who is the noncustodial parent) by using Form 8332.)

7. Madison and Pierre are not married and do not live together, but they have a two-year-old daughter named Ivette. Madison and her daughter lived together all year while Pierre lived alone in his own apartment. Pierre cares for his daughter two days a week. Madison earned $13,000 working as a grocery store bagger. Pierre earned $48,000 managing a hardware store. Pierre paid over half the cost of Madison's apartment for rent and utilities, where his daughter Ivette lives. He also gave Madison child support and extra money for groceries. Pierre does not support any other family member. Which of the following statements is correct? A. Pierre can file as head of household. B. Madison can file as head of household. C. Pierre and Madison can file jointly. D. Neither Pierre nor Madison can claim head of household filing status.

d (An executor for a deceased taxpayer can amend a joint return to an MFS return up to one year after the filing deadline. This is the only exception to a rule that generally prevents a taxpayer from amending a joint return to a separate return past the filing deadline. Answer "C" is incorrect because if a marriage has been annulled, the filing status would be amended to "single" rather than "MFS" because an annulment invalidates the original marriage contract.)

8. When may a taxpayer amend a joint tax return from "married filing jointly" to married filing separately" after the original filing deadline? A. Never. B. Only within the statute of limitations for filing amended returns. C. Only when a marriage has been annulled. D. An estate's personal representative may amend a joint return elected by the surviving spouse to a separate return for the decedent.

c (Since Domenico and Rosemarie are married, they can file either jointly or separately. If Rosemarie does not agree to file jointly with Domenico, both taxpayers must file MFS. The filing requirement threshold for married filing separately in 2020 is $5, so both spouses have a filing requirement.)

9. Rosemarie, age 65, and Domenico, age 72, were married on December 26, 2020. They have no dependents. Rosemarie had wages of $2,000, and Domenico had Social Security income of $19,000 for the year. Domenico wants to file jointly, but Rosemarie wants to file separately. Which of the following statements is correct? A. Domenico is required to file a tax return using the MFS status. Rosemarie is not required to file a return. B. Domenico may claim Rosemarie as a dependent, as long as she does not file her own separate return. C. Domenico and Rosemarie are both required to file tax returns, and they must both file MFS. D. Domenico and Rosemarie may both file as single since they were married for less than one month during the taxable year.

strict, joint, separate, due date, april 15

Amending Filing Status MFJ -> MFS There are rules for when married taxpayers are allowed to change their filing status. Although it is possible to amend a person's filing status, there are ___ rules for doing so. Taxpayers generally cannot change from a ___ return to a ___ return after the ___ ___of the return. For example, if a married couple files a joint, and subsequently decide they wanted to file separately instead, they would have only until ___ ___, (the due date of the original return) to file amended returns using the MFS filing status.

null, void, unmarried, retroactive, amended, head of household

Annulment Annulment is a legal procedure for declaring a marriage ___ and ___. If a taxpayer obtains a court decree of annulment that holds no valid marriage ever existed, the couple is considered ___ even if they filed joint returns for earlier years. Unlike divorce, an annulment is ___. Taxpayers who have annulled their marriage must file ___ returns (Form 1040X), claiming single (or head of household status, if applicable) for all the tax years affected by the annulment that are not closed by the statute of limitations. Example: Nora and Enzo were granted an annulment on October 31. They were married for two years. Enzo has sole custody of one son from a prior relationship. Nora must file as single and must amend the prior two years' tax returns to single as well. Enzo must also amend his joint returns. If he otherwise qualifies, Enzo can amend his returns to ___ ___ ___ filing status, claiming his son as a dependent.

