Frequently Asked Questions
U.S. Federal Income Taxes

"Depends on what?" you might ask.

"Depends on the specific facts and circumstances of your particular case," would be the reply.

Questions

1. Do I have to file a U.S. tax return?

2. Who can I take as my dependent?

3. Who gets to claim children as dependents after a couple divorces?

4. What is my filing status? Can I file as married? Can I file as head-of-household? etc? etc?

5. What is a standard deduction? What is my standard deduction?

6. What is the personal and dependency exemption amount?

7. What is the standard rate per mile for business, charitable, medical and moving deductions?

8. How much tax do I owe?

9. The federal income tax is unconstitutional. There is no legal or moral obligation to pay U.S. income taxes. I'm a citizen of a state, not of the United States. The federal income tax is voluntary. etc. etc.

10. Where can I get federal tax forms, instructions and publications?

11. Where can I get the Internal Revenue Code and Regulations?

12. My W-2 or 1099 is incorrect or has not been delivered to me. What can I do?

13. I filed my tax return some time ago and have not yet received the refund I was entitled to. What can I do?

Answers

1. Do I have to file a U.S. tax return?
   Assumption: You are a U.S. citizen or resident alien. In general, you have to file if your gross income equals or exceeds the sum of your standard deduction and personal exemption.

2. Who can I take as my dependent?
   There are five tests that must be passed to claim someone as a dependent. Those are:
   1. Support Taxpayer must provide over one-half the support of anyone claimed as a dependent. There are exceptions for divorced parents (custodial parent rule) and situations in which no one person provides more than 50% of the support (multiple support agreement).
   2. Relationship The dependent must either be related to the taxpayer (ancestors, descendents, parents-in-law, children-in-law, siblings, aunts & uncles (by blood), nieces & nephews) or have lived with the taxpayer for the entire year. Note that any living arrangement cannot be in violation of state or local law if the dependency exemption is to be taken.
   3. Gross income The gross income of the dependent must be less than the exemption amount for the tax year. ($3,000 in 2002). There is no income limit for children under age 19 or children who are full-time students and under the age of 24.
   4. Citizenship A dependent must be a United States citizen or national, or a resident of Canada, the United States, or Mexico.
   5. Joint return A dependent must not file a joint return with his or her spouse. An exception exists if the only reason for filing is to obtain a full refund of taxes withheld. That is, if the tax liability is zero whether a married-joint or married-separate return is filed, then joint filing is alright.

3. Who gets to claim children as dependents after a couple divorces?
   If the two parents between them provide over half the support and have custody of the child over half the year, then the custodial parent gets the dependency exemption. The custodial parent is the one awarded custody by the court. If joint custody is awarded, then the parent with physical custody the greater part of the year gets the exemption.

     Exception: If the custodial spouse completes and signs Form 8332, then the non-custodial spouse gets the exemption:

     Notes
   

   1. The above rules only apply for minor children. The regular dependency rules apply for adult (over age 18) children.

   2. The above rules do not apply if the two parents provide less than half the child's support between them. In that situation, the regular dependency rules apply.

   3. If Notes 1 or 2 apply, or the rules in the first paragraph do not apply for any other reason, then having a signed Form 8332 does NOT give the dependency exemption to the non-custodial parent.

   4. Divorce court judges do not determine the applicability of federal income tax law. In other words, if the divorce court judge says, "Jack gets the dependency exemption for little Joey," then federal tax law still determines who gets to take Joey as a dependent. Further elaboration, if the divorce court judge says, "Julie gets custody of little Joey and Jack gets to take Joey as a dependent," then Julie has to fill out and sign Form 8332 or she gets Joey as a dependent, not Jack. (The divorce court judge could hold Julie in contempt but that still doesn't change federal tax law.)

   5. Everywhere above that it says, "Form 8332," read that to mean, "Form 8332 or a similarly worded document." This means a properly worded divorce decree signed by the custodial spouse can be an acceptable substitute for Form 8332.

