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RTRP Part One
Wiley RTRP Exam Review Ch 1 - 3
| Term | Definition |
|---|---|
| Rules for who must file a TR | SE net earnings > $400 Wages of $108.25 or more for church related org exempt from FICA Received Advance EITC Owe special taxes: 1. AMT 2. Addlt tax/penalties on IRA 3. Employment tax on household employees 4. Fica on tips 5. Addtl tax on HSA |
| Filing Threshold for Single DEPENDENT | Unearned Income > $950 or EI > $5950 or Gross Income > $950 or EI up to $5650, plus $300 |
| Reasons to file TR even though not required | 1. Request refund 2. Obtain refundable credits 3. Establishing a capital loss |
| Penalty for late payment | 1/2 of 1% of tax not paid by due date; charged each month or part month not paid; max 25% |
| Penalty for late filing | 5% of amount due for each month or part month return is late; max 25% (if > 60 days late, min is smaller of $135 or balance due. |
| Limitations on who can file 1040EZ | Single, MFJ; <65; not blind Taxable Income < 100k No itemizing Only credit is EITC no dependents No SS benefits, dividends, retirement, cap gain |
| Limitations on who can file 1040A | Any status, dependents Taxable income < 100k No itemized deductions |
| Special filing rules for Resident aliens | Taxed same as US citizens |
| Special filing rules for Non-resident aliens | Aliens who did not meet green card test or substantial presence test at any time during the year 1040NR(-EZ) |
| Substantial presence test | 1. Physically here at least 31 days OR 2. Phys present at least 183 days during last 3 yrs counting (all curr yr, 1/3 days 1yr ago, 1/6 2 yrs ago) OR 3. physi present 183 curr yr OR 4. Curr yr do not have tax home or closer connection in foreign countr |
| Special filing rules for Dual-Status Aliens | Are aliends who are residents for part of yr Common in yr when TP arrives or departs US. If residned at eoy, file form 1040 and attach 1040NR(-EZ). If nonresident at eoy, file 1040NR(-EZ) and attach 1040 as a stmt. |
| 2 Reasons to file MFS | 1. To avoid joint and several tax liability 2. To save taxes (if one has lower income and higher medical, or misc item deductions or cas & theft losses |
| Community property states | AZ CA ID LA NV NM TX WA WI |
| Rules for being Considered Unmarried | 1. TP files MFS 2. TP pd > .5 keeping home 3. spouse didn't live with during last 6mths 4. TP home was tp child, stepchild, foster child for > .5 yr 5. TP can claim exemption for child |
| Rules for claiming Head of Household | 1. Unmarried or Considered Unmarried 2. Cost of Keeping home - tp pays > .5 Public assistance is part of total but not that tp paid 3. Qualifying person lived in home > .5 yr |
| Rules for Qualifying Person HOH | For all you must be able to claim exemption (ex: single) 1. Qualifying child who is single or married 2. Qualifying relative who is your mother or father 3. Qualifying relative not parent who lived with you > .5 yr |
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