US Taxpayer Information and Residency Quiz

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which of the following expenses is included in the cost of home upkeep?

Transportation costs

Clothing purchases

Educational expenses

Utility charges (correct)

To meet the requirement of paying more than half the cost of keeping up the home, the taxpayer's total payment must exceed which amount?

Food consumed on the premises

Mortgage interest expense

Total household expenses

Amount others paid (correct)

Which of the following is NOT included as an upkeep expense?

Life insurance premiums (correct)

Real estate taxes

Rent payments

Repairs and maintenance

What type of home expenses can be included in the total cost of upkeep?

Food consumed on the premises Signup and view all the answers

Which of the following statements is true regarding home upkeep expenses?

Mortgage interest is considered an upkeep expense. Signup and view all the answers

Which option does NOT describe an included cost of upkeep for a home?

Vacation expenses Signup and view all the answers

If the total amount the taxpayer paid is less than the amount others paid, what can be concluded?

The taxpayer does not meet the home upkeep requirement. Signup and view all the answers

What type of charge is considered part of home upkeep?

Utility charges Signup and view all the answers

What must both spouses do when filing a joint return?

Include all of their income, exemptions, and deductions Signup and view all the answers

What happens when one spouse dies during the year regarding their tax filing status?

The surviving spouse can file as married filing jointly Signup and view all the answers

Why may it be beneficial for married taxpayers to compare their tax filings on joint vs. separate returns?

To find the method that results in the lower combined tax Signup and view all the answers

What is one consequence of filing a joint return?

Both spouses are jointly and individually responsible for the tax Signup and view all the answers

Which status cannot be chosen by a taxpayer who has been divorced by the last day of the year?

Married filing jointly Signup and view all the answers

What information must a taxpayer provide to the EA for accurate tax return preparation?

Date of birth, marital status, and Social Security number Signup and view all the answers

What do both spouses need to do regarding their accounting periods when filing jointly?

Use the same accounting period Signup and view all the answers

What is a primary responsibility of both spouses when filing jointly?

Both must ensure all income is reported accurately Signup and view all the answers

What is the purpose of providing the EA with the taxpayer's bank account information?

To allow the IRS to make a direct deposit of the refund Signup and view all the answers

What must the EA verify each year regarding the taxpayer's banking information?

Any changes to the banking information Signup and view all the answers

What may happen if one spouse earns all the income on a joint return?

Both spouses may be held liable for the entire tax due Signup and view all the answers

Under which situation will a request for separation of liability not be granted?

The IRS proves assets were transferred to avoid tax. Signup and view all the answers

What is the penalty for failing to include a Social Security number on a return?

$60 for each failure, up to $30,000 Signup and view all the answers

What must be true for a joint return to be considered invalid due to duress?

The taxpayer signed the joint return under coercion. Signup and view all the answers

If a taxpayer does not have a Social Security number, which alternative identification can they use?

Individual Taxpayer Identification Number (ITIN) Signup and view all the answers

What effect does a spouse transferring property to avoid tax have on the taxpayer’s liability?

It increases the tax liability by the value of the transfer. Signup and view all the answers

Which of the following is NOT required to be provided by a taxpayer to the EA?

Occupation Signup and view all the answers

Which condition nullifies the presumption that a property transfer was made to avoid tax?

The transfer was made following a divorce decree. Signup and view all the answers

What condition can waive the penalty for not including required Social Security numbers?

The taxpayer proves reasonable cause for the failure Signup and view all the answers

Which of the following is an example of actual knowledge that would affect separation of liability?

Knowing about undeclared income of the spouse. Signup and view all the answers

What is the time frame that establishes presumption of property transfer for tax avoidance?

One year before IRS sends the first letter of proposed deficiency. Signup and view all the answers

What additional biographical information must be provided for dependents?

Social Security numbers and date of birth Signup and view all the answers

Which statement accurately describes the IRS's action regarding joint returns?

IRS denies requests with proof of fraudulent asset transfers. Signup and view all the answers

If a taxpayer signed a joint return but did so under duress, what is the result?

The taxpayer can file a separate return. Signup and view all the answers

What does the Declaration of Taxpayer include?

Consent to Disclosure Signup and view all the answers

What must taxpayers do if there are changes to electronic return data exceeding specified amounts?

Sign a new Declaration of Taxpayer Signup and view all the answers

Which method allows taxpayers to sign their electronic return using a Personal Identification Number (PIN)?

Self‐Select PIN Signup and view all the answers

What is required from taxpayers when using the Self‐Select PIN method?

Prior year’s Adjusted Gross Income or PIN Signup and view all the answers

Who can receive disclosures authorized by the taxpayers under the Consent to Disclosure?

