Question

In: Finance

1. Indicate whether the following individuals are "Required" (based on income) or "Not required" to file...

1. Indicate whether the following individuals are "Required" (based on income) or "Not required" to file a tax return for 2020. Click here to access the standard deduction tables to use.

		Required / Not Required
a.	Patricia, age 19, is a self-employed single individual with gross income of $5,200 from an unincorporated business. Business expenses amounted to $4,900.	Not required
b.	Mike is single and is 67 years old. His gross income from wages was $12,750.	Not required
c.	Ronald is a dependent child under age 19 who received $6,800 in wages from a part-time job.	Required
d.	Sam is married and files a joint return with his spouse, Lana. Both Sam and Lana are 67 years old. Their combined gross income was $24,250.	Not required
e.	Quinn, age 20, is a full-time college student who is claimed as a dependent by his parents. For 2020, Quinn has taxable interest and dividends of $2,500.	Not required

2. Even though an individual has gross income below the filing level amounts and therefore does not owe any tax, he or she must file a return to obtain which of the following? Select "Yes or No" whichever is applicable.

Benefits from refundable tax credits	Yes
Benefits from nonrefundable credits	No
A tax refund of amounts withheld	Yes

could you check the answer and explaining why?

Expert Solution

Hello. As per our Honor Code, we will provide the answer to only the first question and the first four parts of it.

We assume the country where the returns are filed to be USA.

PART (a) We will be providing with a detailed explanation to each point in every part.

MINIMUM AGE REQUIREMENT: There is no minimum age requirement for self employed to file a return.

MINIMUM INCOME REQUIREMENT: $400 for self employed.

STANDARD DEDUCTION AVAILABLE: Patricia can avail the standard deduction available to the self employed.

SINGLE: Since Patricia is a single, she can claim upto $12,200 as a standard deduction which is more than her gross income of $5,200.

Patricia is not required to file a return.

PART (b) MINIMUM INCOME REQUIREMENT: Minimum income required to file a return for a single person of age more than 65 years is $13,600.

Since Mike has a gross income of $12,750, Mike is not required to file a return.

PART(c) MINIMUM AGE REQUIREMENT FOR A DEPENDENT: The dependent must be under the age of 19 years.

MINIMUM INCOME REQUIREMENT: $12,000 for earned income and $1050 for unearned income.

EARNED INCOME: It is the income that a person earns by working for a job or self employment.

UNEARNED INCOME: It is a passive income from interests, investments etc.

Since Ronald has earned $6,800 from a part-time job, Ronald is not required to file a return.

PART (d) MINIMUM INCOME REQUIREMENT: Both Sam and Lara are above 65 years old and filing jointly. Minimum income required in this case to file a return is $26,600.

Since their income $24,250 is under the exemption bracket, Sam is not required to file a return.

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