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Exam 4: Individual Income Tax Overview,dependents,and Filing Status

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Question 51

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Anna is a qualifying child of her parents.However,she was recently married.Anna and her husband filed a joint return.If they had filed separately,Anna would have owed no taxes,though her husband would have owed just $5.Because Anna herself owed no taxes,her parents can still claim her as a dependent.

A) True
B) False

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Question 52

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Which of the following is not an itemized deduction?

A) Alimony paid.
B) Medical expenses.
C) Real estate taxes.
D) Charitable contributions.

E) A) and C)
F) B) and D)

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Question 53

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Lydia and John Wickham filed jointly in Year 1.They divorced in Year 2.Late in Year 2,the IRS discovered that the Wickhams underpaid their Year 1 taxes by $2,000.Both Lydia and John worked in Year 1 and received equal income but John had $2,000 less tax withheld than Lydia did.Who is legally liable for the tax underpayment?

The Inouyes filed jointly in 2019.Their AGI is $78,000.They reported $2,000 of qualified business income and $22,000 of itemized deductions.They have two children,one of whom qualifies as their dependent as a qualifying child.The 2019 standard deduction amount for MFJ taxpayers is $24,400.What is the total amount of from AGI deductions they are allowed to claim on their 2019 tax return?

The Dashwoods have calculated their taxable income to be $88,000 for 2019,which includes $2,000 of long-term capital gains.Using the appropriate tax rate schedule,calculate the Dashwoods' income tax liability assuming they are married and file a joint return.

Which of the following statements is true?

Lebron received $50,000 of compensation from his employer and he received $400 of interest from a municipal bond.What is the amount of Lebron's gross income from these items?

Which of the following statements regarding tax deductions is false?

For AGI deductions are commonly referred to as deductions "below the line."

When determining whether a child meets the qualifying child support test for the parents,scholarships earned by the child do not count as self-support provided by the child.

For purposes of determining filing status,which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

Sheri and Jake Woodhouse have one daughter,Emma,who is 16 years old.They also have taken in Emma's friend,Harriet,who has lived with them since February of the current year and is also 16 years of age.The Woodhouses have not legally adopted Harriet but Emma often refers to Harriet as her "sister." The Woodhouses provide all of the support for both girls,and both girls live at the Woodhouse residence.Which of the following statements is true regarding whom Sheri and Jake may claim as dependents for the current year?

Tom Suzuki's tax liability for the year is $2,450.He had $2,050 of federal income taxes withheld from his paycheck during the year by his employer and has $2,000 in tax credits.What are Tom's taxes due or tax refund for the year?

If a taxpayer does not provide more than half the support of a child,that child cannot qualify as the taxpayer's qualifying child.

Taxpayers are allowed to deduct a specific amount for each of their dependents.

The relationship test for qualifying relative requires the potential qualifying relative to have a family relationship with the taxpayer.

When determining whether a child meets the qualifying child support test for the child's grandparents,scholarships earned by the child do not count as self-support provided by the child.

Kabuo and Melinda got married on December 15,Year 1.Kabuo's salary for the year was $54,000,and Melinda's was $62,000.In addition,Kabuo received $250 of interest income,($100 of which was from municipal bonds),and Melinda received $10,000 of alimony from a former spouse (pre-2019 divorce decree).If Kabuo and Melinda choose to file jointly,what is their Year 1 gross income?

Taxpayers are generally allowed to claim deductions for expenditures unless a specific tax provision indicates the expenditure is not deductible.

Jan is unmarried and has no children,but she provides all of the financial support for her mother,who lives in an apartment across town.Jan's mother qualifies as Jan's dependent.Which is the most advantageous filing status available to Jan?