1 personal exemptionwilliam does not pay over half of

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1 personal exemption—William; does not pay over half of support of his mother and she has too much h. income; $5,700 standard deduction. 3 personal exemptions—Billy Bob, Mary Sue, Jackie Jo; Jackie Jo is a member of the household; i. $11,400 standard deduction. 2 personal exemptions—Benson, Chester; scholarship does not count in support test; $8,350 standard j. deduction—head of household. 1 personal exemption—Benson; support test not met (money spent from savings counts in support k. determination); $5,700 standard deduction; Chester is not a qualifying child or a qualifying relative, so Benson fi les as single. 2 personal exemptions—Richard, son of deceased friend; if son of deceased friend earned more than l. $3,650, then he would not qualify as a dependent; $8,350 standard deduction; quali fi es as head of household because son of deceased friend meets the qualifying relative test since he lived with Richard the entire year. 6 personal exemptions—Dan, Pam, 3 foster children, son; $11,400 standard deduction. m. De fi nition of Filing Status Filing status is determined by a taxpayer’s marital status and then by other factors within that marital status. 22. A taxpayer’s fi ling status determines from which tax table or tax rate schedule the tax liability is computed. The taxpayer attempts to qualify for the fi ling status generating the least amount of tax. Determining Filing Status Since Darlene is still legally married, she may fi le a joint return with her husband. Darlene also quali fi es 23. as a married individual fi ling separately. It is unlikely that Darlene would choose the latter status as she quali fi es as an abandoned spouse, which allows her to be classi fi ed as unmarried. As an unmarried taxpayer she is eligible for single status or head of household status. In that case, Darlene’s best fi ling status would be head of household. Head of Household Expenses v. Support Test Expenses Only those expenses incurred in the support of a dependent are included in the support test. Head of 24. household expenses include only the expenses incurred in running the household. Dependency expenditures for food consumed in the household would count in both computations. Expenditures for food consumed by the dependent outside the household would count only for the dependency exemption. Food consumed by other household members would count only in the household costs while only the portion allocated to the dependent would enter into the dependency computation. Return Requirements: Minimum Gross Income No. Individuals receiving less than certain income amounts are not required to fi le tax returns. Income fi ling 25. requirements are based on the basic standard deduction plus taxpayer exemptions.
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38 CCH Federal Taxation—Basic Principles Chapter 3 © 2009 CCH. All Rights Reserved.
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