Types of Individual Tax Returns

Form 4868

Could get up to 6 months extension

Interest will Accure until you pay your taxes

Income Broadly Conceived

-Exclusions

Gross income

-Deductions For AGI

AGI 

- the greater of (>) : Total Itemized deductions or standard deductions

-Total of Personal and Dependency exemptions

= Taxable income

Tax on Taxable Income

-Tax Creditis

Tax Due/Refund

• The government chose to exclude certain types of income from the income base
• Life Insurance paid upon death         

• Gifts
• Child Support
• Workers Comp
• Scholarship grants
• Welfare 
• Veteran's Benefits 
• Unemployment

• Includes but is not limited to 
• Salaries 
• Pensions
• Interest
• Dividends 
• Bonuses 
• Estate and Trust income 
• Embezzled funds
• Commissions

Deductions for AGI

1. Deductions for AGI 

• "Above the Line" Deductions 
• "Page 1" Deductions

1. Deductions from AGI

Itemized Deductions

Personal and employee expenditures allowed by the code as deductions from AGI; Ex:

• Certain Medical Expense
• State Income Tax
• Interest on Home Mortage

Standard Deductions

Specified by Congress and Depends on the filing status of the taxpayer

• Located in Table Given to you

Personal Exemptions

Qualifying Child

• Must meet these test to pass
• Relationship Test
• Adobe Test
• Age Test 
• Support Test

Includes a taxpayers child (son, daughter), adopted child, stepchild, eligible foster child, brother/sister, half brother/sister, step brother/sister or a descendant of any of these parties.

Note that ancestors of any of these parties (uncle, aunt) and in-laws are NOT included

Adobe Test

A qualifying child must live with the taxpayer for more than half of the year.

Temporary absences (school, vacation, medical care) are disregarded.

Must be under 19 or under age 24 in the case of a student. Must be full-time student

The Age test does not apply to any disabled childern

Cannot be older than the taxpayer claiming him or her as a qualifying child (Brother cannot claim his older sister as a qualifying child)

Support Test

Parents must provide more than half of the kids support

Qualifying Relative

Relationship Test

(Qualifying Relative)

More expansive than for qualifying child. Also Include:

• Lineal Ascendents (Parents, Grandparents)
• Collateral Ascendents (Uncles, Aunts
• Certain in-laws  (son-, daughter-, father-, mother-, brother-, and sister-in-law)

Also includes unrelated parties who live with the taxpayer (members of the same household) for the entire tax year.

Gross Income Test

Multiple Support Agreement

• Permits one of a group of taxpayers who furnish support for a qualifying relative to claim a dependency exemption for that individual, even if no one provides more than 50 percent of the support.
• Group together must provide 50% of the support
• Any person who contributed >10% of the support is entitled to claim the exemption if each person in the group agrees in written consent

Tax Return is required for every individual who had gross income that equals or exceeds the sum of the exemption amount plus the applicable standard deductions

• Example: a single taxpayer under the age of 65 must file a tax return in 2012 if gross income equals or exceeds $9,750 ($3,800 personal exemption + $5,950 standard deduction)