Question 1

Mrs Raines died on June 2, 2017. Mr Raines has not remarried and has no children or other dependents. What is his filing status for 2017 and 2018?

Accepted Answer

A)  Surviving spouse for 2017 and 2018. 
B)  Surviving spouse for 2017; single for 2018. 
C)  Married filing jointly for 2017; surviving spouse for 2018. 
D)  Married filing jointly for 2017; single for 2018. 
A)  Surviving spouse for 2017 and 2018. 
B)  Surviving spouse for 2017; single for 2018. 
C)  Married filing jointly for 2017; surviving spouse for 2018. 
D)  Married filing jointly for 2017; single for 2018.

Question 2

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)  $12,350 
B)  $16,000 
C)  $12,000 
D)  $0 
A)  $12,350 
B)  $16,000 
C)  $12,000 
D)  $0

Question 3

Married individuals who elect to file separate tax returns may use the single rates to compute their tax.

Accepted Answer

A) True 
 B)False

Question 4

The highest individual marginal rate for regular tax purposes is 37%, while the highest individual marginal rate for alternative minimum tax (AMT) purposes is only 28%.

Accepted Answer

A) True 
 B)False

Question 5

An individual must pay the greater of her regular income tax or her alternative minimum tax (AMT) for the year.

Accepted Answer

A) True 
 B)False

Question 6

Mr and Mrs Daniels, ages 45, and 42, had the following income items in 2018:
Salaries and wages $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$ 122,500
Interest income $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$6,300
Dividends eligible for 15% rate $\quad$$\quad$$\quad$$\quad$$\quad$ $\quad$  4,000
Capital gain eligible for 15% rate $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$1,900
Mr and Mrs Daniels have no dependents and claim the standard deduction. Compute their income tax liability on a joint return.

Accepted Answer

A)  $15,820 
B)  $19,978 
C)  $22,348 
D)  None of the above. 
A)  $15,820 
B)  $19,978 
C)  $22,348 
D)  None of the above.

Question 7

The unextended due date for the individual tax return (Form 1040) is the 15th day of the third month following the close of the taxable year.

Accepted Answer

A) True 
 B)False

Question 8

Mr Jackson has $100,000 of qualified business income, he is entitled to a Section 199A deduction of $25,000.

Accepted Answer

A) True 
 B)False

Question 9

An individual's taxable income equals adjusted gross income less the greater of the standard deduction or itemized deductions less the Section 199A deduction.

Accepted Answer

A) True 
 B)False

Question 10

Ruth Anne, a single taxpayer, reported $529,500 alternative minimum taxable income before any exemption on her 2018 Form 1040. Calculate Ruth Anne's AMT exemption.

Accepted Answer

A)  $7,975 
B)  $62,925 
C)  $55,400 
D)  None of the above 
A)  $7,975 
B)  $62,925 
C)  $55,400 
D)  None of the above

Question 11

Which of the following statements regarding a qualifying child is false?

Accepted Answer

A)  The child must have been alive at least 180 days during the tax year. 
B)  The child must be a U.S. citizen or resident of the United States, Canada, or Mexico. 
C)  The child must not have provided more than 50% of his or her own financial support during the year. 
D)  The child must not have filed a joint return with a spouse unless the return was filed only as a refund claim. 
A)  The child must have been alive at least 180 days during the tax year. 
B)  The child must be a U.S. citizen or resident of the United States, Canada, or Mexico. 
C)  The child must not have provided more than 50% of his or her own financial support during the year. 
D)  The child must not have filed a joint return with a spouse unless the return was filed only as a refund claim.

Question 12

Mr and Mrs Upton's marginal tax rate on their joint return is 32%. This year, their itemized deductions totaled $24,800, and their standard deduction (MFJ) was $24,000. Compute their incremental tax savings from their itemized deductions.

Accepted Answer

A)  $0 
B)  $256 
C)  $7,680 
D)  $7,936 
A)  $0 
B)  $256 
C)  $7,680 
D)  $7,936

Question 13

Dorley's regular tax liability on her Form 1040 is $451,890. Which of the following statements is true?

