Question 1

Mr. and Mrs. Lansing, who file a joint tax return, have four dependent children under age 17. Which of the following statements is false?

Accepted Answer

A)  If the Lansings' AGI is $77,900, their child tax credit is $8,000. 
B)  If the Lansings' AGI is $417,300, their child tax credit is $7,100. 
C)  If the Lansings' AGI is $596,000, their child tax credit is zero. 
D)  None of these choices arefalse. 
A)  If the Lansings' AGI is $77,900, their child tax credit is $8,000. 
B)  If the Lansings' AGI is $417,300, their child tax credit is $7,100. 
C)  If the Lansings' AGI is $596,000, their child tax credit is zero. 
D)  None of these choices arefalse.

Question 2

For the taxable year in which a married person dies, the widow or widower can file a joint return with the deceased.

Accepted Answer

A) True 
 B)False

Question 3

Mr. and Mrs. David file a joint tax return. They have $169,300 taxable income in 2020, $120,300 of which is ordinary income and $49,000 of which is taxed at a 15% preferential rate. Compute their tax savings from the preferential rate.

Accepted Answer

A)  $7,032 
B)  $3,430 
C)  $780 
D)  None of these choices are correct 
A)  $7,032 
B)  $3,430 
C)  $780 
D)  None of these choices are correct

Question 4

Mr. and Mrs. Steel, who file a joint return, have $513,200 taxable income in 2020. Compute their regular tax liability.

Accepted Answer

A)  $105,062 
B)  $129,210 
C)  $179,620 
D)  None of these choices are correct 
A)  $105,062 
B)  $129,210 
C)  $179,620 
D)  None of these choices are correct

Question 5

An extension of the time to file an individual tax return also extends the time to pay any balance of tax due with the return.

Accepted Answer

A) True 
 B)False

Question 6

Linda and Raj are engaged to be married. Linda's 2020 taxable income as a single individual would be $212,000. Raj's 2020 taxable income as a single individual would be $418,000. When they marry before the end of 2020, how much of a marriage penalty will they incur?

Accepted Answer

A)  $0 
B)  $159 
C)  $599 
D)  None of these choices are correct 
A)  $0 
B)  $159 
C)  $599 
D)  None of these choices are correct

Question 7

An individual must pay the greater of her regular income tax or her tentative minimum tax for the year.

Accepted Answer

A) True 
 B)False

Question 8

Last year, Mr. Tyker's AGI was $182,800, and his total tax liability was $51,650. This year, his total tax liability is $65,440. Compute the minimum amount of current year tax that Mr. Tyker had to prepay (withholding and estimated payments) to avoid an underpayment penalty.

Accepted Answer

A)  $65,440 
B)  $51,650 
C)  $56,815 
D)  $58,896 
A)  $65,440 
B)  $51,650 
C)  $56,815 
D)  $58,896

Question 9

Mr. Thomas is age 69, has perfect vision, and files as a single taxpayer. His standard deduction for 2020 is $14,050.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements describing individual tax deductions is false?

Accepted Answer

A)  Individuals can take both above-the-line and the standard deduction in the same year. 
B)  Individuals elect to itemize deductions in a tax year in which total itemized deductions exceed the standard deduction. 
C)  In a year in which an individual takes the standard deduction, any itemized deductions yield no tax benefit. 
D)  Individuals who pay self-employment tax can deduct the tax as an itemized deduction. 
A)  Individuals can take both above-the-line and the standard deduction in the same year. 
B)  Individuals elect to itemize deductions in a tax year in which total itemized deductions exceed the standard deduction. 
C)  In a year in which an individual takes the standard deduction, any itemized deductions yield no tax benefit. 
D)  Individuals who pay self-employment tax can deduct the tax as an itemized deduction.

Question 11

An individual with $700,000 taxable income has the same marginal rate as a single taxpayer or as a head of household.

Accepted Answer

A) True 
 B)False

Question 12

Adjusted gross income equals total income less itemized deductions.

