EA Exam Review Part 1 - Chapter 1 Questions and Answers 100% Pass

EA Exam Review Part 1 - Chapter 1 Questions and Answers 100% Pass Prior Year Return - helps prevent gross mathematical errors, identify significant changes AND comparison should result in similar amounts and tax liability or refund. Biographical Info. - DOB, age, marital status and dependents Nationality - Citizen, resident alien (green card test or substantial presence) or non- resident alien Determine if Individual or Business - Personal, Living or Family expenses NOT deductible Non-deductible Expenses - Rent, Life insurance, Automobile maintenance, Personal Interest and Payments for FOOD, CLOTHING OR DOMESTIC help. Special filing requirements - Foreign Income, earned income, filing status and age determine whether a person has to file a tax return Reporting Foreign Financial Accounts - person doing business outside of U.S who has excess of $10,000 at any time during calendar year must file Form FinCEN Report 114 by June 30 of subsequent year. 2 | P a g e Katelyn Whitman© 2025, All Rights Reserved. Form 8938 - report foreign assets with value greater than $50,000 at the last day of year or $75,000 at ANY TIME during tax year. (DOUBLES FOR M.F.J) FBAR & Form 8938 - Form 8938 is filed with TAX RETURN. FBAR is filed with TREASURY. Form 8938 are NOT limited to bank & financial accounts. Filing status - Standard deduction, personal exemptions and applicable tax rates varies by filing status Married Filing Joint (MFJ) - both spouses agree to file a joint return report combined income, deduct combined allowable expenses, can file EVEN IF ONE SPOUSE had NO income or deductions. Legally married - cohabiting as husband and wife, living apart but NOT divorced, Divorced but NOT FINAL. Joint Return - NOT allowed if one spouse was nonresident alien at ANY TIME during tax year UNLESS both elect to agree to be taxed one their WORLDWIDE income MFJ Requirements - - If one spouse files separately, so must the other - joint return is allowed if spouses use different accounting methods - spouses with different tax years may NOT file joint return 3 | P a g e Katelyn Whitman© 2025, All Rights Reserved. Injured Spouse - - only one spouse owes a past-due amount, other spouse can be considered for injured spouse Requirements for Injured spouse (Form 8379) - - file a joint return, have reported income, have made tax payments or claimed EIC or other refundable credit and NOT be required to pay past-due amount Innocent Spouse Relief - taxpayer may be relieved of joint liability. innocent spouse was NOT AWARE of these - understatement of tax, omitted income, claimed false documents or credits. Married Filing Separately - each spouse accounts