4. What is my filing status? Can I file as married? Can I file as head-of-household? etc? etc?
   Before filing status can be determined, marital status must be known. In general marital status for the year is the same as that on the last day of the tax year as determined by state law in the taxpayer's state of residence. A couple in the process of obtaining a divorce that has not been finalized by the end of the year are still considered to be married for federal tax purposes.
   • Married filing jointly This filing status, which has the most favorable rate schedule, is available to couples who are married at year-end and who are both U.S. citizens or resident aliens. Exceptions: If one of a married couple dies during the year, a married-joint return may still be filed for that couple. If a non-resident alien agrees to be taxed on his/her world wide income, a joint return may be filed. (See another exception for "abandoned spouses" under the Head of Household filing status discussed below.)
   • Married filing separately A married couple may elect to file separate returns. If a married couple does file separate returns and one chooses to itemize deductions, the other must itemize also or take a standard deduction of $0.
   • Surviving spouse (More accurately know as "Qualifying widow or widower with a dependent child") A widow or widower may use the more favorable married-joint tax schedule in the two years after the spouse's death if the following conditions are met:
     • Remain unmarried throughout the year claiming this status
     • Have been qualified to file a joint return in the year the spouse died
     • Have at least one dependent child living at home for the entire year
     • Have paid over half the expenses of the home
     • Be a U.S. citizen or resident.
   • Head of Household The second most favorable rate schedule is available for this filing status. The following conditions must be met:
     • Be unmarried on the last day of the tax year (but see abandoned spouse rules below)
     • Pay over half the costs of maintaining a household in which a dependent relative (as defined in the relationship test for claiming a dependendent) lives with the taxpayer for more than half the year. The dependency exemption cannot be based on a multiple support agreement.
       Exceptions
       • If the qualifying person living with the taxpayer is the taxpayer's descendent, the person need not be the taxpayer's dependent
       • If the qualifying dependent is the taxpayer's parent, the dependent need not live with the taxpayer.
     • Not be a surviving spouse
     • Be a U.S. citizen or resident

     Exception - Abandoned Spouse
     If the taxpayer meets the following requirements, he or she is treated as an unmarried abandoned spouse and may file as head of household.

     • Live apart from his/her spouse for the last 6 months of the year
     • Pay over half the costs of maintaining a household in which a dependent child lives with the taxpayer for more than half the year.
     • Be a U.S. citizen or resident.
       

     Note that an "abandoned spouse" automatically meets the other head of household requirements. The dependency requirement for an abandoned spouse is more stringent than for others using head of household filing status. If the custodial spouse gives up the dependency exemption by signing a Form 8332 (or similarly worded document), he or she is still eligible for head of household filing status.

     In 2000, the IRS Chief Counsel issued Letter Ruling 200030023. In the Chief Counsel's opinion, if one of a married couple files as head of household under these rules, then that spouse may itemize or take the standard deduction as he or she chooses. The other spouse must file using married-separate status and must itemize if the abandoned spouse itemizes.

5. What is a standard deduction? What is my standard deduction?
   The standard deduction is an amount that individual taxpayers may deduct in computing taxable income in addition to personal and dependency exemptions. The specific amount depends upon the filing status of the taxpayer.

   Filing Status	1999 Amount	2000 Amount	2001 Amount	2002 Amount	2003 Amount	2004 Amount
   Married individual filing joint return and surviving spouse.	$7,200	$7,350	$7,600	$7,850	$9,500	$9,700
   Heads of Household	$6,350	$6,450	$6,650	$6,900	$7,000	$7,150
   Unmarried individuals (other than surviving spouses and heads of household	$4,300	$4,400	$4,550	$4,700	$4,750	$4,850
   Married individuals filing separate returns	$3,600	$3,675	$3,800	$3,925	$4,750	$4,850

   There are additional amounts for the aged and blind.

