Exam 14: The Individual Tax Formula

It is impossible for a progressive income tax system to be both marriage neutral and horizontally equitable.

In order to be claimed as a dependent,an individual must be either a qualifying child or a qualifying relative.

Mr.Andrews is age 58,legally blind,and files as a single taxpayer.His standard deduction for 2017 is $6,350.

An individual's taxable income equals adjusted gross income less the greater of the standard deduction or itemized deductions less the exemption amount.

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?

Mrs.Starling worked for Abbot Inc.from January 1 through September 19.Her salary from Abbot for this period totaled $122,000.Mrs.Starling worked for JJT Inc.from October 1 through December 31.Her salary from JJT for this period totaled $38,000.JJT is not required to withhold Social Security tax from Mrs.Starling's salary because Abbot Inc.already withheld the maximum tax for the year.

An individual with $500,000 taxable income has the same marginal rate as a single taxpayer or as a head of household.

Mr.Jones and his first wife were legally divorced on February 19,2017.Mr.Jones remarried the second Mrs.Jones on December 20,2017.Which of the following describes Mr.Jones' filing status in 2017?

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

Mr.and Mrs.Borem spent $1,435 for child care for their two dependent children,who are two and four years old.Mr.Borem's earned income was $55,870,Mrs.Borem had no earned income,and the AGI on their joint return was $66,210.Calculate their dependent care credit.

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3 and 6.The Caseys spent $10,300 for child care this year.Mrs.Casey is employed full-time as an attorney.Mr.Casey is an unpublished novelist who has yet to earn any money from his writing.The Caseys are eligible for a dependent care credit.

Marie,an unmarried taxpayer,is 26 years old.This year,Marie earned $50,000 gross income.Her itemized deductions totaled $5,100.Marie maintained a home for her 12-year-old sister who qualifies as Marie's dependent.Compute Marie's taxable income.

A taxpayer who knowingly signs a joint return on which his spouse has failed to report her income is liable for any tax assessments made by the IRS on that income.