Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The standard deduction and exemption amount are not deductible in the computation of alternative minimum taxable income.

Accepted Answer

A) True 
 B)False

Question 3

Mr. and Mrs. King's regular tax liability on their joint return was $111,850. Which of the following statements is true?

Accepted Answer

A)  If the Kings' tentative minimum tax is $103,300, their total tax liability is $103,300. 
B)  If the Kings' tentative minimum tax is $103,300, their total tax liability is $111,850. 
C)  If the Kings' tentative minimum tax is $143,800; their total tax liability is $143,800. 
D)  Both B. and C. are true. 
A)  If the Kings' tentative minimum tax is $103,300, their total tax liability is $103,300. 
B)  If the Kings' tentative minimum tax is $103,300, their total tax liability is $111,850. 
C)  If the Kings' tentative minimum tax is $143,800; their total tax liability is $143,800. 
D)  Both B. and C. are true.

Question 4

Ms. Dolan, an unmarried individual, invited her elderly uncle, Martin, to move into her home in January of this year. Martin's only income item was $2,390 of taxable interest on a savings account. Ms. Dolan provides over 90% of her uncle's financial support. What is Ms. Dolan's filing status and number of exemptions for the year?

Accepted Answer

A)  Single and one exemption 
B)  Single and two exemptions 
C)  Head of household and one exemption 
D)  Head of household and two exemptions 
A)  Single and one exemption 
B)  Single and two exemptions 
C)  Head of household and one exemption 
D)  Head of household and two exemptions

Question 5

Ms. Kilo's regular income tax before credits on her Form 1040 is $45,890, and she has a $5,700 minimum tax credit from a previous year. Which of the following statements is true?

Accepted Answer

A)  If Ms. Kilo's tentative minimum tax is $50,500, her total tax liability is $44,800. 
B)  If Ms. Kilo's tentative minimum tax is $42,400, her total tax liability is $40,190. 
C)  If Ms. Kilo's tentative minimum tax is $42,400, her total tax liability is $42,400. 
D)  Both A. and C. are true. 
A)  If Ms. Kilo's tentative minimum tax is $50,500, her total tax liability is $44,800. 
B)  If Ms. Kilo's tentative minimum tax is $42,400, her total tax liability is $40,190. 
C)  If Ms. Kilo's tentative minimum tax is $42,400, her total tax liability is $42,400. 
D)  Both A. and C. are true.

Question 6

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.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Mr. and Mrs. Steel, who file a joint return, have $513,200 taxable income in 2016. Compute their regular tax liability.

Accepted Answer

A)  $105,062 
B)  $148,894 
C)  $176,060 
D)  None of the above 
A)  $105,062 
B)  $148,894 
C)  $176,060 
D)  None of the above

Question 9

An individual's taxable income equals adjusted gross income less the exemption amount.

Accepted Answer

A) True 
 B)False

Question 10

An itemized deduction doesn't result in any tax savings in a year in which an individual taxpayer takes the standard deduction.

Accepted Answer

A) True 
 B)False

Question 11

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?

Accepted Answer

A)  David is a qualifying child of the Jelks. 
B)  If David earns less than $4,000 gross income this year, he is a qualifying child of the Jelks. 
C)  If David earns less than $4,000 gross income this year, he is a qualifying relative of the Jelks. 
D)  David is neither a qualifying child nor a qualifying relative of the Jelks. 
A)  David is a qualifying child of the Jelks. 
B)  If David earns less than $4,000 gross income this year, he is a qualifying child of the Jelks. 
C)  If David earns less than $4,000 gross income this year, he is a qualifying relative of the Jelks. 
D)  David is neither a qualifying child nor a qualifying relative of the Jelks.

Question 12

In computing taxable income, an individual is allowed to deduct both the standard deduction and any itemized deduction for the year.

Accepted Answer

A) True 
 B)False

Question 13

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 $100,000. 
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 $100,000.

Question 14

Which of the following statements concerning the individual alternative minimum tax (AMT) is true?

Accepted Answer

A)  The calculation of alternative minimum taxable income begins with taxable income for regular tax purposes. 
B)  A taxpayer with no tax preference items for the year can't be liable for AMT. 
C)  An individual is allowed the same exemption as a corporation in calculating the AMT base. 
D)  The individual AMT rate is a flat 28%. 
A)  The calculation of alternative minimum taxable income begins with taxable income for regular tax purposes. 
B)  A taxpayer with no tax preference items for the year can't be liable for AMT. 
C)  An individual is allowed the same exemption as a corporation in calculating the AMT base. 
D)  The individual AMT rate is a flat 28%.

Question 15

Which of the following statements regarding the calculation of regular tax liability is false?

