Federal Income Tax Chapter 2. © Copyright 2013 by M. Ray Gregg. All rights reserved. 2 Filing Status For each of the following situations, can Hank and

Federal Income Tax

Chapter 2

© Copyright 2013 by M. Ray Gregg. All rights reserved.

2

Filing Status

For each of the following situations, can Hank and Wynona file a joint return for 20x1? Explain.


3

Filing Status

Hank and Wynona married on December 20, 20x1, after a whirlwind courtship. On December 28, 20x1, following a violent argument, Wynona packed off home to mother, vowing never to return. No legal action was taken during 20x1.Yes.

Married on lastday of year.


4

Filing Status

Hank and Wynona, after years of marriage, were separated under an interlocutory (not final) decree of divorce on December 30, 20x1.

Yes.

Not considered

divorced until final.


5

Filing Status

Hank, while on temporary assignment in England for a large corporation, married Wynona, a citizen of Great Britain. They were still in London at the end of 20x1, but they return to the United States in January 20x2. They made no election for 20x1 to include Wynona’s worldwide income on a U.S. tax return.

No,

but they could if they claimed

her WW income.


6

Filing Status

Hank died on January 2, 20x1, after years of marriage to Wynona. Wynona did not remarry.

Yes.


7

Filing Status

For each of the following situations, a) state Hank’s and b) state Wynona’s filing status for 20x1?


8

Filing Status

Hank and Wynona were divorced on January 14, 20x1. They have no children or other dependents, and they did not remarry during the year.

Hank = Single

Wynona = Single


9

Filing Status

Hank and Wynona separated (not by decree) in May 20x1. They agreed Hank would claim the children as dependents. Wynona provided a home for them. Hank and Wynona will not file as married filing jointly.

Hank = Married Filing Separate

Wynona = Head of Household


10

Filing Status

Hank and Wynona separated (not by decree) in August 20x1. Wynona provided a home and support for the children. They will not file as married filing jointly.

Hank = Married Filing Separate

Wynona = Married Filing Separate


11

Head of Household and Surviving Spouse

• Problem 2 – 44– Allen?

• Yes– Beth?

• No• Aunt must live

with TP– Cindy?

• Consider some other situations


12

X1

H W

Filing Status?

# exm?

Std Ded?

Rate Sch?

Situation 1


13

X1

H W C(15)

Filing Status?

# exm?

Std Ded?

Rate Sch?

Situation 1


14

X1

H W C(15)

Filing Status?

MFJ

# exm?

Std Ded?

Rate Sch?

Situation 1


15

X1

H W C(15)

Filing Status?

MFJ

# exm?

3

Std Ded?

Rate Sch?

Situation 1


16

X1

H W C(15)

Filing Status?

MFJ

# exm?

3

Std Ded?

$12,200

Rate Sch?

Situation 1


17

X1

H W C(15)

Filing Status?

MFJ

# exm?

3

Std Ded?

$12,200

Rate Sch?

Y-1

Situation 1


18

X1 X2

H W C(15)

H W C

Filing Status?

MFJ

# exm?

3

Std Ded?

$12,200

Rate Sch?

Y-1

Situation 2


19

X1 X2

H W C(15)

H W C

Filing Status?

MFJ MFJ

# exm?

3

Std Ded?

$12,200

Rate Sch?

Y-1

Situation 2


20

X1 X2

H W C(15)

H W C

Filing Status?

MFJ MFJ

# exm?

3 3

Std Ded?

$12,200

Rate Sch?

Y-1

Situation 2


21

X1 X2

H W C(15)

H W C

Filing Status?

MFJ MFJ

# exm?

3 3

Std Ded?

$12,200

$12,200

Rate Sch?

Y-1

Situation 2


22

X1 X2

H W C(15)

H W C

Filing Status?

MFJ MFJ

# exm?

3 3

Std Ded?

$12,200

$12,200

Rate Sch?

Y-1 Y-1

Situation 2


23

X1 X2 X3

H W C(15)

H W C

W C

Filing Status?

MFJ MFJ

# exm?

3 3

Std Ded?

$12,200

$12,200

Rate Sch?

Y-1 Y-1

Situation 3


24

X1 X2 X3

H W C(15)

H W C

W C

Filing Status?

MFJ MFJ SS

# exm?

3 3

Std Ded?

$12,200

$12,200

Rate Sch?

Y-1 Y-1

Situation 3


25

X1 X2 X3

H W C(15)

H W C

W C

Filing Status?

MFJ MFJ SS

# exm?

3 3 2

Std Ded?

$12,200

$12,200

Rate Sch?

Y-1 Y-1

Situation 3


26

X1 X2 X3

H W C(15)

H W C

W C

Filing Status?