Accepted Answer

A) True 
 B)False

Question 13

Based on the 2020 tax rates, an individual is indifferent between filing as a single taxpayer or a head of household if he has $9,875 or less of taxable income.

Accepted Answer

A) True 
 B)False

Question 14

Mr. and Mrs. Stern reported $1,164,540 alternative minimum taxable income before any exemption on their 2020 Form 1040. Calculate their AMT exemption.

Accepted Answer

A)  $0 
B)  $31,935 
C)  $113,400 
D)  None of these choices are correct 
A)  $0 
B)  $31,935 
C)  $113,400 
D)  None of these choices are correct

Question 15

Hunter, age 17, is considered a dependent of his parents for tax purposes. This year, Hunter earned $16,000 for appearing in a television commercial. Compute Hunter's standard deduction.

Accepted Answer

A)  $1,100 
B)  $16,000 
C)  $12,400 
D)  $0 
A)  $1,100 
B)  $16,000 
C)  $12,400 
D)  $0

Question 16

Which of the following situations result in a marriage penalty for federal income tax purposes?

Accepted Answer

A)  Mr. and Mrs. Gooding, who have filed a joint return for 11 years, divorce before the end of the tax year. 
B)  Mr. Dylan, who is a head of household, marries Ms. Boyle, who has no taxable income, before the end of the tax year. 
C)  Mr. and Mrs. Small, who have filed a joint return for 20 years, elect to file separate tax returns this year. 
D)  Mr. Langley, a single taxpayer, marries Ms. Nuyen, also a single taxpayer. Both individuals earn a salary in excess of $350,000. 
A)  Mr. and Mrs. Gooding, who have filed a joint return for 11 years, divorce before the end of the tax year. 
B)  Mr. Dylan, who is a head of household, marries Ms. Boyle, who has no taxable income, before the end of the tax year. 
C)  Mr. and Mrs. Small, who have filed a joint return for 20 years, elect to file separate tax returns this year. 
D)  Mr. Langley, a single taxpayer, marries Ms. Nuyen, also a single taxpayer. Both individuals earn a salary in excess of $350,000.

Question 17

An above-the-line deduction reduces both adjusted gross income and taxable income.

Accepted Answer

A) True 
 B)False

Question 18

Mr. and Mrs. Casey have two dependent children, ages 3 and 6. The Caseys spent $10,300 for childcare this year. Mrs. Casey is employed full-time as an attorney. Mr. Casey is an unpublished novelist who has yet to earn any money from his writing. The Caseys are eligible for a dependent care credit.

Accepted Answer

A) True 
 B)False

Question 19

The QBI deduction lowers taxable income.

Accepted Answer

A) True 
 B)False

Question 20

Mr. Jackson has $100,000 of qualified business income, he is entitled to a QBI deduction of $25,000.

Accepted Answer

A) True 
 B)False

Mr. and Mrs. Lansing, who file a joint tax return, have four dependent children under age 17. Which of the following statements is false?

For the taxable year in which a married person dies, the widow or widower can file a joint return with the deceased.

Mr. and Mrs. David file a joint tax return. They have $169,300 taxable income in 2020, $120,300 of which is ordinary income and $49,000 of which is taxed at a 15% preferential rate. Compute their tax savings from the preferential rate.

Mr. and Mrs. Steel, who file a joint return, have $513,200 taxable income in 2020. Compute their regular tax liability.

An extension of the time to file an individual tax return also extends the time to pay any balance of tax due with the return.

Linda and Raj are engaged to be married. Linda's 2020 taxable income as a single individual would be $212,000. Raj's 2020 taxable income as a single individual would be $418,000. When they marry before the end of 2020, how much of a marriage penalty will they incur?

An individual must pay the greater of her regular income tax or her tentative minimum tax for the year.

Last year, Mr. Tyker's AGI was $182,800, and his total tax liability was $51,650. This year, his total tax liability is $65,440. Compute the minimum amount of current year tax that Mr. Tyker had to prepay (withholding and estimated payments) to avoid an underpayment penalty.

