ACC 343 Exam 1 Guide

ACC 343 Exam 1 Guide - ADDITIONAL NOTES Standard Deduction...

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ADDITIONAL NOTES Standard Deduction Standard deduction (which is compared with the itemized deductions) includes the basic standard deductions AND any additional standard deductions (i.e. for blindness, old age) …it is the SUM of that is compared to itemized deductions Additional standard deductions for age and blindness can only be claimed for yourself or your spouse o Age only at the time-of-death If you are married and file separately and your spouse itemizes, you must itemize as well, regardless of what is higher Qualifying Child Test S – Support – child must not provide > ½ of own support P – Principal Abode – same as taxpayer for > ½ yr A – Age – <19 or <24 if fulltime student (no limit for the permanently disabled) R – Relationship – blood-related child, or descendent of a blood relative (or stepson, stepdaughter, etc.); also adopted children and foster children Qualifying Relative R – Relationship/Member of household – any blood relative, step-relative, or in-law; nonrelated must be member of household for entire year N – Not a QC – cannot be a qualifying child of the taxpayer or of any other taxpayer G – Gross Income – gross income must be less than personal exemption ($3,650) S – Support – taxpayer must furnish over ½ of support of dependent (compared to total support from all sources received)…amount spent on support is what is considered *entertainment, fixed assets like cars, and housing are all considered items of support **welfare payments included, scholarships not included *** SOCIAL SECURITY MEDICARE BENEFITS ARE DISREGARDED IN SUPPORT CALCULATION Special Rules for Dependents 1. Temporary absences are ok if they are < 6 mo. 2. If dependent dies during the year, taxpayers still gets exemption if dependent lived in same household for preceding portion of year 3. No exemption allowed for any dependent filing a joint return with a spouse 4. Must be a citizen of the United States or a contiguous country a. Doesn’t apply if dependent occupies same abode as taxpayer, who is an American citizen 5. Student – must be enrolled for some part of 5 months of each year in classes and they cannot be primarily night-classes (MUST BE FULLTIME) Rules for Multiple Support Agreements 1. No one person contributes to over half the person’s support 2. Each member of the group could have claimed individual as a dependent if support test were met
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3. Member claiming dependent contributes to over 10% of dependent’s support 4. Other contributing members sign document allowing this arrangement Abandoned Spouse Requirements – Head of Household 1. File a separate return 2. Taxpayer’s spouse cannot be member of household for last 6 months of the year 3. Taxpayer must furnish over half the cost of maintaining home 4. Taxpayer must provide principal abode for dependent child for more than half the year *IF a taxpayer does not qualify as an abandoned spouse per the rules, they would then qualify as “Married, Filing Separately”
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ACC 343 Exam 1 Guide - ADDITIONAL NOTES Standard Deduction...

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