Pub 17 - Pt. 1, Income Tax Return
MFS capital loss deduction limit is
$1,500
Married persons filing separate returns who lived apart at all times during the year are each allowed a ________ maximum special allowance for losses from passive real estate activities
$12,500
If you actively partici- pated in a passive rental real estate activity that produced a loss, you can generally deduct the loss from your nonpassive income, up to
$25,000 called a special allowance
MFJ capital loss deduction limit is
$3,000
penalty for filing a frivolous tax return is
$5,000
If you are in the process of adopting a child who is a U.S. citizen or resident and can't get an SSN for the child until the adoption is fi- nal, you can apply for an
-ATIN -File Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adop- tions
Even if you have a qualifying child or qualifying relative, you can claim that person as a depend- ent only if these three tests are met.
-Dependent taxpayer test. -Joint return test. -Citizen or resident test.
Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. They lived with you all year. Neither is required to file a tax return. They don't have a child. They file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Are your son and/or wife a dependent?
-The exception to the joint return test doesn't apply, so you can't claim either of them as a dependent. -Because claiming the American opportunity credit is their reason for filing the return, they aren't filing it only to get a refund of income tax withheld or estimated tax paid.
You can appoint an agent to sign your return if you are:
-Unable to sign the return because of dis- ease or injury, -Absent from the United States for a contin- uous period of at least 60 days before the due date for filing your return, or -Given permission to do so by the IRS of- fice in your area.
You are considered un- married for the whole year if, on the last day of your tax year, you are either:
-Unmarried, or -Legally separated from your spouse under a divorce or separate maintenance decree. State law governs whether you are married or legally separated under a divorce or separate maintenance decree.
You are considered married for the whole year if, on the last day of your tax year, you and your spouse meet any one of the following tests.
-You are married and living together. -You are living together in a common law marriage recognized in the state where you now live or in the state where the com- mon law marriage began. -You are married and living apart, but not legally separated under a decree of di- vorce or separate maintenance. -You are separated under an interlocutory (not final) decree of divorce.
You are considered unmarried on the last day of the tax year if you meet all the following tests.
-You file a separate return -You paid more than half of the cost of keeping up your home for the tax year. -Your spouse didn't live in your home during the last 6 months of the tax year -Your home was the main home of your child, stepchild, or foster child for more than half the year. -You must be able to claim the child as a dependent.
Qualifying Child: Relationship Test
-Your son, daughter, stepchild, foster child, or a descendant (for example, your grand- child) of any of them, or -Your brother, sister, half brother, half sis- ter, stepbrother, stepsister, or a descend- ant (for example, your niece or nephew) of any of them.
qualified hospitalization means:
-any hospitalization outside the US -up to 5 years of hospitalization in the US
refunds can be deposited into:
-check form -IRA (not simple IRA) -treasurydirect online account -direct deposit
if filing MFS you can't claim
-credit for child and dependent care expenses -earned income credit -exclusion or credit for adoption expenses -education credits (AOF and Lifetime learning credit), the deduction for student loan interest, or the deduction for tuition and fees -cant exclude interest income from qualified US savings bonds for higher education expenses
other forms of income included in gross income
-garnished wages -debts paid for you (canceled debt or person pays your debt not as a gift or loan) -payment to a third party -payment to an agent -check received or available
If your spouse died during the year, you are consid- ered
-married for the whole year for filing status purposes. -If you didn't remarry before the end of the tax year, you can file a joint return for yourself and your deceased spouse -If you remarried before the end of the tax year, you can file a joint return with your new spouse. Your deceased spouse's filing status is married filing separately for that year.
even if you don't have to file, you should file a federal income tax return to get money back if these conditions apply
1, federal income tax withheld or made estimated tax payments 2. you qualify for the earned income credit 3. qualify for the ACTC 4. qualify for the premium tax credit 5. qualify for health coverage tax credit 6. qualify for AOC 7. qualify for the credit for federal tax on fuels
To qualify as a student, your child must be, during some part of each of any 5 calendar months of the year:
1. A full-time student at a school that has a regular teaching staff, course of study, and a regularly enrolled student body at the school; or 2. A student taking a full-time, on-farm training course given by a school described in (1), or by a state, county, or local government agency. -The 5 calendar months don't have to be consecutive.
Five tests must be met for a child to be your qualifying child
1. Relationship 2. Age 3. Residency 4. Support 5. Joint return.
You may be able to file as head of household if you meet all the following requirements.
1. You are unmarried or "considered unmarried" on the last day of the year. 2. You paid more than half of the cost of keeping up a home for the year. 3. A qualifying person lived with you in the home for more than half the year (except for temporary absences, such as school). However, if the qualifying person is your dependent parent, he or she doesn't have to live with you.
You should correct your return if, after you have filed it, you find that:
1. You didn't report some income, 2. You claimed deductions or credits you shouldn't have claimed, 3. You didn't claim deductions or credits you could have claimed, or 4. You should have claimed a different filing status. (Once you file a joint return, you can't choose to file separate returns for that year after the due date of the return. However, an executor may be able to make this change for a deceased spouse.)
Whether you must file depends on these 3 factors
1. gross income 2. filing status 3. age
You must file form form 1040 and Schedule SE (self employment tax) if:
1. net earning from self employment were more than $400 (excluding church employee income) 2. church employee income of $108.28 or more
Gross income includes part of your social security benefits if:
1. you were married, filing separate return and lived with your spouse anytime doing the year 2. half of your social security benefits plus other gross income and any tax-exempt interest is more than $25,000 ($32,000 if MFJ)
If your failure to file is due to fraud, the penalty is
15% for each month or part of a month that your return is late, up to a maximum of 75%.
You may be eligible to use qualifying widow(er) as your filing status for how long?
2 years following the year your spouse died.
You can split a refund between ____________ accounts
2-3
should keep records for
3 years
Form _________ to file a 6 month extension
4868
If you don't file your return by the due date (including extensions), you may have to pay a failure-to-file penalty. The penalty is usually
5% for each month or part of a month that a return is late, but not more than 25%.
if your 65th birthday is Jan 1, 2021, how old are you for 2020 tax return
65
Must send in a paper form __________ if you have to attach certain forms or other docs that can't be electronically filed
8453
Use Form ______ to notify IRS of address change
8822
The term "dependent" means:
A qualifying child, or A qualifying relative.
taxes are due
April 15th
Your girlfriend lived with you all year. can she be a qualifying relative for HOH purposes?
Doesn't meet relationship test.
No SSN?
File Form SS-5, Application for a So- cial Security Card, with your local SSA office to get an SSN for yourself or your dependent. It usually takes about 2 weeks to get an SSN.
Request for Inno- cent Spouse Relief
Form 8857
if you are a US citizen living outside of the country or in military stations outside of the country your filing due date is
June 15th
Your 23-year-old brother, who is a student and unmarried, lives with you and your spouse, who provide more than half of his support. He isn't disabled. Both you and your spouse are 21 years old, and you file a joint return. Is he your qualifying child?
NO -because he isn't younger than you or your spouse
can you claim a married person as a dependent if he or she files a joint return.
NO, EXCEPT: you can claim a person as a dependent who files a joint return if that person and his or her spouse file the joint return only to claim a refund of income tax withheld or estimated tax paid.
Your girlfriend lived with you all year with her 10-year-old son. He is your girlfriend's qualifying child. Is he your qualifying child or relative for HOH purposes?
No -Not qualifying relative because he is your girlfriends qualifying child
Your son turned 19 on December 10. Is he a qualifying child?
No, Failed age test -Unless he was permanently and totally disabled or a student,
If you don't include your SSN or the SSN of your spouse or dependent as required, you may have to
Pay a penalty
you should file if you are a resident of the US or __
Puerto Rico
Penalty for failure to file within 60 days of the due date?
Smaller of $435 or amount of tax owed
Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. They lived with you all year. Neither is required to file a tax return. They don't have a child. Taxes were taken out of their pay so they filed a joint return only to get a refund of the withheld taxes. Are your son and/or wife a dependent?
The exception to the joint return test applies, so you can claim each of them as a dependent even though they file a joint return.
Exception from dependent - citizen or resident test for adopted child.
This test is met if the child lived with you as a member of your household all year. This exception also applies if the child was lawfully placed with you for legal adoption.
T or F: You can sign a joint return for your spouse if your spouse can't sign because he or she is serving in a combat zone even if you don't have a power of attorney or other statement.
True
if you or your dependent is a nonresident alien who doesn't have and isn't eligible to get a SSN, file form
W-7 (application for IRS individual taxpayer identification number)
Your unmarried son lived with you all year and was 18 years old at the end of the year. He didn't provide more than half of his own support and doesn't meet the tests to be a qualifying child of anyone else. Is he your qualifying child?
Yes - and, because he is single, your qualifying person for head of household purposes.
Your 23-year-old brother, who is a student and unmarried, lives with you and your spouse, who provide more than half of his support. He isn't disabled. You are 21 and your spouse is 25 years old, and you file a joint return. Is he your qualifying child?
Yes -Because your brother is younger than your spouse, and you and your spouse are filing a joint return.
Dependent - Citizen or Resident Test
You can't claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico.
You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. He earned $25,000 for the year. The couple files a joint return. Can you claim your daughter as a dependent?
You can't claim your daughter as a dependent.
if an agent is signing your return for you:
a power of attorney (POA) must be filed. Attach POA to form 8453
if filing MFS and lived with spouse at any time during the tax year:
a. You can't claim the credit for the elderly or the disabled, and b. You must include in income a greater percentage (up to 85%) of any social security or equivalent railroad retirement benefits you received.
Schedule 1
additional income and adjustments to income
If a child has been placed in your home for purposes of legal adoption and you won't be able to get a SSN for the child in time to file, you may be able to get a _____
adoption taxpayer identification number (ATIN)
If you are a U.S. citizen or resident alien, you must show proof of
age, identity, and citizen- ship or alien status with your Form SS-5.
Community property states include
arizona, california, Idaho, Louisiana, nevada, New Mexico, Texas, Washington, and wisconsin
If you can be claimed as a dependent by another person, you:
can't claim anyone else as a dependent.
if you provided a home for a foreign student, you may be able to take a:
charitable contribution deduction.
Use Form 1040-X to
correct a return you have already filed. An amended tax return can't be filed electronically.
married persons filing separate re- turns who lived together at any time during the year can't claim this special allowance of
cost of keeping up a home
Your filing status for the tax year is determined
dec 31 of the tax year
if you are married filing jointly, the child must be younger than you or your spouse but
doesn't have to be younger than both of you.
if your child was born and died in year of filing and didn't have a SSN
enter "DIED" in column 2 of the dependents section of form 1040 and include a copy of Childs birth certificate, death certificate or hospital records
can Housekeepers, maids, or servant be claimed as dependents?
f these people work for you, you can't claim them as dependents.
Use schedule SE for:
figuring our self employment tax
if you are a resident alien for the entire year, you must
file a tax return following the same rules that apply to US citizens
advance payment of income is generally included in
gross income in the year you receive it
self employed persons must file a tax return if
gross income is at least as much as the filing requirement amount for your filing status and age
You can treat amounts you paid for qualified mortgage insurance as:
home mortgage interest
The penalty for writing a bad check to the IRS
is $25 or 2% of the check, whichever is more
You may be eligible to file as head of household even if the individual who qualifies you for this filing status is born or dies during the year. The child must have:
lived with you for more than half the part of the year he or she was alive.
name change because of marriage, divorce, etc report the change to:
local SSA office before filing your return
If you were a U.S. citizen when your child was born, the child:
may be a U.S. citizen and meet this citizen or resident test (even if the other parent was a nonresident alien and the child was born in a foreign country)
Gross income includes all income you receive in the form of
money, goods, property, and services that isn't exempt from tax Also, income sources outside the US and sale of your main home
the qualifying person must live with you for
more than half the year.
can a foreign student be claimed as a dependent
no
Your unmarried son lived with you all year and was 25 years old at the end of the year and has gross income of $5,000. He didn't provide more than half of his own support and doesn't meet the tests to be a qualifying child of anyone else. Qualifying Child?
no - doesn't meet age test or gross income test
if SSN or name is incorrect on W-2
notify employer or the form-issuing agent ASAP
Cost of keeping up a home
property taxes, mortgage interest expense, rent, utility charges, repairs/maintenance, property insurance, food eaten in the home, other household expenses
John's wife died in 2017. John hasn't remarried. During 2018 and 2019, he continued to keep up a home for himself and his child, who lives with him and whom he can claim as a dependent. For 2017, he was entitled to file a joint return for himself and his deceased wife. For 2018 and 2019, he can file as
qualifying widower
Use form 1040 or 1040-SR to
report all types of income, deductions, and credits
in "filing requirements for dependents" table earned income includes:
salaries, wages, tips, professional fees, and taxable scholarships and fellowship grants
enter any payment you made related to the extension of time to file on
schedule 3 line 10
in "filing requirements for dependents" table unearned income includes:
taxable interest, ordinary dividends, capital gains, unemployment compensation, taxable social security benefits, pensions, annuities, and distributions of unearned income from a trust
If a child has to file a tax return but can't sign the return,
the child's parent, guardian, or another legally responsible person must sign the child's name, followed by the words "By (your signature), parent for minor child."
Filing MFS: If your spouse itemizes deductions, you can't claim
the standard deduction. If you can claim the standard deduction, your basic standard deduction is half of the amount allowed on a joint return.
in "filing requirements for dependents" table gross income includes:
total of your earned and unearned income
Child tax credit. You may be entitled to a child tax credit for each qualifying child who was:
under age 17 at the end of the year if you claimed that child as a dependent.
Married dependent under the age of 65 must file if any of these apply:
unearned income = more than $1,100 earned income = more than $12,200 Gross income = at least $5 and your spouse files a separate return and itemizes deductions Gross income = more than the larger of.. $1,100 or earned income (up to $11,850) + $350
Single dependent under the age of 65 must file if any of these apply:
unearned income = more than $1,100 earned income = more than $12,200 Gross income = more than the larger of.. $1,100 or earned income (up to $11,850) + $350
You are considered _______ if your spouse was a nonresident alien at any time during the year and you don't choose to treat your nonresident spouse as a resident alien.
unmarried for head of household purposes -However, your spouse isn't a qualifying person for head of household purposes.
If you are filing a joint return and your spouse can be claimed as a dependent by someone else:
you and your spouse can't claim any dependents on your joint return.
If you receive a Form W-2, keep Copy C until
you begin receiving social security benefits
Qualifying child: Age Test
• Under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), • A student under age 24 at the end of the year and younger than you (or your spouse, if filing jointly), or • Permanently and totally disabled at any time during the year, regardless of age.
