ACA1 Task 2 task stream
According to the Internal Revenue Service, a taxpayer has the choice between five different filing statues. The five statuses are, Single, Married Filing Separately, Married Filing Jointly, Head of Household, and Qualifying Widow(er) with dependent child.
For the couple in question, the recommendation I am making is that they use the filing status of married filing jointly. Since the couple has three children they will qualify for three dependency exemptions as well as two exemptions for themselves. Since all three of the children still live in the household and all of the children are under the age of nineteen the couple is allowed to claim them as dependents. On the other hand, the couple cannot claim spouse B’s mother since they did not supply over fifty percent of the support for her for the year they are filing. The total amount of the mother’s living expense, including the cost of rent, food, and other expenses brings the total support to seven thousand dollars and the mother supplies the couple with $7920 a year. The money that she supplies is what she receives from her Social Security benefits.
The reason that the couple should not file under the status married filing separately is because the tax rates are higher than the tax rates for those filing under the status married filing jointly. Also, there several deductions, credits, and exclusions that are allowed for the status married filing jointly that are not allowed for those that are choosing to file separately. One example, is that the couple would only be able to deduct $250,000 of the income from the sale of the personal residence if they had filed separately, where if they choose to file jointly they will be allowed to excluded the entire amount of income from the sale.
The definition of income, as stated by the Internal Revenue Service, is all income of the taxpayer whether it is taxable or non-taxable. The couple has several items that are considered as taxable income. Those items included,
For the couple in question, the recommendation I am making is that they use the filing status of married filing jointly. Since the couple has three children they will qualify for three dependency exemptions as well as two exemptions for themselves. Since all three of the children still live in the household and all of the children are under the age of nineteen the couple is allowed to claim them as dependents. On the other hand, the couple cannot claim spouse B’s mother since they did not supply over fifty percent of the support for her for the year they are filing. The total amount of the mother’s living expense, including the cost of rent, food, and other expenses brings the total support to seven thousand dollars and the mother supplies the couple with $7920 a year. The money that she supplies is what she receives from her Social Security benefits.
The reason that the couple should not file under the status married filing separately is because the tax rates are higher than the tax rates for those filing under the status married filing jointly. Also, there several deductions, credits, and exclusions that are allowed for the status married filing jointly that are not allowed for those that are choosing to file separately. One example, is that the couple would only be able to deduct $250,000 of the income from the sale of the personal residence if they had filed separately, where if they choose to file jointly they will be allowed to excluded the entire amount of income from the sale.
The definition of income, as stated by the Internal Revenue Service, is all income of the taxpayer whether it is taxable or non-taxable. The couple has several items that are considered as taxable income. Those items included,