MFJ MFJ SS

# exm?

3 3 2

Std Ded?

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1

Situation 3


27

X1 X2 X3

H W C(15)

H W C

W C

Filing Status?

MFJ MFJ SS

# exm?

3 3 2

Std Ded?

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1

Situation 3


28

X1 X2 X3 X4

H W C(15)

H W C

W C

W C

Filing Status?

MFJ MFJ SS

# exm?

3 3 2

Std Ded?

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1

Situation 4


29

X1 X2 X3 X4

H W C(15)

H W C

W C

W C

Filing Status?

MFJ MFJ SS SS

# exm?

3 3 2

Std Ded?

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1

Situation 4


30

X1 X2 X3 X4

H W C(15)

H W C

W C

W C

Filing Status?

MFJ MFJ SS SS

# exm?

3 3 2 2

Std Ded?

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1

Situation 4


31

X1 X2 X3 X4

H W C(15)

H W C

W C

W C

Filing Status?

MFJ MFJ SS SS

# exm?

3 3 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1

Situation 4


32

X1 X2 X3 X4

H W C(15)

H W C

W C

W C

Filing Status?

MFJ MFJ SS SS

# exm?

3 3 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1 Y-1

Situation 4


33

X1 X2 X3 X4 X5

H W C(15)

H W C

W C

W C

W C

Filing Status?

MFJ MFJ SS SS

# exm?

3 3 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1 Y-1

Situation 5


34

X1 X2 X3 X4 X5

H W C(15)

H W C

W C

W C

W C

more assmptns?

Filing Status?

MFJ MFJ SS SS

# exm?

3 3 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1 Y-1

Situation 5


35

X1 X2 X3 X4 X5

H W C(15)

H W C

W C

W C

W C

Filing Status?

MFJ MFJ SS SS HH

# exm?

3 3 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1 Y-1

Situation 5


36

X1 X2 X3 X4 X5

H W C(15)

H W C

W C

W C

W C

Filing Status?

MFJ MFJ SS SS HH

# exm?

3 3 2 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200

Rate Sch?

Y-1 Y-1 Y-1 Y-1

Situation 5


37

X1 X2 X3 X4 X5

H W C(15)

H W C

W C

W C

W C

Filing Status?

MFJ MFJ SS SS HH

# exm?

3 3 2 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200 $8,950

Rate Sch?

Y-1 Y-1 Y-1 Y-1

Situation 5


38

X1 X2 X3 X4 X5

H W C(15)

H W C

W C

W C

W C

Filing Status?

MFJ MFJ SS SS HH

# exm?

3 3 2 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200 $8,950

Rate Sch?

Y-1 Y-1 Y-1 Y-1 Z

Situation 5


39

X1 X2 X3 X4 X5 x11

H W C(15)

H W C

W C

W C

W C

W C

Filing Status?

MFJ MFJ SS SS HH

# exm?

3 3 2 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200 $8,950

Rate Sch?

Y-1 Y-1 Y-1 Y-1 Z

Situation 6


40

X1 X2 X3 X4 X5 x11

H W C(15)

H W C

W C

W C

W C

W

Filing Status?

MFJ MFJ SS SS HH

# exm?

3 3 2 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200 $8,950

Rate Sch?

Y-1 Y-1 Y-1 Y-1 Z

Situation 6


41

X1 X2 X3 X4 X5 x11

H W C(15)

H W C

W C

W C

W C

W

Filing Status?

MFJ MFJ SS SS HH S

# exm?

3 3 2 2 2

Std Ded?

$12,200

$12,200

$12,200

$12,200 $8,950

Rate Sch?

Y-1 Y-1 Y-1 Y-1 Z

Situation 6


42

X1 X2 X3 X4 X5 x11

H W C(15)

H W C

W C

W C

W C

W

Filing Status?

MFJ MFJ SS SS HH S

# exm?

3 3 2 2 2 1

Std Ded?

$12,200

$12,200

$12,200

$12,200 $8,950

Rate Sch?

Y-1 Y-1 Y-1 Y-1 Z

Situation 6


43

X1 X2 X3 X4 X5 x11

H W C(15)

H W C

W C

W C

W C

W

Filing Status?

MFJ MFJ SS SS HH S

# exm?

3 3 2 2 2 1

Std Ded?

$12,200

$12,200

$12,200

$12,200 $8,950 $6,100

Rate Sch?

Y-1 Y-1 Y-1 Y-1 Z

Situation 6


44

X1 X2 X3 X4 X5 x11

H W C(15)

H W C

W C

W C

W C

W

Filing Status?

MFJ MFJ SS SS HH S

# exm?

3 3 2 2 2 1

Std Ded?

