Chapter 1 - Filing Information
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1.
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If you are a U.S. citizen or resident living outside the United States, you must file a return if you meet the filing requirements 7
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2.
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Your filing status is determined on the last day of your tax year. 8
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3.
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An automatic extension filed on Form 4868 extends the time to file for calendar year taxpayers to: 12
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  May 15th
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October 15th
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November 15th
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January 1st of the next year
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4.
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You may appoint an agent to sign your return if you are too busy to sign it yourself. 16
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Chapter 2 - Filing Status
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5.
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If you obtain a court decree of annulment, which holds that no valid marriage ever existed, you are considered unmarried even if you filed joint returns for earlier years. 23
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6.
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Rent should be included as a cost for keeping up a home when determining qualification as head of household status. 26
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7.
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The following is a requirement to be able to file as head of household:
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You were married on the last day of the year
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You were unmarried on the first day of the year
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Your neighbors signed a form stating that you indeed are the head of your household.
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You paid more than half the cost of keeping up a home for the year
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8.
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If your filing status is married filing separately, you should:
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Itemize deductions if your spouse itemizes deductions because you cannot claim the standard deduction
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Claim the standard deduction
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Always file Schedule C
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Never itemize deductions.
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Chapter 3 - Personal Exemptions and Dependents
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9.
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If another taxpayer is entitled to claim you as a dependent, you cannot take an exemption for yourself.
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10.
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The amounts are the same for both a personal exemption and an exemption for a dependent.
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11.
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You can choose married filing jointly as your filing status if you are married and: 36
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both you and your spouse have income
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both you and your spouse sign Form 1180
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you don't own any joint property
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both you and your spouse agree to file a joint return
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12.
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To meet the member of household or relationship test, a person must live with you for the entire year as a member of your household, unless that person is your:
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Stepchild
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Roommate
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Neighbor
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Boss
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Chapter 4 - Tax Withholding and Estimated Tax
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13.
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When you start a new job, you specify your filing status and number of withholding allowances on Form:
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14.
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In general, the federal income tax is a pay-as-you-go tax.
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15.
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Publication 919 will help you make sure you're getting the right amount of taxes withheld from your paycheck.
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16.
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The tips you receive while working on your job are not considered part of your pay for federal income tax purposes.
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17.
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You must make estimated tax payments for the current year if you expect to owe at least $1,000 in tax for the current year after subtracting your withholding and credits AND you expect your withholding and credits to be less than the smaller of 90% of the tax to be shown on your current year tax return, or 100% of the tax shown on your prior year tax return. 46
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18.
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Your employer generally must withhold income tax on taxable fringe benefits.
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Chapter 5 - Wages, Salaries, and Other Earnings
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19.
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Fringe benefits you receive in connection with the performance of your services are included in your income as compensation unless:
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You itemize on Schedule A
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You pay fair market value for them
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You file as head of household
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Your employer provides the benefits to everyone.
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20.
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You can exclude from your income up to $5,250 of qualified employer-provided educational assistance. 52
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Chapter 6 - Tip Income
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21.
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If your total tips for any one month from any one job are less than $20, do not report them to your employer.
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22.
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For each month, tips must be reported to your employer by the 10th of the next month.
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Chapter 7 - Interest Income
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23.
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Generally, interest on obligations used to finance government operations is not taxable if the obligations are issued by a state.
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24.
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When reporting interest income, you constructively receive income when it is credited to your account or made available to you.
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Chapter 8 - Dividends and Other Corporate Distributions
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25.
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Ordinary dividends are taxed as capital gains.
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26.
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Amounts received from money market funds are reported as dividend income.
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27.
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Capital gain distributions are paid to you or credited to your account by mutual funds or real estate investment trusts (REITs).
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28.
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Capital gain distributions are reported as long-term capital gains regardless of how long you owned your shares in the mutual fund or Real Estate Investment Trust (REIT).
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Chapter 9 - Rental Income and Expenses
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29.
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The recovery period for furniture used in rental property depreciated using MACRS General Depreciation System is:
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5 years
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6 years
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7 years
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9 years
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32.
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In general, all rental activities are passive activities.
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Chapter 10 - Retirement Plans, Pensions, and Annuities
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30.
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Under MACRS, a mid-month convention is used for all residential rental property and nonresidential real property.
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31.
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A special depreciation allowance can be claimed for property placed in service after September 10, 2001.
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33.
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Generally, if you did not pay any part of the cost of your employee pension or annuity and your employer did not withhold part of the cost from your pay while you worked, the amounts you receive each year are fully taxable.
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34.
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If you withdraw cash or other assets from a qualified retirement plan in an eligible rollover distribution, you can defer tax on the distribution by rolling it over to another qualified retirement plan or traditional IRA.
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35.
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Most distributions from qualified retirement plans and nonqualified annuity contracts made to you are subject to an additional tax of 10% if you have not reached age:
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36.
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In order to avoid an additional special tax on excess accumulation, the payments that you receive from qualified retirement plans must begin no later than on your required beginning date.
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Chapter 11 - Social Security and Equivalent Railroad Retirement Benefits
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37.
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In determining the taxability of Social Security benefits, the base amount if you are married filing jointly is: 89
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$25,000
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$26, 300
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$32,000
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$100,000
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38.
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In determining the taxability of Social Security benefits, the base amount if you are single is $25,000. 89
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Chapter 12 - Other Income
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39.
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Damages received for emotional distress due to a physical injury or sickness are treated as received for the physical injury or sickness and should not be included in income.
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40.
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Amounts you receive for child support are income to you.
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Chapter 13 - Basis of Property
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41.
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The following increases your basis in real property:
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New furnishings
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Depreciation
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Monthly telephone charges
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Paving your driveway
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42.
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The basis of property changed to business use, is the lesser of the Fair Market Value (FMV) of the property on the date of the change and
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The property's original cost
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The adjusted basis on the date of the change
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The property's estimated value
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The property's residual value
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Chapter 14 - Sale of Property
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43.
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You figure gain or loss on a sale or trade of property by comparing the amount you realize with:
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The FMV of the property
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The adjusted basis of the property
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The original sales price of the property
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The indexed marginal basis of the property
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44.
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If you trade business or investment property for other business or investment property of a like kind, you do not pay tax on any gain or deduct any loss until:
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Next year
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The end of the tax year
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The cows come home
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You sell or dispose of the property you receive
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45.
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A transaction between you and a corporation in which you directly or indirectly own more than 50% in value of the outstanding stock is considered a related party transaction.
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46.
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Stocks or bonds held in your personal account are considered capital assets.
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Chapter 15 - Selling Your Home
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47.
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The maximum amount of exclusion on the gain on the sale of your main home (if you meet all tests and are single) is: 114
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$100,000
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$250,000
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$500,000
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$1,000,000
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48.
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You cannot exclude gain on the sale of your home if, during the 2-year period ending on the date of the sale, you sold another home at a gain and excluded all or part of the gain.
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Chapter 16 - Reporting Gains and Losses
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49.
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If you have a total net capital loss that is more than the yearly limit on capital loss deductions, you can:
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Not carry it over
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Offset ordinary income
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Carry over the unused part to the next year and treat it as if you had incurred it in that next year
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Carry it back three years
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50.
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The maximum capital gain rate does not apply if it is higher than your regular tax rate.
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