Accepted Answer

A)  Regardless of filing status, the highest marginal rate for individual taxpayers is 39.6%. 
B)  The individual tax rate schedules are adjusted annually for inflation. 
C)  The tax brackets in the married-filing-separately rate schedule are one-half of the brackets in the married-filing-jointly rate schedule. 
D)  None of the above is false. 
A)  Regardless of filing status, the highest marginal rate for individual taxpayers is 39.6%. 
B)  The individual tax rate schedules are adjusted annually for inflation. 
C)  The tax brackets in the married-filing-separately rate schedule are one-half of the brackets in the married-filing-jointly rate schedule. 
D)  None of the above is false.

Question 16

Which of the following statements regarding the calculation of regular tax liability is false?

Accepted Answer

A)  The rate schedule for calculating regular tax liability depends on the taxpayer's filing status. 
B)  All taxpayer, regardless of the amount of their taxable income, pay a 10% tax on their first bracket of income. 
C)  The individual tax rate schedules are adjusted annually for inflation. 
D)  The tax brackets in the single rate schedule are one-half of the brackets in the married-filing-jointly rate schedule. 
A)  The rate schedule for calculating regular tax liability depends on the taxpayer's filing status. 
B)  All taxpayer, regardless of the amount of their taxable income, pay a 10% tax on their first bracket of income. 
C)  The individual tax rate schedules are adjusted annually for inflation. 
D)  The tax brackets in the single rate schedule are one-half of the brackets in the married-filing-jointly rate schedule.

Question 17

Last year, Mr. Corbett's AGI was $141,000, and his total tax liability was $33,650. This year, his total tax liability is $35,290. Compute the minimum amount of current year tax that Mr. Corbett had to prepay (withholding and estimated payments) to avoid an underpayment penalty.

Accepted Answer

A)  $31,761 
B)  $33,650 
C)  $30,285 
D)  $35,290 
A)  $31,761 
B)  $33,650 
C)  $30,285 
D)  $35,290

Question 18

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.

Accepted Answer

A) True 
 B)False

Question 19

Mr. Andrews is age 58, legally blind, and files as a single taxpayer. His standard deduction for 2016 is $6,300.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)  $15,700 
B)  $12,600 
C)  $13,850 
D)  $15,100 
A)  $15,700 
B)  $12,600 
C)  $13,850 
D)  $15,100

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

The standard deduction and exemption amount are not deductible in the computation of alternative minimum taxable income.

Mr. and Mrs. King's regular tax liability on their joint return was $111,850. Which of the following statements is true?

Ms. Kilo's regular income tax before credits on her Form 1040 is $45,890, and she has a $5,700 minimum tax credit from a previous year. Which of the following statements is true?

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.

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

Mr. and Mrs. Steel, who file a joint return, have $513,200 taxable income in 2016. Compute their regular tax liability.

An individual's taxable income equals adjusted gross income less the exemption amount.

An itemized deduction doesn't result in any tax savings in a year in which an individual taxpayer takes the standard deduction.

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?

In computing taxable income, an individual is allowed to deduct both the standard deduction and any itemized deduction for the year.

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

Which of the following statements concerning the individual alternative minimum tax (AMT) is true?

Which of the following statements regarding the calculation of regular tax liability is false?

Which of the following statements regarding the calculation of regular tax liability is false?

Last year, Mr. Corbett's AGI was $141,000, and his total tax liability was $33,650. This year, his total tax liability is $35,290. Compute the minimum amount of current year tax that Mr. Corbett had to prepay (withholding and estimated payments) to avoid an underpayment penalty.

Mr. Andrews is age 58, legally blind, and files as a single taxpayer. His standard deduction for 2016 is $6,300.

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

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

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

The standard deduction and exemption amount are not deductible in the computation of alternative minimum taxable income.

Mr. and Mrs. King's regular tax liability on their joint return was $111,850. Which of the following statements is true?

Ms. Kilo's regular income tax before credits on her Form 1040 is $45,890, and she has a $5,700 minimum tax credit from a previous year. Which of the following statements is true?

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.

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

Mr. and Mrs. Steel, who file a joint return, have $513,200 taxable income in 2016. Compute their regular tax liability.

An individual's taxable income equals adjusted gross income less the exemption amount.

An itemized deduction doesn't result in any tax savings in a year in which an individual taxpayer takes the standard deduction.

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?

In computing taxable income, an individual is allowed to deduct both the standard deduction and any itemized deduction for the year.

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

Which of the following statements concerning the individual alternative minimum tax (AMT) is true?

Which of the following statements regarding the calculation of regular tax liability is false?

Which of the following statements regarding the calculation of regular tax liability is false?

Last year, Mr. Corbett's AGI was $141,000, and his total tax liability was $33,650. This year, his total tax liability is $35,290. Compute the minimum amount of current year tax that Mr. Corbett had to prepay (withholding and estimated payments) to avoid an underpayment penalty.

Mr. Andrews is age 58, legally blind, and files as a single taxpayer. His standard deduction for 2016 is $6,300.

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

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