Accepted Answer

A)  If Ms. Dorley's tentative minimum tax is $500,700, her total tax liability is $952,590. 
B)  If Ms. Dorley's AMT is $6,380, her total tax liability is $458,270. 
C)  If Ms. Dorley's AMT is $10,112, her total tax liability is $451,890. 
D)  If Ms. Dorley's tentative minimum tax is $421,200, her total tax liability is $421,200. 
A)  If Ms. Dorley's tentative minimum tax is $500,700, her total tax liability is $952,590. 
B)  If Ms. Dorley's AMT is $6,380, her total tax liability is $458,270. 
C)  If Ms. Dorley's AMT is $10,112, her total tax liability is $451,890. 
D)  If Ms. Dorley's tentative minimum tax is $421,200, her total tax liability is $421,200.

Question 14

Tamara and Todd Goble, ages 66 and 60, file a joint return. Todd is legally blind. Compute their standard deduction.

Accepted Answer

A)  $21,400 
B)  $24,000 
C)  $25,300 
D)  $26,600 
A)  $21,400 
B)  $24,000 
C)  $25,300 
D)  $26,600

Question 15

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

Accepted Answer

A)  In a year in which an individual takes the standard deduction, any itemized deductions yield no tax benefit. 
B)  The majority of individual taxpayers itemize rather than taking the standard deduction. 
C)  Individuals elect to itemize deductions in a tax year in which total itemized deductions exceed the standard deduction. 
D)  Individuals who pay self-employment tax can deduct one half of the tax as an above-the-line deduction. 
A)  In a year in which an individual takes the standard deduction, any itemized deductions yield no tax benefit. 
B)  The majority of individual taxpayers itemize rather than taking the standard deduction. 
C)  Individuals elect to itemize deductions in a tax year in which total itemized deductions exceed the standard deduction. 
D)  Individuals who pay self-employment tax can deduct one half of the tax as an above-the-line deduction.

Question 16

Charlie is single and provides 100% of the financial support for his dependent mother, Angela, who lives with Charlie. Charlie's filing status is head of household.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements concerning extensions of time to file an individual tax return is false?

Accepted Answer

A)  The extension of time to file does not extend the time for payment of any tax due. 
B)  An individual may receive an automatic extension of the filing date without providing any explanation to the IRS. 
C)  The extended due date of a calendar-year individual tax return is October 15 of the following year. 
D)  An extension request must be filed before the end of the taxable year. 
A)  The extension of time to file does not extend the time for payment of any tax due. 
B)  An individual may receive an automatic extension of the filing date without providing any explanation to the IRS. 
C)  The extended due date of a calendar-year individual tax return is October 15 of the following year. 
D)  An extension request must be filed before the end of the taxable year.

Question 18

Mr and Mrs Anderson file a joint return. They provide more than 50% of the financial support of their two children, Dana, age 26, and John, age 17. Both children live in the Andersons' home. Dana earned $7,100 from a part-time job, while John earned no income this year. Which of the following statements is true?

Accepted Answer

A)  Both Dana and John are qualifying children of the Andersons. 
B)  Dana is a qualifying relative and John is a qualifying child of the Andersons. 
C)  John is a qualifying child of the Andersons. 
D)  Neither Dana nor John is a qualifying child of the Andersons. 
A)  Both Dana and John are qualifying children of the Andersons. 
B)  Dana is a qualifying relative and John is a qualifying child of the Andersons. 
C)  John is a qualifying child of the Andersons. 
D)  Neither Dana nor John is a qualifying child of the Andersons.

Question 19

Mr Marshall was employed by IMP Inc. until October, when he accepted a new position with Turine Inc. Mr Marshall earned $140,000 compensation from IMP and $36,000 compensation from Turine. Which of the following statements is false?

Accepted Answer

A)  Turine must withhold Social Security tax from Mr. Marshall's $36,000 compensation. 
B)  Turine must withhold Medicare tax from Mr. Marshall's $36,000 compensation. 
C)  Mr. Marshall is entitled to an income tax credit for excess Social Security tax withheld by his employers this year. 
D)  None of the above is false. 
A)  Turine must withhold Social Security tax from Mr. Marshall's $36,000 compensation. 
B)  Turine must withhold Medicare tax from Mr. Marshall's $36,000 compensation. 
C)  Mr. Marshall is entitled to an income tax credit for excess Social Security tax withheld by his employers this year. 
D)  None of the above is false.

