Exam 1: The Individual Income Tax Return

Determine from the tax table or the tax rate schedule, whichever is appropriate, the amount of the income tax for each of the following taxpayers for 2019. Taxpayer(s) Filing Status Taxable Income Income Tax Macintosh Single \ 35,680 Hindmarsh MFS \ 62,100 Kinney MFJ \ 142,000 Rosenthal H of H \ 91,350 Wilk Single \ 21,130

In 2019, Len has a salary of $40,700 from his job. He also has interest income of $400. Len is single and has no dependents. During the year, Len sold stock held as an investment for a $10,000 loss. Calculate the following amounts for Len: ​ a.Adjusted gross income b.Standard deduction c.Taxable income d.Tax liability e.Explain the tax treatment of the loss from the stock sale ​

During 2019, Murray, who is 60 years old and unmarried, provided all of the support of his elderly mother. His mother was a resident of a home for the aged for the entire year and had no income. What is Murray's filing status for 2019, and how many dependents should he report on his tax return?

List two general objectives of the tax code.

Most states are community property states.

Monica is a maid in a San Francisco hotel. Monica received $500 in unreported tips during 2019 and owes Social Security and Medicare taxes on these tips. Her total income for the year, including tips, is $4,500. Is Monica required to file an income tax return for 2019? ​ Why?

Partnerships:

If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether he or she files a tax return.

Rod, age 50, and Ann, age 49, are married taxpayers who file a joint return for 2019. They have gross income of $150,700. Their deductions for adjusted gross income are $5,100 and they have itemized deductions of $18,000, consisting of $10,000 in state income taxes and $8,000 in mortgage interest expense. If they have no dependents for 2019, calculate the following amounts: ​ a. Their adjusted gross income b. The greater of the amount of their standard deduction or their itemized deductions c. Their taxable income

John, age 25, is a full-time student at a state university. John lives with his unmarried sister, Ann, who provides over half of his support. His only income is $4,300 of wages from a part-time job at the college book store. What is Ann's filing status for 2019?

John, 45 years old and unmarried, contributed $1,000 monthly in 2019 to the support of his parents' household. The parents lived alone and their income for 2019 consisted of $500 from dividends and interest. What is John's filing status and how many dependents should he claim on his 2019 tax return?

Jessica, a 17-year-old guitarist in a successful band, earns $100,000 a year and is completely self-supporting although she lives with her parents. Can her parents claim her as a dependent? Why or why not?

In 2019, Wesley has a fairly simple tax situation with moderate wage income and a modest amount of interest income. Wesley, age 45, wishes to use the easiest possible tax form. He may file:

Clay purchased Elm Corporation stock 20 years ago for $10,000. In the current year, he sells the stock for $29,000. What is Clay's gain or loss?

Taxpayers can download tax forms from the IRS Internet site.

A married person with a dependent child may choose to file as head of household if it reduces his or her tax liability.

Kenzie is a research scientist in Tallahassee, Florida. Her spouse Gary stays home to take care of their house and two dogs. Kenzie's total wages for 2019 were $60,500 from which $5,900 of federal income tax was withheld. ​ Calculate the income tax due or income tax refund on Kenzie and Gary's 2019 individual income tax return. Use the tax formula for individuals and show your work.

For 2019, the deduction for personal and dependency exemptions are $4,200 each.

In which of the following situations is the taxpayer not required to file a 2019 income tax return?

How should a taxpayer decide whether to take the standard deduction or claim itemized deductions?