1040X, before, MFS, responsible

Example: Alvin and Darla are married and live in Florida. They file their tax return jointly, on March 10. Later, Darla discovers that Alvin may not be reporting all the income from his business, and she is afraid of being audited in the future. Darla decides to quickly amend her joint return to a separate return by filing a Form ___ on March 15. Since she filed her amended return ___ the filing deadline (of April 15), the IRS will process the return, and her filing status will be adjusted to ___, making her ___only for her own tax liability.

single, jointly, separately, head, dependent child, lowest

Filing Status There are five filing statuses: ___ Married filing ___ Married filing ___ ___ of household Qualifying widow(er) with ___ ___ A taxpayer may be able to claim more than one filing status. Usually, the taxpayer will choose the filing status that results in the ___tax.

HOH, live, half, head of household

Dependent Parents Dependent Parents: If a taxpayer's qualifying person is a dependent parent, the taxpayer can file as ___ even if the parent does not ___ with the taxpayer. The taxpayer must pay more than ___ the cost of keeping up a home that was the parent's main home for the entire year. This rule also applies to a parent in a rest home. A qualifying "parent" may be a stepparent, in-law, or grandparent who is related to the taxpayer by blood, marriage, or adoption. Example: Greta is 54 years old and single. She pays the monthly bill for Shasta Pines Nursing Home, where her 80-year-old mother lives. Greta's mother has lived at Shasta Pines for two years and has no income. Since Greta pays more than half of the cost of her mother's living expenses, Greta qualifies for ___ ___ ___ filing status, even though her mother lives in a retirement home.

HOH, resident, child, not, does not

Disregard NRA Spouses Nonresident Alien Spouses: Special Rules A taxpayer who is married to a nonresident alien spouse may elect to file as ___ by "disregarding" the nonresident alien spouse. This is a unique rule that only applies to taxpayers who are married to nonresident aliens. This is true even if both spouses lived together throughout the year. The taxpayer must not elect to treat the spouse as a ___, and the taxpayer must have a qualifying ___ (or another qualifying dependent, such as a parent) to qualify for the HOH status. The taxpayer's nonresident alien spouse is ___ a qualifying person for head of household purposes. The taxpayer must have another qualifying person and meet the other tests to be eligible to file as a head of household. Example: Two years ago, Wharton, a U.S. citizen, met and married Paloma, a nonresident alien who is a citizen of Greenland. The couple lived together in Greenland while Wharton was on sabbatical from his university teaching position. They had a son, who was born on January 18. Paloma ___ ___ wish to file jointly with Wharton and does not wish to make the election to be treated as a U.S. resident, because she does not want to pay tax on her worldwide income, as she would be required to do if she filed jointly with Wharton. Wharton can file as head of household and claim his son as a dependent, even though he and Paloma lived together all year, because Paloma is a nonresident alien.

deceased, joint, full year, amended

Example A notable exception to this rule allows a personal representative for a ___ taxpayer to change from a ___ return, elected by the surviving spouse, to a separate return for the decedent for up to a year after the filing deadline. Example: Purvis and Bianca have always filed jointly. Bianca dies suddenly on February 1 2020, and her last will and testament names Laura, her daughter from a previous marriage, as the executor of her estate. Purvis files a joint return with Bianca for the tax year 2020, but Laura, as the executor, decides that it would be better for her deceased mother's estate if Bianca's final tax return were filed as MFS. Laura files an amended return claiming MFS status for Bianca and signs the return as the executor. Laura has a ___ ___ after the filing deadline to submit the ___ return.

qualifying person

Example TP owns home and lives with fiancee and fiancees son. TP provides more then 50% of support (home groceries utilities mortgage) to fiancee. Fiancee provides more than 50% of support to son. Can both claim hh status? TP claim hh for fiancee and then fiancee can claim hh for son? Is the son the taxpayer's child, or is it not his kid? If the child is not his, then there is no Head of Household in this scenario. A "fiancee" is not a ___ ___ for HOH status. It has to be someone related by blood, marriage, or adoption. And if the fiancee is not paying the costs of maintaining the home, then she is not HOH, either. Neither one is. The mother of the child can certainly claim her own child and file Single and get the credits that come with a dependent child.

