Exam 3: Preparing Your Taxes

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Tax [avoidance | evasion] focuses on reducing taxes in ways that are legal and compatible with the intent of Congress.

The sale of your home will rarely result in a taxable capital gain.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Major software providers have online versions for preparing federal taxes that are [free to all tax filers | free to qualified tax filers].

Mandi and Thomas were married and had one child,age 7.Mandi died in 2013 leaving Thomas a single parent.In 2014,the most favorable filing status for Thomas would be

For tax purposes,head of household refers to

Which of the following are legal methods of reducing your current tax liability?

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[Alimony | Child support] received would be reported as taxable income.

Personal exemptions are deductions from AGI based on the number of persons supported by the taxpayer's income.

Mike is a 19-year-old college student who earned $10,000 and spent it all on his support during the year.His parents may claim him as a tax dependent as long as

Diana sold mutual fund shares she had owned 4 years so that she could use the proceeds to travel across Europe with her son.Diana is in the 35% marginal tax bracket and her capital gains from this sale were $30,000.How much tax would Diana owe on those gains?

State income taxes and real estate taxes are both itemized deduction items.

A short-term capital gain would be taxed at the same rate as your salary.

You should itemize deductions when total itemized deductions exceed the standard deduction.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -There is a [high | low] chance that one's tax return will be audited in a given year.

Ben and Jack both earned $60,000 this year.Ben (age 30)is married with two children,and Jack (age 61)is single with no dependents.Which of the following is true regarding the amount of Social Security taxes they will pay?

The main objective of tax planning is to maximize the amount of money you keep by minimizing the amount of taxes you pay.

Barney Smith has only one itemized deduction item,the $4,400 he gave to his church.His standard deduction this year is $6,200,and he is in the 15% marginal tax bracket.How much will his contribution to the church save Barney in taxes this year?

Who would be most likely to have to pay estimated taxes?

The tax year corresponds to the April 15 filing deadline,with a new tax year beginning April 16th.

Itemized deductions are listed on Schedule