Enrolled Agent ExamPart 1

Enrolled Agent ExamPart 11. Dual status alien:  An alien who is both a nonresident andresidentalienduringthe same tax year. The most common dual-status tax yearsaretheyearsofarrivaland departure. 2. Resident Alien:  If either the green card test or the substantial presencetest is met. Even if the taxpayer does not meet either of thesetests, (s)hemaybeable tochoose to be treated as a U.S. resident for part of the year. 3. Green Card Test:  A taxpayer is a resident for tax purposesif (s)hewasalawfulpermanent resident (immigrant) of the United States at anytimeduringtheyear 4. Substantial presence Test:  A taxpayer is consideredaU.S. residentifshe/he was physically present in the US for at least (1) 31 days during2018and183 daysduring 2018, 2017, and 2016, counting all days of physical presencein2018 but only 1/3 of days in 2017, and 1/6 of days in 2016 5. Provisional Income threshholds for exclusion of SSBenefitsfromIncome-:  MFJ -- 32,000 to 44,000 All Others-- 25,000 to 34,000 AGRADESTUVIA STORE 2025 ALL THEBESTAGRADESTUVIA STORE DONOTCOPY2 / 11 2 MFSLT -- 0 6. What is excluded from gross income in the case of insuranceproceeds?:-Disability pay (excluded) Accident insurance proceeds. sub for lost income (excluded) Damages for emotional distress (included if no physical injury) Punitive damages (included) Gross income does not include benefits specified that might bereceivedintheform of disability pay, health or accident insurance proceeds (evenif benefitsarea substitute for lost income), workers' compensation awards, or other damagesforpersonal physical injury or physical sickness. Also excluded aredamagesreceivedfor emotional distress if an injury has its origin in a physical injury or physical sickness(regardless of whether the damages are received by a lawsuit or anagreement).Punitive damages received are included in gross income evenif inconnectionwitha physical injury or sickness 7. Is unemployment compensation included in gross income?: Yes8. Is disability pay included in gross income?: No 9. Are punitive damages included in gross income?: Yes (unlessyoureceivedaphysical injury in connection with the punitive damages) 10. Are benefits from a health and accident plan includedingrossincomeif AGRADESTUVIA STORE 2025 ALL THEBESTAGRADESTUVIA STORE DONOTCOPY3 / 11 3 paid by employer?: No (if you received a physical injury in connectionwiththebenefits) 11. is compensation for lost wages included in gross income?: No, aslongasthe income was given because of physical injury or illness AGRADESTUVIA STORE 2025 ALL THEBESTAGRADESTUVIA STORE DONOTCOPY4 / 11 4 12. is compensation due to punitive damages includedingrossincome?:No,as long as the income was given because of physical injury or illness13. In December 2018, Jim and Tina, a married couple with$50,000ingrossincome, cashed qualified Series EE U.S. Savings Bonds, whichtheyhadpurchased in January 2015.The proceeds were used to helppayfortheirson's2018 college tuition. They received gross proceeds of $3,500, representingprincipal of $3,000 and interest of $500. The qualified higher educationalexpenses they paid during 2018 totaled $2,100.Their modifiedadjustedgrossincome for 2018 was $80,000. How much of the $500 interest canJimandTina exclude from income for 2018?: $300. Interest is excludedaslongasthegross amount received (principal and interest) do not exceedqualifiededucationalexpenses. If they do exceed that amount, the amount excludedislimitedtothepercentage. 2100/3500 = .6 *500 = 300.The exclusion is reducedwhenAGIexceedsa threshold of $79,550 (single) or $119,300 (MFJ). completely phasedout at$94,550and $149,300 14. What factors determine tax home?: 1. The taxpayer performshisorherbusiness in the area surrounding his/her main home and uses that for lodgingwhilein the area. 2. The taxpayer has living expenses at his or her main home that areduplicated AGRADESTUVIA STORE 2025 ALL THEBESTAGRADESTUVIA STORE DONOTCOPY5 / 11 5 because business requires him/her to be away fromthe mainhome. 3. The taxpayer has not abandoned the area in which both his/her traditionalplaceof lodging and man hom