Exam 14: The Individual Tax Formula

Mr and Mrs Jelk file a joint return. They provide 65% of the financial support for David, the 14-year old son of a friend who died three years ago. David lives in the home of his aunt Sarah, who provides 35% of his financial support. Which of the following statements is true? 

Benjamin, who files as a single taxpayer, has $359,900 taxable income in 2018. Compute his regular tax liability.

Mr and Mrs Queen provide 90% of the financial support for Mrs Queen's mother, Doreen, who lives in the couples' home. Doreen's only income this year is a $7,500 taxable pension from her former employer. Doreen is not considered a dependent of Mr and Mrs Queen this year for tax purposes.

Which of the following statements regarding the calculation of taxable income is false?

Meraleigh, age 16, is claimed as a dependent on her parents' tax return. This year, Meraleigh earned $510 from babysitting and $220 interest income from a savings account. Compute Meraleigh's standard deduction.

Mr and Mrs King's regular tax liability on their joint return was $479,580. Which of the following statements is true?

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

Mrs Lincoln was employed by GGH Inc. until October, when he accepted a new position with Murdock Inc. Mrs Lincoln earned $145,000 compensation from GGH and $36,000 compensation from Murdock. Which of the following statements is false?

In determining the standard deduction, which of the following statements is true?

Mr and Mrs Harvey's tax liability before credits was $1,675. Their income tax withholding was $1,050, and they are entitled to a $1,189 earned income credit. Which of the following statements is true?

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

Based on the 2017 tax rates, an individual is indifferent between filing as a single taxpayer or a head of household if he has $9,325 or less of taxable income. 

Linda and Raj are engaged to be married. Linda's 2018 taxable income as a single individual would be $212,000. Raj's 2018 taxable income as a single individual would be $418,000. When they marry before the end of 2018, how much of a marriage penalty will they incur?

Alice Grim, a single taxpayer, has $719,000 taxable income, which includes a $240,000 capital gain taxed at 20%. Her alternative minimum taxable income in excess of her exemption amount is $937,400. Compute Alice's regular tax, AMT, and total tax.

Mr Lenz died on May 4, 2017. His widow, Mrs Lenz, maintains a home for her three children, ages 4, 6, and 11. Mrs Lenz must file as a head of household in 2018.

Ms. Lewis maintains a household which is the principal place of residence for Kathy. Ms. Lewis' provides more than 50% of Kathy's financial support. In which of the following cases can Ms. Lewis' claim Kathy as a qualifying child?