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Newsletter Issue # 10: [Registered Tax Return Preparers Exam Articles Series] Becoming Familiar with Form 1040 Instruction Booklet. |
A close look at the list of IRS recommended study materials for the IRS Competency Exam to become A RTRP
Becoming familiar with Form 1040 Instruction Booklet's Content
The Form 1040 instruction booklet is a wonderful study aid for the IRS competency exam for several reasons. First, it has line by line instruction on how to fill out the entire form 1040. Second, it has plenty of summaries, charts, flowcharts and tables. Lastly, it guides you through where to look for more inform ation about specific topics.
So, let's start with the table of content of the Form 1040 instruction booklet. I divided the content into four parts as you see in the picture below.
The introduction part -page 4 to 10- has useful general information to go over quickly, especially the tables and charts. From page 12 to page 27 are all about instructions on how to fill out Page 1 of Form 1040: personal information, filing status, exemptions, income and adjusted gross income.
Next, from pages 33 to 73 of the Form 1040 instruction booklet there are guidelines to complete Page 2 of Form 1040. Information is titled as: tax and credit, other taxes, payments, earned income credit (EIC), refund, amount you owe, third party designee, etc.
The last part of the booklet is about "other information", which goes from page74 to the end of the booklet. It also contains general information and some important resources such as the Tax Table and the Tax Rate Schedule.
Next article of this series: "Becoming familiar with Form 1040 Page 1"
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To get it right, you've got to get it! |
Practice, practice and more practice
Topic: Filling status
In which of the following situations may taxpayers file as married filing jointly?
a. Taxpayers who were married but lived apart during the year.
b. Taxpayers who were married but lived under a legal separation agreement at the end of the year.
c. Taxpayers who were divorced during the year.
d. Taxpayers who were legally separated but lived together for the entire year.
ANSWER:
RULE: In order to file a joint return, the parties must be MARRIED at the end of the year. Exception: If the parties are married but are LEGALLY SEPARATED under the laws of the state in which they reside, they cannot file a joint return (they will file either under the single or head of household filing status).
Choice "a" is correct. Per the above rule, taxpayers who are married but lived apart during the year are allowed to file a joint return for the year. The fact that they did not live together during the year has no bearing on the issue.
Choice "b" is incorrect. Per the above rule, taxpayers who are married but lived under a legal separation
agreement at the end of the year may not file a joint return. They will generally file either under the single
or head of household filing status.
Choice "c" is incorrect. Per the above rule, taxpayers who were divorced during the year may not file a
joint return together, as they are not married at the end of the year. [Note, however, that they may
become married again in the year and file a joint return with the new spouse.]
Choice "d" is incorrect. Per the above rule, taxpayers who were legally separated but lived together for
the entire year may not file a joint return. They will generally file either under the single or head of
household filing status.
(Source: AICPA Newly-Released Regulation Questions) |
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Learning tax concepts: definitions
Tax Term:
Charitable contributions (Donacion caritativa).
Contributions are deductible (subject to various restrictions and ceiling limitations) if made to qualified nonprofit charitable organizations. A cash basis taxpayer is entitled to a deduction solely in the year of payment. Accrual basis corporations may accrue contributions at year-end if payment is properly authorized before the end of the year and payment is made within two and one-half months after the end of the year .
 | | From 1040 Exam Prep e-Books Series |
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