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EA PART 1 – STUDY UNIT 1

Filing Requirements
Core Concepts

1. Preliminary Work to Prepare Tax Returns

a. The use of the prior year’s tax return helps identify significant changes and prevent
gross mathematical errors. It also increases the efficiency in completing the current
return.
b. The taxpayer personal information, such as date of birth, age, marital status,
dependents, etc., is used to verify the identity of the taxpayer and related dependents.
Thus, the age of the taxpayer determines if (s)he qualifies for additional deductions
(65 and over), retirement distributions, dependency, etc.
c. A personal, living, or family expense is not deductible unless the Code specifically
provides otherwise. Nondeductible expenses include rent and insurance premiums paid
for the taxpayer’s own dwelling, personal interest, and life insurance premiums paid by
the insured.
d. Certain items from the prior-year return may be needed to complete the current-year
return. Examples are state income tax refund, AMT for credit, Form 8801, gain or loss
carryover, charitable gift carryover, Schedule D, etc.
e. A determination should be made as to which taxes apply to the taxpayer. These taxes
may include income tax withholding (estimated tax), FICA (self-employment tax) and
FUTA, AMT, estate tax, gift tax, and GST tax.
f. Special filing requirements apply to taxpayers with foreign interests. These include
reporting foreign financial accounts and specified foreign assets. An extensive voluntary
disclosure process exists to assist taxpayers who failed to timely comply with these
special requirements.
2. Filing Status
a. The amount of the standard deduction and applicable tax rates vary with filing status.
b. Married Filing Jointly: Taxpayers can choose married filing jointly as their filing status if
they are considered married and both spouses agree to file a joint return.
c. Married Filing Separately: Each spouse accounts separately for items of income,
deduction, and credit.
d. Qualifying Widow(er): Available to a taxpayer with a dependent child for 2 years following
the year of the death of the taxpayer’s spouse.
e. Head of Household: An individual qualifies for head of household if (s)he satisfies
conditions with respect to filing status [may not file as Qualifying Widow(er)], marital
status, and household maintenance.
f. Single: A taxpayer must file as an unmarried individual if (s)he neither is married nor
qualifies for qualifying widow(er) or head of household status.

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2 EA Part 1 – Study Unit 1

g. Standard Deduction: Taxable Income (TI) is adjusted gross income (AGI) minus the
itemized deductions or the standard deduction.

2021 Standard Deduction Amounts

Filing Status Basic Additional
Married Filing Jointly $25,100 $1,350
Qualifying Widow(er) 25,100 1,350
Head of Household 18,800 1,700
Single (other than above) 12,550 1,700
Married Filing Separately 12,550 1,350

h. Additional Standard Deduction: The additional standard deduction is available for

taxpayers who have attained 65 years and/or are blind.
3. Filing Requirements
a. An individual must file a federal income tax return if (1) gross income is above a
threshold, (2) net earnings from self-employment is $400 or more, or (3) (s)he is a
dependent with more gross income than the standard deduction or with unearned income
over $1,100.
b. The income tax return must be filed (postmarked) no later than the 15th day of the
4th month following the close of the tax year (April 15).
c. Books of account or records sufficient to establish the amount of gross income,
deductions, credit, or other matters required to be shown in any tax or information return
must be kept.
4. Dependents
a. An individual who files an income tax return is allowed to claim as dependents those who
satisfy the dependent status tests.
5. Dependent’s Unearned Income
a. Net unearned income of a dependent under 19 (under 24 for full-time students) at the
close of the tax year is taxed to the dependent at the parent’s marginal rate. This is
referred to as the “Kiddie Tax.”
6. Nonresident and Dual-Status Aliens
a. A taxpayer is considered a dual-status alien if the taxpayer was both a nonresident and
resident alien during the year.
b. Generally, a taxpayer is considered a resident alien if either the green card test or the
substantial presence test is met. Even if the taxpayer does not meet either of these tests,
the taxpayer may be able to choose to be treated as a U.S. resident for part of the year.

Copyright © 2022 Gleim Publications, Inc. All rights reserved. Duplication prohibited. Reward for information exposing violators. Contact copyright@gleim.com.