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

Greg is single. During 2016, he received $60,000 of salary from his employer. That was his only source of income. He reported $3,000 of for AGI deductions and $7,000 of itemized deductions. The 2016 standard deduction amount for a single taxpayer is $6,300 and the 2016 exemption amount is $4,050. What is Greg's taxable income?

In addition to the individual income tax, individuals may be required to pay taxes imposed on tax bases other than the individual's regular taxable income.

The income tax base for an individual tax return is:

Jamison's gross tax liability is $7,000. Jamison had $2,000 of available credits and he had $4,000 of taxes withheld by his employer. What is Jamison's taxes due (or taxes refunded) with his tax return?

Sam and Tacy have been married for 25 years. They have filed a joint return every year of their marriage. They have two sons Christopher and Zachary. Christopher is 19 years old and Zachary is 14 years old. Christopher lived in his parents' home from January through August and he lived in his own apartment from September through December. During the year, Christopher attended college for one month before dropping out. Christopher's living expenses totaled $12,000 for the year. Of that, Christopher paid $5,000 from income he received while working a part time job. Sam and Tacy provided the remaining $7,000 of Christopher's support. Zachary lived at home the entire year and did not earn any income. How many personal and dependency exemptions are Sam and Tacy entitled to claim for the year and for whom are they allowed to claim the exemption(s)?

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 gross income?

In June of year 1, Eric's wife Savannah died. Eric did not remarry during year 1, year 2, or year 3. Eric maintains the household for his dependent daughter Catherine in year 1, year 2, and year 3. Which is the most advantageous filing status for Eric in year 2?

The character of income determines the rate at which the income is taxed.

Which of the following statements regarding realized income is true?

A child who is her parents' qualifying child can claim a personal exemption for herself as long as her parents choose not to claim her as a dependent.

The test for a qualifying child includes a gross income restriction while the test for qualifying relative does not.

Charlotte is the Lucas family's 22-year-old daughter. She is a full-time student at an out-of-state university but plans to return home when the school year ends. During the year, Charlotte earned $4,000 of income working part-time. Her support totaled $30,000 for the year. Of this amount, Charlotte paid $7,000 with her own funds, her parents paid $14,000, and Charlotte's grandparents paid $9,000. Which of the following statements most accurately describes whether Charlotte's parents can claim a dependency exemption for Charlotte?

Which of the following statements about a qualifying person for head of household filing status is true?

A taxpayer who is claimed as a dependent on another's tax return may not claim any personal or dependency exemptions on his or her tax return.

Which of the following statements regarding tax credits is true?

The relationship requirement for qualifying relative includes cousins.

Certain types of income are taxed at a lower rate than ordinary income.

A taxpayer may qualify for the head of household filing status even if she does not have any dependent children.

Taxpayers may prepay their tax liability through withholdings and through estimated tax payments.

An individual with gross income of $5,000 could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.