Exam 3: Preparing Your Taxes

Dwayne and Gayle were divorced September 29,have not remarried,and have no dependents.Their filing status for the year will each be "married" since they were married for more than half of the year.

Which of the following offer tax preparation services?

You are more likely to have your tax return audited if you have large deductions for meals,travel,and entertainment.

Social security taxes are paid on earned income but not on investment income.

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. -My son,age 21,earned $5,000 last year.He still lives at home,and I provide over 50% of his support.I [can | cannot] claim him as a dependent on my tax return if he is a full-time college student.

In 2014,the total social security tax was

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. -The date by which your tax liability must be paid in order to avoid late payment penalties and/or interest is [April 15 | August 15].

You have up to three years after mailing your tax return to file an amended tax return (1040X).

Russ and Lois got married December 30.Although they were single for most of the year,they can legally file as married taxpayers in the year of the wedding.

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. -The standard deduction directly reduces the taxpayer's [taxable income | taxes due].

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. -A tax credit could result from [owning a home | adopting a child].

Which of the following cannot be adjustment(s)to gross income on the 1040 form?

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. -The higher your income,the [greater | smaller] the probability you will be audited.

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. -Usually a married couple will pay less income tax if they file [jointly | separately].

Persons who work for more than one employer in any year will owe more social security taxes than if all their income was earned from a single employer.

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. -When matching social security contributions,employers pay [the same | a lesser] amount of social security taxes as/than the employee.

Charlie earned $70,000.If the total social security tax rate is 15.3%,then how much was his total social security tax? Of this,how much did his employer pay in social security taxes for Charlie? (Show all work.)

Itemized nonbusiness expenses do not include

Mike and Mandy are considering contributing $5,000 to their favorite tax-deductible charity.This contribution will bring their total itemized deductions to $20,000.Assuming they are in the 28% marginal tax bracket,how much will they save in taxes by contributing this $5,000 to charity? (Hint: Consider the amount of the standard deduction.)

The Medicare portion of the FICA tax is paid on 100% of earnings.