A, G, teachers, temporary, two, five, nonresident alien,

Exempt Individuals Numerous exceptions are considered when counting days for the substantial presence test. Is an exempt individual. Exempt individuals include aliens who are: Foreign government-related individuals in the U.S. temporarily under an "___" or "___" visa (such as foreign ambassadors and other diplomats); ___ on ___ visas; Visiting Scholars or researchers (scholars are exempt from the substantial presence test for ___ years; Students on temporary visas who do not intend to reside permanently in the U.S. (students are exempt from the substantial presence test for ___ years). If the taxpayer does not meet either the green card test or the substantial presence test, he is considered a ___ ___ for tax purposes and is subject to U.S. income tax only on his U.S. source income.

lower, higher, half, qualifying person

Head of Household (HOH) A taxpayer who qualifies to file as head of household will usually have a ___ tax rate than a single or MFS taxpayer and will receive a ___ standard deduction. The head of household status is available to taxpayers who meet all of the following requirements: The taxpayer must be single, divorced, legally separated, or "considered unmarried" on the last day of the year. The taxpayer must have paid more than ___ the cost of keeping up a home for the year. The taxpayer must have had a ___ ___ living in his home for more than half the year. There are exceptions for temporary absences, or for a qualifying parent, who does not have to live with the taxpayer. This would include hospitalization and stays in a nursing home.

20300

Head of household (65 or older: $___)

18,650

Head of household: $___

separate, joint, 1040X, three, extensions

MFS - MFJ To change from ___ returns to a ___ return (MFS to MFJ), taxpayers must file an amended return using Form ___, and may do so at any time within ___ years from the due date of the separate returns (not including ___).

benefits, combined, one, MFS, spouses, common, divorced, interlocutory, deceased, not remarried

Married Filing Jointly (MFJ) The "married filing jointly" status typically provides more tax ___ than filing a separate return. On a joint return, spouses report all of their ___ income, allowable expenses, exemptions, and deductions. Spouses can file a joint return even if only ___ spouse had income. If one spouse does not wish to file jointly, then both spouses must default to ___, (unless one qualifies for a different filing status). Live together as married ___, Live together in a ___-law marriage recognized in the state where they now reside or in the state where the common law marriage began, Live apart but are not legally separated or ___, or Are separated under an ___ (not final) divorce decree. In addition, a widowed taxpayer may use the married filing jointly status and file jointly with their ___ spouse, if the taxpayer's spouse died during the year and the taxpayer has ___ ___ as of the end of the year.

choose, separate, agree, forced, responsible, own, separately, jointly

Married Filing Separately (MFS) The MFS status is for taxpayers who are married and either: ___ to file ___ returns, or Do not ___ to file a joint return. If one spouse chooses to file MFS, the other is ___ to do the same, since a joint return must be signed by both spouses. The MFS filing status means the two spouses report their own income, exemptions, credits, and deductions on separate returns, even if one spouse had no income. This filing status may benefit a taxpayer who wants to be ___ only for his ___ tax, or if it results in less tax than filing a joint return. Typically, a married couple will pay more tax on a combined basis when filing ___, than they would by filing ___.

married, qualifying widow(er)

QUALIFYING WIDOW(ER) WITH A DEPENDENT CHILD Qualifying widow(er) with a dependent child is the least common filing status. A qualifying widow(er) receives the same standard deduction as ___ taxpayers who file jointly. In the year of the spouse's death, a taxpayer can generally file a joint return. However, if a surviving spouse remarries before the end of the year, the married filing separately status must be used for the decedent's final return. For each of the two years following the year of the spouse's death, the surviving spouse can use the ___ ___ filing status if he has a qualifying dependent and does not remarry. After two years, the taxpayer's filing status converts to single or HOH, depending upon which status applies.

end, joint, child, does not, foster child, furnished

QW Filing Status To be eligible for the qualifying widow(er) filing status, the taxpayer normally must: Not have remarried before the ___ of the year. Have been eligible to file a ___ return for the year the spouse died; (it does not matter if a joint return was actually filed). Have a qualifying ___ for the year. A qualifying child can be a child, adopted child, or a stepchild, but ___ ___ include a ___ ___ for the purposes of this filing status. Have ___ over half the cost of keeping up the qualifying child's home for the entire year.

