What situations are out of scope for the VITA/TCE programs?The following are out of scope for this lesson. While this list may not be all inclusive, it is provided for your awareness only.• A spouse who may be relieved of joint liability as an innocent spouse• Depending on your tax assistance program, community property tax laws for married taxpayers who file a separate return from their spouse• Taxpayers who are not certain they are in a common law marriage (rules are complex and differ from state to state)
Filing Status5-10EXERCISE ANSWERSAnswer 1: No, because Sebastian lived with Alexandra for five months, which is less than half the year.Answer 2: Head of Household. Even though Jane is still married to her husband, she meets the requirements to be “considered unmarried” for filing status purposes and qualifies to file as Head of Household. Although technically she could file as Married Filing Separately, it would not be to her advantage to do so.Answer 3: Because he is not married, has no dependents living in his household, and does not claim his parents as dependents, Seth can only file as Single.Answer 4: Because she is legally divorced, Tanya could file as Single. However, because she has children and meets the requirements for Head of Household, she should use this as her filing status because it will result in a lower tax.Answer 5: Although Sydney meets the requirements to file as Single, Head of Household or Qualifying Widower, the Interview Tips will help you to determine that he should use the Qualifying Widower filing status because it will result in the lowest tax.Notes
Personal Exemptions6-1IntroductionIdentifying and entering the correct number of exemptions is a critical component of completing taxpayers’ returns, because each allowable exemption reduces their taxable income. Personal exemptions are reflected in the Exemptions section of Form 1040, page 1. ObjectivesAt the end of this lesson, using your resource materials, you will be able to:• Distinguish between personal and dependency exemptions• Determine if a taxpayer can claim a personal exemption• Determine how many personal exemptions a taxpayer can claimPersonal Exemptions What do I need?□Form 13614-C□Publication 4012□Publication 17Optional:□Publication 501What are exemptions?An exemptionis a dollar amount that can be deducted from an individual’s total income, thereby reducing the taxable income. Taxpayers may be able to claim two kinds of exemptions: • Personal exemptionsgenerally allow taxpayers to claim themselves (and possibly their spouse) • Dependency exemptions allow taxpayers to claim qualifying dependentsThis lesson discusses personal exemptions. The exemption amounts are indexed for inflation and are generally updated every year.