Question 20

Mr and Mrs Bennett file a joint tax return. Determine if each of the following unmarried individuals is either a qualifying child or a qualifying relative.
a. Son Alex, age 22, lives in his parents' home and works fulltime as a tax accountant. Alex is self-supporting except for the fact that he does not pay rent to his parents.
b. Daughter Samantha, age 20, is a full-time college student. Samantha lives in a dormitory during the school year, but her parents' home is her permanent residence and they provide 100% of her financial support.
c. Mr Bennett's brother Max is 42 years old and mentally handicapped. Max lives in a privately operated group home, and Mr and Mrs Bennett provide 100% of his financial support. Max has no gross income.
d. Mrs Bennett's mother, Vera, age 67, lives in a retirement community. Mr and Mrs Bennett provide about 75% of her financial support. Vera earned $5,000 this year as a part-time receptionist.

Accepted Answer

a. Not a qualifying child or r

Mrs Raines died on June 2, 2017. Mr Raines has not remarried and has no children or other dependents. What is his filing status for 2017 and 2018?

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.

Married individuals who elect to file separate tax returns may use the single rates to compute their tax.

The highest individual marginal rate for regular tax purposes is 37%, while the highest individual marginal rate for alternative minimum tax (AMT) purposes is only 28%.

An individual must pay the greater of her regular income tax or her alternative minimum tax (AMT) for the year.

The unextended due date for the individual tax return (Form 1040) is the 15th day of the third month following the close of the taxable year.

Mr Jackson has $100,000 of qualified business income, he is entitled to a Section 199A deduction of $25,000.

An individual's taxable income equals adjusted gross income less the greater of the standard deduction or itemized deductions less the Section 199A deduction.

Ruth Anne, a single taxpayer, reported $529,500 alternative minimum taxable income before any exemption on her 2018 Form 1040. Calculate Ruth Anne's AMT exemption.

Which of the following statements regarding a qualifying child is false?

Mr and Mrs Upton's marginal tax rate on their joint return is 32%. This year, their itemized deductions totaled $24,800, and their standard deduction (MFJ) was $24,000. Compute their incremental tax savings from their itemized deductions.

Dorley's regular tax liability on her Form 1040 is $451,890. Which of the following statements is true?

Tamara and Todd Goble, ages 66 and 60, file a joint return. Todd is legally blind. Compute their standard deduction.

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

Charlie is single and provides 100% of the financial support for his dependent mother, Angela, who lives with Charlie. Charlie's filing status is head of household.

Which of the following statements concerning extensions of time to file an individual tax return is false?

Mr Marshall was employed by IMP Inc. until October, when he accepted a new position with Turine Inc. Mr Marshall earned $140,000 compensation from IMP and $36,000 compensation from Turine. Which of the following statements is false?

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

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

Mrs Raines died on June 2, 2017. Mr Raines has not remarried and has no children or other dependents. What is his filing status for 2017 and 2018?

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.

Married individuals who elect to file separate tax returns may use the single rates to compute their tax.

The highest individual marginal rate for regular tax purposes is 37%, while the highest individual marginal rate for alternative minimum tax (AMT) purposes is only 28%.

An individual must pay the greater of her regular income tax or her alternative minimum tax (AMT) for the year.

The unextended due date for the individual tax return (Form 1040) is the 15th day of the third month following the close of the taxable year.

Mr Jackson has $100,000 of qualified business income, he is entitled to a Section 199A deduction of $25,000.

An individual's taxable income equals adjusted gross income less the greater of the standard deduction or itemized deductions less the Section 199A deduction.

Ruth Anne, a single taxpayer, reported $529,500 alternative minimum taxable income before any exemption on her 2018 Form 1040. Calculate Ruth Anne's AMT exemption.

Which of the following statements regarding a qualifying child is false?

Mr and Mrs Upton's marginal tax rate on their joint return is 32%. This year, their itemized deductions totaled $24,800, and their standard deduction (MFJ) was $24,000. Compute their incremental tax savings from their itemized deductions.

Dorley's regular tax liability on her Form 1040 is $451,890. Which of the following statements is true?

Tamara and Todd Goble, ages 66 and 60, file a joint return. Todd is legally blind. Compute their standard deduction.

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

Charlie is single and provides 100% of the financial support for his dependent mother, Angela, who lives with Charlie. Charlie's filing status is head of household.

Which of the following statements concerning extensions of time to file an individual tax return is false?

Mr Marshall was employed by IMP Inc. until October, when he accepted a new position with Turine Inc. Mr Marshall earned $140,000 compensation from IMP and $36,000 compensation from Turine. Which of the following statements is false?

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

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