$12,200

$12,200

$12,200

$12,200 $8,950 $6,100

Rate Sch?

Y-1 Y-1 Y-1 Y-1 Z X

Situation 6


45


• Problem 2 – 44– Cindy?

• No (SS)

– Dick?• Yes• Abandoned Spouse


46


• Problem 2 – 44• Problem 2 – 45


47

2011

W C W

Filing Status?

# exm?

Std Ded?

Rate Sch?

Problem 2 – 45 a.


48

2011

W C W

Filing Status? MFJ

# exm?

Std Ded?

Rate Sch?

Problem 2 – 45 a.


49

2011

W C W

Filing Status? MFJ

# exm? 2 or 3?

Std Ded?

Rate Sch?

Problem 2 – 45 a.


50

2011

W C W

Filing Status? MFJ

# exm? 2

Std Ded?

$12,200

Rate Sch? Y-1

Problem 2 – 45 a.


51

2011 2012

W C W

C W

Filing Status? MFJ

# exm? 2

Std Ded?

$12,200

Rate Sch? Y-1

Problem 2 – 45 a.


52

2011 2012

W C W

C W

Filing Status? MFJ HH

# exm? 2 1

Std Ded?

$12,200 $8,950

Rate Sch? Y-1 Z

Problem 2 – 45 a.


53

2011 2012

W C W

C W

Filing Status? MFJ S

# exm? 2 1

Std Ded?

$12,200 $6,100

Rate Sch? Y-1 X

Problem 2 – 45 a.


54

2011 2012 2013

W C W

C W

C W

Filing Status? MFJ S S

# exm? 2 1 1

Std Ded?

$12,200 $6,100

Rate Sch? Y-1 X

Problem 2 – 45 a.


55

2011 2012 2013 2014

W C W

C W

C W

C W

Filing Status? MFJ S S S

# exm? 2 1 1 1

Std Ded?

$12,200 $6,100 $6,100 $6,100

Rate Sch? Y-1 X X X

Problem 2 – 45 a.


56

2011 2012 2013 2014

W C W

C W

C W

C W

Filing Status? MFJ S S S

# exm? 2 1 1 1

Std Ded?

$12,200 $6,100 $6,100 $6,100

Rate Sch? Y-1 X X X

What if full-time student?


57

2011 2012 2013 2014

W C W

C W

C W

C W

Filing Status? MFJ SS SS S

# exm? 3 2 2 1

Std Ded?

$12,200

$12,200

$12,200 $6,100

Rate Sch? Y-1 Y-1 Y-1 X

What if full-time student?


58


• Problem 2 – 44• Problem 2 – 45

– Juanita?• Single

– Gertrude?• H of H• Abandoned Spouse


59

Exemptions

• Personal• Dependent• Samples


60

Determine the number of personal and dependency exemptions in each of the following situations. Assume any condition for a dependency exemption not mentioned is met.


61

* (entire year)

Personal Dependents(after ’04)

REQUIREMENTS FOR ALL

qual ID citizen jointreturn

claim noother dep

CHILDREN OTHERS

relationshipage

supportabode (>1/2)

relationship *gross income

support


62


A. Ann supports her mother, who lives in her own apartment.


63

SamplesPers + Dep = Total

a. Ann 1 + 1 = 2


64


B. Barry supports his aunt and her husband, who live in their own apartment.


65


a. Ann 1 + 1 = 2

b. Barry 1 + ? =


66


a. Ann 1 + 1 = 2

b. Barry 1 + 1 = 2


67


C. Charles provided $3,000 of support for his sister. She received $6,000 of social security benefits which she used to pay some of her own expenses.


68


a. Ann 1 + 1 = 2

b. Barry 1 + 1 = 2

c. Charles 1 + 0 = 1


69


D. Dave, who is a dependent of his parents, files a return and reports his earnings from a summer job.


70


a. Ann 1 + 1 = 2

b. Barry 1 + 1 = 2


d. Dave 0 + 0 = 0


71


E. Ed and his two brothers help support their mother. Each contributed $3,000 toward her support. She received a taxable pension of $4,000 and used the money to pay her own expenses.


72


a. Ann 1 + 1 = 2

b. Barry 1 + 1 = 2


d. Dave 1 + 0 = 1

c. Ed 1 + 0 = 1


73

Exemptions

• Personal• Dependent• Samples• Problem 2 – 40

or exceptions


74

Problem 2 - 40a. Andrew

• 1 + 0 = 1b. Bob and Ann

• 2 + 1 = 3c. Clay

• 1 + 1 = 2d. Dave

• 1 + 0 = 1


75

Exemptions

• Personal• Dependent• Samples• Problem 2 – 40• Problem 2 – 37

or exceptions


76

Problem 2 - 37Social Security $1,500Mario 2,600Caroline (unrelated) 800Doug (son) 500Elaine (sister) 1,600 Total $7,000

a. Who might be able to claim Anna?not

< 10%


77

Mario or Elaine

Social Security $1,500Mario 2,600Caroline (unrelated) 800Doug (son) 500Elaine (sister) 1,600 Total $7,000

Problem 2 - 37

a. Who might be able to claim Anna?