The taxpayer's Providers Signup and view all the answers

If a taxpayer’s return is rejected, which of the following can EROs receive from the IRS?

Acknowledgement of receipt or reason for rejection Signup and view all the answers

What is the primary purpose of issuing a green card by U.S.CIS?

To establish an individual's resident status. Signup and view all the answers

Which of the following is NOT a specified amount that would require a new Declaration of Taxpayer?

$30 to Federal income tax withheld Signup and view all the answers

What support is available for taxpayers who do not have their prior year AGI or PIN?

IRS Tax Help via phone Signup and view all the answers

How many days must an individual be physically present in the U.S. to meet the substantial presence test for the current year?

31 days Signup and view all the answers

Which formula is used to calculate days present for the previous years when applying the substantial presence test?

All days present in the current year, one-third of the preceding year, and one-sixth of two years prior. Signup and view all the answers

If Sam was present in the U.S. for 120 days in 2021, 2022, and 2023, what is his total count toward the substantial presence test for 2022?

180 days Signup and view all the answers

What outcome does not impact an individual's resident status under the substantial presence test?

Unintentional overstay of a visa. Signup and view all the answers

What is the minimum amount of total days needed in the current and preceding years to qualify as a resident under the substantial presence test?

183 days Signup and view all the answers

Which option explains a condition under which an individual may lose their green card status?

Living outside of the U.S. for more than a year. Signup and view all the answers

What portion of the days present in the year preceding the current year is counted toward the substantial presence test?

One-third of the total days present. Signup and view all the answers

Study Notes

Taxpayer's Biographical Information

Taxpayers must provide date of birth, age, marital status, and Social Security number (SSN) to complete tax returns accurately.
Spouse and dependent information is also needed.
Bank account information is required for direct deposit refunds. The preparer must verify this information annually.
Dependents' SSNs must be included.
An Individual Taxpayer Identification Number (ITIN) may be used instead of an SSN if the taxpayer is ineligible for an SSN.
Failure to provide required SSNs can result in a $60 penalty per failure, up to $30,000 maximum. This penalty can be waived if reasonable cause is shown.

Substantial Presence Test for US Residency

An individual is considered a US resident if they meet the substantial presence test.
To meet this test, the individual must be physically present in the US for at least 31 days in the calendar year, and 183 days over the current and two preceding years.
Calculations include full days in the current year, one-third of days in the previous year, and one-sixth of days in the year before that.

Filing Status Considerations

Married couples with income may choose to file jointly or separately, selecting the option that yields the lower combined tax.
Tax preparation software often automatically compares these options.
Divorce finalizing by year-end categorizes the divorced person as unmarried for the entire year, precluding joint filing.
If a spouse dies during the year, the surviving spouse is considered married for the whole year and can choose to file jointly.

Joint Returns

Both spouses on a joint return must include all income, exemptions, and deductions.
Both spouses must use the same accounting period, although different accounting methods are permitted.
Both spouses are jointly and severally liable for tax, interest, and penalties.
A spouse can be held fully liable for a joint return’s tax even if only one spouse earned all the income.
Requests for liability separation are not granted in cases of fraudulent asset transfers, of knowledge of deficiencies allocable to the spouse, or if a spouse transferred property to avoid tax.
A joint return is not considered a joint return, and the signing taxpayer may not be liable for amounts on the return if signed under duress. A separate return may be required.
Tax liability for the taxpayer increases by the value of transferred property if the transfer was to avoid taxes. A transfer is presumed to have this aim if made a year before the IRS’s first proposed deficiency letter.

Electronic Signatures

Taxpayers can electronically sign individual income tax returns.
Both methods use a Personal Identification Number (PIN) to sign the return and the Declaration of Taxpayer.
One method (Self-Select PIN) requires prior year AGI or PIN for authentication. Taxpayers without this information should contact IRS Tax Help at 800-829-1040.

Cost of Upkeep Expenses

To qualify for Head of Household filing, expenses such as rent, mortgage interest, real estate taxes, insurance, repairs, utilities, and food eaten in the home are considered and combined to figure out the cost of upkeep.
Expenses like clothes, education, medical treatment, vacations, etc. are not included. Nor is a home's rental value or the value of a taxpayer or household member's services

Tax Return Updates

If electronic return data changes significantly after the taxpayer signs the Declaration of Taxpayer ($50 change in "Total income" or "AGI" or $14 change in "Total tax," "Federal income tax withheld," "Refund," or "Amount you owe") a new declaration is needed.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz covers essential taxpayer biographical information necessary for accurate tax returns, including SSNs, marital status, and dependent details. It also explores the substantial presence test for determining US residency. Test your knowledge on these important tax concepts!