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Unformatted text preview: Becker 2009 Edition Chapter 1 Page 1 of 14 Individual Taxation Filing Status Must file tax return if income is equal to or greater than sum of: Personal exemption + Standard deduction + Additional standard deduction for over 65 or blind Exceptions: - Earned from self-employment at least $400 - Can be claimed as dependents on another taxpayers return, have unearned income, and gross income of $900 - Who receive advance payments of earned income credit Filing due date: April 15 Automatic six-month extension. Must file extension by April 15. Even with extension, due date for tax payments if April 15. Filing Status : square4 Single/End of Year Test: Single on December 31 OR Legally separated square4 Joint Returns/End-of-Year Test: (even if married and living apart, but not legally separated/divorced) Married on December 31. If one spouse dies during the year, a joint return may be filed. square4 Married Filing Separately square4 Qualifying Widow(er) (surviving spouse) o For two years after spouses death: uses joint tax return standard deduction and rates (not the exemption for deceased spouse) o Principal residence for dependent child: The surviving spouse must maintain a household that, for the whole entire taxable year, was the principal place of abode of a son, stepson, daughter, or stepdaughter (blood or adoption). square4 Head of Household Following conditions: o Not married or legally separated, or married and lived apart from spouse for last six months. Not a qualifying widower. Not a non-resident alien. Maintains as his or her home a household that, for more than half the taxable year, is the principal residence of: square4 Son/Daughter (Working Families Act): example: divorced mom square4 Father or Mother (not required to live with): example: nursing home square4 Dependent Relatives (must live with): Cousins, foster parents, and unrelated dependents do NOT qualify. Required time period for different filing statuses: W W idow = W hole year H H ead of household = H alf a year (more than) Individual Taxation Exemptions Generally, an individual is entitled to a personal exemption that is indexed annually for inflation. For 2008 = $3500. Persons eligible to be claimed as dependents on anothers tax return will not be allowed a personal exemption on their own returns. Each spouse receives personal exemption. Spouse as personal exemption on a separate return Married taxpayer, who files separately, may claim the spouses personal exemption if both of the following tests are met: Becker 2009 Edition Chapter 1 Page 2 of 14 - Taxpayers spouse has no gross income AND - AND taxpayers spouse was not claimed as a dependent of another taxpayer....
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- Spring '10