   Additional Standard Deduction for Aged & Blind	1999 Amount	2000 Amount	2001 Amount	2002 Amount	2003 Amount	2004 Amount
   Individual who is married or a surviving spouse	$850	$850	$900	$900	$950	$950
   Individual who is neither married nor a surviving spouse	$1,050	$1,100	$1,100	$1,150	$1,150	$1,200

   The standard deduction for an individual claimed as a dependent on another taxpayer's return is limited. In 1999 and 2000, a dependent gets a standard deduction of the greater of $700 or earned income + $250, but no more than the regular standard deduction for the dependent's filing status. In 2001, 2002 and 2003, a dependent gets a minimum standard deduction of $750 or earned income + $250.

   Taxpayers who have itemized deductions in excess of their standard deduction usually elect to take the itemized total instead of the standard amount. If a married couple decides to file separate returns and one of them elects to itemize, the other must also itemize or take a standard deduction of $0.

6. What is the personal and dependency exemption amount?
   The personal and dependency exemption amount is $2,800 for tax year 2002, $2,900 for 2001, $3,000 for 2002 and $3,05 for 2003. However, a person claimed as a dependent on another's tax return has a personal exemption of zero.

7. What is the standard rate per mile for business, charitable, medical and moving deductions?
   

   Type/Year	2000	2001	2002	2003	2004
   Business	32.5¢	34.5¢	36.5¢	36.0¢	37.5¢
   Charitable	14¢	14¢	14¢	14¢	14¢
   Medical & Moving	10¢	12¢	13¢	12¢	14¢

8. How much tax do I owe?
   This is much too general a question. The correct answer depends on many specific facts and circumstances. This is so much an "it depends" question, that even if you post many details to the newsgroup, you will likely still not get a reliable answer.

9. The federal income tax is unconstitutional. There is no legal or moral obligation to pay U.S. income taxes. I'm a citizen of a state, not of the United States. The federal income tax is voluntary. etc. etc.
   These and similar "tax protester" arguments will receive short shrift by your instructor and rightly so. The fact is these positions have been destroyed time and time again by the courts. Go to http://web.longwood.edu/staff/wpbrown/wpbtax.htm#protest for links to sites which provide that information.

10. Where can I get federal tax tax forms, instructions and publications?
    The Internal Revenue Service web site at http://www.irs.gov/ has forms, instructions, and publications available for download. Current year forms are at http://www.irs.gov/forms_pubs/forms.html.

11. Where can I get the Internal Revenue Code and Regulations online?
    The Internal Revenue Code can be browsed at the Government Printing Office's U.S. Code web page.

    The Regulations are available at http://www.access.gpo.gov/cgi-bin/cfrassemble.cgi?title=200026 (Revised at April 1, 2003)
    For regs issued in 2003: http://www.unclefed.com/ForTaxProfs/irs-regs/2003/index.html

12. My W-2 or 1099 is incorrect or has not been delivered to me. What can I do?
    You are required to report your income correctly and fully even if the W-2 or 1099 is incorrect or missing.

    The first step is to contact the issuer of the form. Ask them to send the form, if you haven't received it. If you have received the form and believe it is in error, explain the discrepancy and ask that a corrected form be issued.

    If you cannot contact the issuer or if the results of your communication are unsatisfactory to you, include the information you believe to be correct on your 1040. Put the correct salary information on line 7 of Form 1040(and correct federal tax withheld in the appropriate block as well). Put the correct 1099 information in the appropriate place on your return (Schedule B or C, as examples). For missing W-2s, prepare and attach Form 4852, Substitute for Missing Form W-2. For erroneous W-2s or 1099s, attach a statement explaining the discrepancy between what you are reporting and what the issuer reported.

13. I filed my tax return some time ago and have not yet received the refund I was entitled to. What can I do?
    Call the IRS at (800) 829-8815 or visit your local Taxpayer Assistance Center (TAC) in-person to inquire about the status of your refund. Locations and addresses of TACs can be found at: http://www.irs.gov/localcontacts/

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