MFJ, MFS, head of household, single

QW Filing Status Filing Status After the Death of a Spouse (with Dependent Child) Tax Year Filing Status Year of death ___ or ___ 1st year after death Qualifying widow(er) with dependent child* 2nd year after death Qualifying widow(er) with dependent child* 3rd and subsequent years after death ___ ___ ___ or ___

child, dependent, parent

Qualifying Person The qualifying person for HOH filing status must generally be related to the taxpayer either by blood, adoption, or marriage. However, a foster child also qualifies if the child was legally placed in the home by a government agency. For purposes of the head of household status, a "qualifying person" is defined as: .A qualifying ___, A married child who can be claimed as a ___, or A dependent ___, A qualifying relative that meets certain relationship tests A taxpayer's qualifying person may include: a child or stepchild, sibling or step-sibling, or a descendant of any of these. For example, a niece or nephew, stepbrother or stepsister, or grandchild may all be eligible as qualifying persons for the HOH filing status.

24800

Qualifying widow(er) with dependent child: $___

26100

Qualifying widow(er) with dependent child:(65 or older $___).

alien, nonresident, resident, worldwide, within, legal

Residency Determining Residency for Tax Purposes To file an accurate tax return, a taxpayer must determine whether he is considered a resident or a nonresident. There are multiple types of tax residency. For IRS purposes, an "___" is an individual who is not a U.S. citizen. Aliens are further classified as "___" aliens and "___" aliens. Residency status is important because these taxpayers are taxed in different ways: Resident aliens are generally taxed on their ___ income, the same as U.S. citizens. Nonresident aliens are taxed only on their income from sources ___ the United States and on certain income connected with the conduct of a trade or business in the U.S. Dual-status aliens are those that are both nonresident and resident aliens during the same tax year. Different rules apply for the part of the year a taxpayer is a U.S. resident and the part of the year he is a nonresident. Residency for IRS purposes is not the same as ___ immigration status. An individual may be considered a U.S. resident for tax purposes, based upon the time he spends in the United States, regardless of immigration status.

entire, last, unmarried, separated, divorced

Single A taxpayer is considered single for the ___ tax year if, on the ___ day of the tax year, he or she was: ___, Legally ___ under a decree of divorce or separate maintenance, Legally ___

14050

Single (65 or older: $___)

12400

Single: $___

green, presence, green, lawful permanent resident

Tax Residency Tests A taxpayer is considered a nonresident alien for tax purposes unless he meets at least one of two tests: the ___ card test or the substantial ___ test. ___ Card Test An alien taxpayer is automatically considered a U.S. resident if he is a "___ ___ ___" of the United States at any time during the tax year.

resident, tax, 31, 183, three, 1/3, 1/6, resident alien

Substantial Presence Test An alien taxpayer without a green card is considered a U.S. ___ for ___ purposes only if he meets the substantial presence test for the calendar year. To meet this test, he must be physically present in the United States for at least: ___ days during the current tax year (2020), and ___ days during the ___-year period, which includes = the current year (2020) and the two years immediately preceding the current year (2019 and 2018). For purposes of the 183-day requirement, all the days present in the current year are counted, along with: ___ of the days present in the previous year (i.e., 2019), and ___ of the days present in the second year before the current year (i.e., 2018). If an individual meets the requirements of the "substantial presence" test, the taxpayer is considered for federal tax purposes a ___ ___ of the United States, even though he or she may not have legal residency in the United States.

400

There are different requirements for self-employed taxpayers. Generally, a taxpayer is required to file a tax return if he has net self-employment earnings of $___ or more. Review the additional filing requirements in the book to see other special circumstances that will trigger a filing requirement.