Question

Question #1 Milo is required to file a federal tax return?

a) True or b) Fales

Read scenario:

• Aurora and Oscar separated in 2017 and divorced in October 2019. She earned $40,000 in wages and paid more than half the cost of keeping up her home in 2019.
• Aurora and Oscar have a son, Milo, who is 17 years old and unmarried.
• Aurora signed Form 8332 (Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent) allowing Oscar to claim Milo in 2019.
• Milo is a full-time student working towards a degree in computer information systems. Milo lived on campus during the school year and spent the summer at home with his mother.
• Milo does not a have a felony drug conviction and is not a qualifying child for anyone except Aurora.
• Aurora paid $5,000 of Milo's tuition that was not covered by his scholarship.
• Aurora provided more than half of her son's support and all the cost of his room and board on campus.
• Milo's only income was $3,800 in wages and $400 of dividend income. He had no federal or state tax withholding.
• Aurora and Milo are U.S. citizens and have valid Social Security numbers

Question #2 What is the most advantageous filing status allowable for Aurora?

a. Single

b. Married Filing Separately

c. Married Filing Jointly

d. Head of Household

Question #3 Milo is a qualifying person for Oscar to claim head of household filing status, credit for other dependents, and the earned income credit

a) True or b)False

Answer 1

Hi

Let me know in case you face any issue:

Answers are highlighted in yellow: olution: Explanation: Answer: Earned income limit for a dependent is earned income plus $350, upto $12,200. On the other side, unearned income limit is $2200. In this case, because Milo's gross income was more than the gross 1) TRUE income limit required to file a federal tax return. It is standardized, no further explanation require. d. Head of Household 2) Although Aurora has allowed Oscar to claim Milo in 2019, but as per rules, Aurora can still file as head-of- household. Because, attendance at school is considered a temporary absence and those months are counted as time 3) FALSE that Milo lived with her for the earned income credit. Aurora can claim as Head-of-household not Oscar.