1. Are you haunted by taxes?

2. BUH! Topics covered in todays review:
What do you want to know or struggle with?
The mysteries of the Tax Return Transcript
Who must file and what filing status should be used
Are 1099’s possessed? Are they different, and how should they be read?

3. What’s new with tax return transcripts
Most of the Social Security information has been masked. This includes the tax payer, spouse, and any dependents listed.
Only the first 4 letters of the last name of the tax payer is displayed.
Only the house number and direction is included

4. Important Line Items for Verification via the avg

5. Filing Status Mysteries

6. “My 2016 taxes were filed jointly because Joe and I renovated a property together. It was legal and practical for us to file this way. Joe and I are not married nor is he the father of my children”

7. Who Must File a Tax Return
Exemption to the rule
1099-Misc box 7 and cash income over $400 after expenses

8. Head of Household Must be considered Unmarried
You must have paid more than half the cost of keeping up a home for a qualifying person for the year
If your spouse is a nonresident alien, and you are not considering them a resident alien for tax purposes

9. Considered Unmarried
You or your partner cannot file Married Filing Jointly
You and your legally wedded spouse did not live together for all of the last 6 months of the year (other than temporary absences)
You must be eligible to claim the exemption for the qualifying person and it was their main home

10. Temporary Absences

11. Publication 501 Table 4 Chart on Who is a Qualifying Person
Qualifying Persons
Publication 501 Table 4 Chart on Who is a Qualifying Person

12. 1099-misc and/or cash

13. Cash income
Net income over $400 would need to be reported (total earned – expenses)
This would include things like:
Mowing lawns over the summer
Working under the table
Refereeing
Receiving money for plasma or other donations
Working independently for a business and you are paid less than $600 (the issuing requirement for a 1099-Misc box 7)

14. Cash income Exemptions Babysitting (pub 17)
-Must follow the IRS rules for childcare providers. Most students will not meet them.
Working directly for your parents (very rare)
-in certain cases, if a child under the age of 18 is working for their parents and earned under $6,300 of income, they do not need to file taxes or in some cases, not even issued a W-2

15. 1099-misc Exceptions Not all businesses or entities get it right
Cash that is not income can be reported wrongly to box 7. In those cases, they should be reported on the tax return under the Other Income line.
Race prize money
Unique commission packages
Certain tribal funds
Etc (consult pub 17)

16. 1099-misc
Rule of Thumb
If there is income listed in Box 7, it should be reported on the schedule C

17. Questions, Thoughts, Discussion?
Cat Miller
Senior Financial Aid Counselor