78


Problem 2 - 37

b. What do they have to do?


79

Sign Multiple Support

agreement


80


Problem 2 - 37

c. Can anyone claim head-of-household? Explain.

Pub 17, page 24


81


82


Problem 2 - 37

d. Can Mario claim an old age allowance for his mother? Explain.

Gross Income


83

Problem 2 - 56


84

Problem 2 - 56Income 51,000


85

Problem 2 - 56Income 51,000 + -5,000 46,000


86

Problem 2 - 56Income 51,000 + -3,000 48,000


88

Problem 2 - 56Income 51,000 + -3,000 48,000Less: Adjustments 0ADJUSTED GROSS INCOME 48,000


89

Problem 2 - 56Income 51,000 + -3,000 48,000Less: Adjustments 0AGI 48,000Exemption


90

Problem 2 - 56Income 51,000 + -3,000 48,000Less: Adjustments 0AGI 48,000Exemption 1 = 3,900Std or Item Ded


91

Problem 2 - 56Income 51,000 + -3,000 48,000Less: Adjustments 0AGI 48,000Exemption 1 = 3,900Std or Item Ded 6,100


92

Problem 2 - 56Income 51,000 + -3,000 48,000Less: Adjustments 0AGI 48,000Exemption 1 = 3,900Item or Std Ded 4,000 or 6,100


93

Problem 2 - 56Income 51,000 + -3,000 48,000Less: Adjustments 0AGI 48,000Exemption 1 = 3,900Item or Std Ded 4,000 or 6,100 10,000Taxable Income


94

Problem 2 - 56Income 51,000 + -3,000 48,000Less: Adjustments 0AGI 48,000Exemption 1 = 3,900Item or Std Ded 4,000 or 6,100 10,000Taxable Income 38,000


95

Problem 2 - 56Income 51,000 + -3,000 48,000Less: Adjustments 0AGI 48,000Exemption 1 = 3,900Item or Std Ded 4,000 or 6,100 10,000Taxable Income 38,000

Tax Calculation:TI 38,000


96

Problem 2 - 56

Taxable Income 38,000

Tax Calculation:TI 38,000Less Base 30,650Excess 7,350

x Mar Rate 25%Tax on Excess 1,838

+ Tax on Base 3,893Total Tax 5,731


97


98



x Mar Rate 25%Tax on Excess 438



99

Problem 2 - 56


100





Problem 2 - 56


101





Problem 2 - 56


102

Problem 2 - 56Taxable Income 38,000





104

Problem 2 - 56Taxable Income 38,000





105

Problem 2 – 30 (a)


106

Problem 2 - 30a. Assuming he is self-supporting


107

Problem 2 - 30

Income

a. Assuming he is self-supporting


108

Problem 2 - 30

Income 1,800 + 1,600



109

Problem 2 - 30

Income 1,800 + 1,600 3,400



110

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI



111

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption



112

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 1 = 3,900Item or Std Ded



113

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 1 = 3,900Item or Std Ded 600 or 6,100



114

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 1 = 3,900Item or Std Ded 600 or 6,100 10,000



115

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 1 = 3,900Item or Std Ded 600 or 6,100 10,000Taxable Income 0



116

Problem 2 – 30 (b)


117

Problem 2 - 30b. Assuming he is a dependent of parents


118

Problem 2 - 30

Income 1,800 + 1,600 3,400

b. Assuming he is a dependent of parents


119

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0



120

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption



121

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 0 = 0



122

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 0 = 0Item, Min, or Std



123

Minimum Standard Deduction(when dependents claimed by parents)

• See page 2/24

• $1,000 or• Earned

Income + $350

$1,000 min

$6,100 max


124

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 0 = 0Item, Min, or Std 600 1000



125

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 0 = 0Item, Min, or Std 600 1000 2,150



126

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 0 = 0Item, Min, or Std 600 1000 2,150 2,150Taxable Income



127

Problem 2 - 30

Income 1,800 + 1,600 3,400Less: Adjustments 0AGI 3,400Exemption 0 = 0Item, Min, or Std 600 1000 2,150 2,150Taxable Income 1,250


Documents

Federal Income Tax Chapter 2. © Copyright 2013 by M. Ray Gregg. All rights reserved. 2 Filing Status For each of the following situations, can Hank and