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

The Inouyes filed jointly in 2017. Their AGI is $78,000. They reported $16,000 of itemized deductions and they have two children, one of whom qualifies as their dependent. The 2017standard deduction amount for MFJ taxpayers is $12,700 and each exemption is $4,050. What is the total amount of from AGI deductions they are allowed to claim on their 2017 tax return?

Miguel, a widower whose wife died in year 1, maintains a household for himself and his daughter who qualifies as his dependent. Miguel did not remarry. What is the mostfavorable filing status that Miguel qualifies for in year 3?

Which of the following shows the correct relationship among standard deduction amounts for the respective filing statuses?

If an unmarried taxpayer is able to claim a dependency exemption for another individual, the taxpayer is automatically eligible for the head of household filing status.

The standard deduction amount varies by filing status.

John Maylor is a self-employed plumber of John's John Service, his sole proprietorship. In the current year, John's John Service had revenue of $120,000 and $40,000 of business expenses.John also received $2,000 of interest income from corporate bonds.What is John's adjusted gross income assuming he had no other income or expenses? (ignore any deduction for self-employment tax)

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

In June of year 1, Jake's wife Darla died. The couple did not have any children and Jake did not remarry in year 1 or year 2. Which is the most favorable filing status for Jake in year 2?

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.

Qualified dividends are taxed at the same rate as ordinary income.

In year 1, the Bennetts' 25-year-old daughter, Jane, is a full-time student at anout-of-state university but she plans to return home after the school year ends. Inprevious years, Jane has never worked and her parents have always been able to claim her as a dependent. In year 1, a kind neighbor offers to pay for all of Jane's educational and living expenses. Which of the following statements is most accurate regarding whether Jane's parents would be allowed to claim an exemption for Jane in year 1assuming the neighbor pays for all of Jane's support?

Hannah, who is single, received a qualified dividend of $1,000. Hannah's marginal ordinary income tax rate is 28%. What amount of tax must she pay on the $1,000 dividend?

Michael, Diane, Karen, and Kenny provide support for their mother Janet who is 75 years old. Janet lives by herself in an apartment in Los Angeles. Janet's gross income for the year is $3,000. Janet provides 10% of her own support, Michael provides 40% ofJanet's support, Diane provides 8% of Janet's support, Karen provides 10% of Janet's support, and Kenny provides the remaining 32% of Janet's support. Under a multiple support agreement, who may claim a dependency exemption for Janet as a qualifying relative?

Which of the following relationships does NOT pass the relationship test for a qualifying child?

Which of the following is not an itemized deduction?

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?

Which of the following statements regarding personal and dependency exemptions isfalse?

Catherine de Bourgh has one child, Anne, who is 18 years old at the end of the year.Anne lived at home for seven months during the year before leaving home to attend State University for the rest of the year. During the year, Anne earned $6,000 while working part time. Catherine provided 80 percent of Anne's support and Anne provided the rest. Which of the following statements regarding whether Anne is Catherine's qualifyingchild for the current year is correct?

All of the following are tests for determining qualifying relative status except ________.

In certain circumstances, a taxpayer who provides less than half the support of another may still be able to claim a dependency exemption for that person as a qualifyingrelative.