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EA Unit One - Filing Requirements - Premade Flashcards
Terms in this set (89)
How can using a prior year's return for comparison help a tax return preparer?
It can prevent gross mathematical errors and identify significant changes.
If there were no significant changes between the current and prior year's return, then the current-year return should result in
A similar amount of tax liability or refund as the previous year.
A taxpayer's personal information (e.g., date of birth, age, marital status, dependents) is used to verify the identity of
The taxpayer and related dependents.
How can an individual's age be relevant to a tax return?
The age of an individual determines if (s)he qualifies for additional deductions (65 and over), retirement distributions, dependency, etc.
If a taxpayer is an alien (not a U.S. citizen), (s)he is considered a nonresident alien unless either of which two tests is met?
The green card test
The substantial presence test
Which expenses are not deductible on a tax return?
A personal, living, or family expense is not deductible unless the Code specifically provides otherwise. Nondeductible expenses include:
Rent and insurance premiums paid for the taxpayer's own dwelling;
Life insurance premiums paid by the insured;
Upkeep of an automobile;
Payments for food, clothing, or domestic help.
What are some items from the prior-year return that may be needed to complete the current-year return?
State income tax refund
AMT for credit
Gain or loss carryover
Charitable gift carryover
What are the reporting requirements for individuals who do business in the U.S. but have an ownership interest in a foreign account of over $10,000?
Generally, any U.S. citizen, resident, or person doing business in the United States who has an ownership interest in a financial account in a foreign country with an aggregate value in excess of $10,000 at any time during the calendar year must file a Form FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBAR), reporting certain information with respect to that account by April 15 of the subsequent year or the extension due date of October 15.
Individuals with specified foreign financial assets with an aggregate value greater than $50,000 at the last day of the year or more than $75,000 at any time during the tax year must file using
Two individuals are treated as legally married for the entire year if, on the last day of the tax year, they are
Legally married and cohabiting as spouses,
Legally married and living apart but not separated pursuant to a valid divorce decree or separate maintenance agreement, or
Separated under a valid divorce decree that is not yet final.
If a spouse dies, when is the status for each spouse determined?
Unless the surviving spouse remarries before the end of the tax year (in which case the decedent files married filing separate) status is determined when the spouse dies.
Under what circumstance may a joint return be filed if one of the spouses is a nonresident alien at any time during the tax year?
A joint return is not allowed if one spouse was a nonresident alien (NRA) at any time during the tax year unless the U.S. citizen and the NRA spouse so elect and agree to be taxed on their worldwide income.
If one spouse files separately, can the other spouse file jointly?
No. If one spouse files separately, so must the other.
If a joint return has been filed for the year and the time for filing the return of either spouse has expired, may the spouses amend their returns to file separately?
No, they may not amend their returns to file separately.
May married individuals who filed separate returns later file a joint (amended) return?
Yes, and payment of the entire joint tax liability is not required at the time the amended return is filed.
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