Exam 4: Individual Income Tax Overview, Exemptions, and Filing Status

If an unmarried taxpayer provides more than half the support for a cousin who lives in the taxpayer's home for the entire year, the taxpayer will qualify for head of household filing status.

The standard deduction amount for married filing separately taxpayers (MFS) is less than the standard deduction amount for married filing jointly taxpayers.

Jane and Ed Rochester are married with a two-year-old child who lives with them and whom they support financially. In 2016, Ed and Jane realized the following items of income and expense: They also qualified for a $1,000 tax credit. Their employers withheld $1,800 in taxes from their paychecks (in the aggregate). Finally, the 2016 standard deduction amount is $12,600 and the 2016 exemption amount is $4,050. What is the couple's taxable income?

Jane is unmarried and has no children, but provides more than half of her mother's financial support. Jane's mother lives in an apartment across town and has a part-time job earning $5,000 a year. Which is the most advantageous filing status available to Jane?

Qualified dividends are taxed at the same rate as ordinary income.

All of the following are for AGI deductions except:

Itemized deductions and the standard deduction are deductions from AGI but deductions for personal and dependency exemptions are deductions for AGI.

If an unmarried taxpayer is able to claim a dependency exemption for another individual, the taxpayer is automatically eligible for the head of household filing status.

A personal automobile is a capital asset.

Doug and Lisa have determined that their tax liability on their joint return is $3,700. They have made prepayments of $1,000 and also are entitled to child tax credits of $2,000. What is the amount of their tax refund or taxes due?

Kabuo and Melinda got married on December 15, year 1. Kabuo's salary for the year was $54,000, and Melinda's was $62,000. In addition, Kabuo received $250 of interest income, ($100 of which was from municipal bonds), and Melinda received $10,000 of alimony from a former spouse. If Kabuo and Melinda choose to file jointly, what is their year 1 gross income?

In determining filing status purposes, which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

Bonnie and Ernie file a joint return. Bonnie works and receives income during the year but Ernie does not. If the couple files a joint tax return, Ernie is responsible for paying any taxes due if Bonnie is unable to pay the taxes.

Sullivan's wife Susan died four years ago. Sullivan has not remarried and he maintains a home for his dependent child Sammy. In 2016, Sullivan received $70,000 of salary from his employer and he paid $6,000 of itemized deductions. What is Sullivan's taxable income for 2016?

Michael, Diane, Karen, and Kenny provide support for their mother Janet who is 75 years old. Janet lives by herself in an apartment in Los Angeles. Janet's gross income for the year is $3,000. Janet provides 10% of her own support, Michael provides 40% of Janet's support, Diane provides 8% of Janet's support, Karen provides 10% of Janet's support, and Kenny provides the remaining 32% of Janet's support. Under a multiple support agreement, who may claim a dependency exemption for Janet as a qualifying relative?

Sally received $50,000 of compensation from her employer and she received $400 of interest from a corporate bond. What is the amount of Sally's gross income from these items?

The Dashwoods have calculated their taxable income to be $80,000 for 2016, which includes $2,000 of long-term capital gains. Using the appropriate tax rate schedule, calculate the Dashwood's income tax liability assuming they are married and file a joint return.

Which of the following statements is true?

Char and Russ Dasrup have one daughter, Siera, who is 16 years old. In November of last year, the Dasrup's took in Siera's 16 year old friend, Angela, who has lived with them ever since. The Dasrup's have not legally adopted Angela but Siera often refers to Angela as "her sister." The Dasrup's provide all of the support for both girls, neither girl receives any income during the year, and both girls live at the Dasrup's residence. Which of the following statements is true regarding the dependency exemptions (and the reason for the exemptions) Char and Russ may claim for the current year for these girls?

For filing status purposes, the taxpayer's marital status is determined at what point during the year?