Mr. Thomas is age 69, has perfect vision, and files as a single taxpayer. His standard deduction for 2020 is $14,050.

Which of the following statements describing individual tax deductions is false?

An individual with $700,000 taxable income has the same marginal rate as a single taxpayer or as a head of household.

Adjusted gross income equals total income less itemized deductions.

Based on the 2020 tax rates, an individual is indifferent between filing as a single taxpayer or a head of household if he has $9,875 or less of taxable income.

Mr. and Mrs. Stern reported $1,164,540 alternative minimum taxable income before any exemption on their 2020 Form 1040. Calculate their AMT exemption.

Hunter, age 17, is considered a dependent of his parents for tax purposes. This year, Hunter earned $16,000 for appearing in a television commercial. Compute Hunter's standard deduction.

Which of the following situations result in a marriage penalty for federal income tax purposes?

An above-the-line deduction reduces both adjusted gross income and taxable income.

Mr. and Mrs. Casey have two dependent children, ages 3 and 6. The Caseys spent $10,300 for childcare this year. Mrs. Casey is employed full-time as an attorney. Mr. Casey is an unpublished novelist who has yet to earn any money from his writing. The Caseys are eligible for a dependent care credit.

The QBI deduction lowers taxable income.

Mr. Jackson has $100,000 of qualified business income, he is entitled to a QBI deduction of $25,000.

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters

Exam 14: The Individual Tax Formula

Mr. and Mrs. Lansing, who file a joint tax return, have four dependent children under age 17. Which of the following statements is false?

For the taxable year in which a married person dies, the widow or widower can file a joint return with the deceased.

Mr. and Mrs. David file a joint tax return. They have $169,300 taxable income in 2020, $120,300 of which is ordinary income and $49,000 of which is taxed at a 15% preferential rate. Compute their tax savings from the preferential rate.

Mr. and Mrs. Steel, who file a joint return, have $513,200 taxable income in 2020. Compute their regular tax liability.

An extension of the time to file an individual tax return also extends the time to pay any balance of tax due with the return.

Linda and Raj are engaged to be married. Linda's 2020 taxable income as a single individual would be $212,000. Raj's 2020 taxable income as a single individual would be $418,000. When they marry before the end of 2020, how much of a marriage penalty will they incur?

An individual must pay the greater of her regular income tax or her tentative minimum tax for the year.

Last year, Mr. Tyker's AGI was $182,800, and his total tax liability was $51,650. This year, his total tax liability is $65,440. Compute the minimum amount of current year tax that Mr. Tyker had to prepay (withholding and estimated payments) to avoid an underpayment penalty.

Mr. Thomas is age 69, has perfect vision, and files as a single taxpayer. His standard deduction for 2020 is $14,050.

Which of the following statements describing individual tax deductions is false?

An individual with $700,000 taxable income has the same marginal rate as a single taxpayer or as a head of household.

Adjusted gross income equals total income less itemized deductions.

Based on the 2020 tax rates, an individual is indifferent between filing as a single taxpayer or a head of household if he has $9,875 or less of taxable income.

Mr. and Mrs. Stern reported $1,164,540 alternative minimum taxable income before any exemption on their 2020 Form 1040. Calculate their AMT exemption.

Hunter, age 17, is considered a dependent of his parents for tax purposes. This year, Hunter earned $16,000 for appearing in a television commercial. Compute Hunter's standard deduction.

Which of the following situations result in a marriage penalty for federal income tax purposes?

An above-the-line deduction reduces both adjusted gross income and taxable income.

Mr. and Mrs. Casey have two dependent children, ages 3 and 6. The Caseys spent $10,300 for childcare this year. Mrs. Casey is employed full-time as an attorney. Mr. Casey is an unpublished novelist who has yet to earn any money from his writing. The Caseys are eligible for a dependent care credit.

The QBI deduction lowers taxable income.

Mr. Jackson has $100,000 of qualified business income, he is entitled to a QBI deduction of $25,000.

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters