Federal Taxation Outline
I. Filing Requirements
a. Tax return is required for every individual who has gross income that equals or exceeds the sum of the exemption amount plus the applicable standard deduction.
b. Pg. 3-25 Lists the Filing Levels
c. Dependents (pg. 3-26)
i. Must file a return if:
1. Earned Income is less than $5,000 (Standard Deduction) (unlike the $8,000 for others)
2. Unearned Income is more than $850
d. Filing Status
i. For Divorces: If on Dec. 31 you are divorced, then you must file single.
ii. Single (pg. 3-28)
iii. Married (pgs. 3-28, 3-29))
1. Separate
2. Joint
iv. Head of Household: Middle Rates (pg. 3-30)
1. Unmarried
a. Unless you are abandoned
2. Maintain the Household
3. Live with a Dependent (Dependent’s permanent residence for over ½ the year).
a. Two Exceptions:
i. Parent is the qualifying relative; the parent does not have to live with you as long as you are paying for them.
ii. Abandoned Spouse does not have to be unmarried (pg. 3-31)
1. Not file a joint return
2. Paid more than ½ the cost of maintaining the home
3. Spouse did not live in the home during the last six months of the tax year.
4. Home was principal residence of the taxpayer’s son, daughter, step-son, step-daughter, foster child, or adopted child for more than half the year, and the child can be claimed as a dependent.
II. Personal Exemptions
a. Dependent (pg. 2-18 and 3-11)
i. A taxpayer is permitted to claim an e
Niece or Nephew
2. Abode
a. Have to live with you for more than ½ the year, minus temp. absences.
3. Age
a. Under age 19 (not 19)
b. Exception: full-time student up to age 23 (not 24)
c. If he child is disabled, they can qualify at any age.
4. Support (pg. 3-14)
a. Kid cannot support himself (ex. Is a child actor who is making more money than the parents.
b. Scholarships are excluded
5. Joint Return
a. Cannot file joint return if married
b. If there is a joint return, but the only reason they are filing is to get back taxes that were withheld (hence they did not make enough to have to file a return, but are doing so to get back those taxes), then it is ok for them to file joint.
6. Citizenship of Residency
a. U.S., Canada, or Mexico
iv. Qualifying Relative (pg. 3-13)
1. Support Test (pg. 3-14)
a. Person has to provide more than ½ of the dependent’s support
i. Food
ii. Shelter
iii. Clothing
iv. Medical Care
v. Toys
vi. Dental Care
vii. Education
1. Note: A Scholarship is not computed to figure out if person provided more than ½ of the dependent’s support.
If two or more people are contributing to the support of a qualifying relative, and neither is contributing more than ½ individually, then people can join together
