Question 1

Mr.Jackson has $100,000 of qualified business income,he is entitled to a QBI deduction of $25,000.

Accepted Answer

A) True 
 B)False

Question 2

Jennifer and Jamar are married and live in a home with their 13-year-old dependent son,Oscar.This year,they had the following tax information.  Compute adjusted gross income (AGI)and taxable income.

Accepted Answer

A) AGI $157,800; taxable income $124,188. 
B) AGI $157,800; taxable income $130,900. 
C) AGI $151,088; taxable income $89,888. 
D) AGI $151,088; taxable income $107,888.

Question 3

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 4

Ms.Kilo's regular income tax before credits on her Form 1040 is $450,890,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 $450,890,her total tax liability is $445,190. 
B) If Ms.Kilo's tentative minimum tax is $445,890,her total tax liability is $440,190. 
C) If Ms.Kilo's tentative minimum tax is $445,890,her total tax liability is $445,890. 
D) Both A.and C.are true.

Question 5

Mr.and Mrs.Reid reported $1,435,700 ordinary taxable income for regular tax purposes and had $158,200 positive AMT adjustments and preferences.Compute their tentative minimum tax.

Accepted Answer

A) $414,414 
B) $442,396 
C) $446,292 
D) $398,100

Question 6

Mr.Jones and his first wife were legally divorced on February 19,2019.Mr.Jones remarried the second Mrs.Jones on December 20,2019.Which of the following describes Mr.Jones' filing status in 2019?

Accepted Answer

A) Married filing jointly with the second Mrs.Jones 
B) Married filing jointly with the first Mrs.Jones 
C) Married filing separately (can't file jointly with either spouse) 
D) None of the above

Question 7

Mr.and Mrs.Stern reported $1,148,340 alternative minimum taxable income before any exemption on their 2019 Form 1040.Calculate their AMT exemption.

Accepted Answer

A) $0 
B) $31,935 
C) $109,400 
D) None of the above

Question 8

Mrs.Raines died on June 2,2018.Mr.Raines has not remarried and has no children or other dependents.What is his filing status for 2018 and 2019?

Accepted Answer

A) Surviving spouse for 2018 and 2019. 
B) Surviving spouse for 2018; single for 2019. 
C) Married filing jointly for 2018; surviving spouse for 2019. 
D) Married filing jointly for 2018; single for 2019.

Question 9

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $2,000 from babysitting and $1,280 interest income from a savings account.Compute Melissa's standard deduction.

Accepted Answer

A) $2,000 
B) $2,350 
C) $0 
D) $1,100

Question 10

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

Accepted Answer

A) $21,400 
B) $24,400 
C) $25,700 
D) $27,000

Question 11

The standard deduction for single individuals equals one-half of the standard deduction for married individuals filing jointly.

Accepted Answer

A) True 
 B)False

Question 12

Mr.and Mrs.David file a joint tax return.They have $169,300 taxable income in 2019,$120,300 of which is ordinary income and $49,000 of which is taxed at a 15% preferential rate.Compute their tax savings from the preferential rate.

Accepted Answer

A) $7,032 
B) $3,448 
C) $10,798 
D) None of the above.

Question 13

Linda and Raj are engaged to be married.Linda's 2019 taxable income as a single individual would be $212,000.Raj's 2019 taxable income as a single individual would be $418,000.When they marry before the end of 2019,how much of a marriage penalty will they incur?

Accepted Answer

A) $0 
B) $352 
C) $599 
D) None of the above

Question 14

Mr.Lenz died on May 4,2018.His widow,Mrs.Lenz,maintains a home for her three children,ages 4,6,and 11.Mrs.Lenz must file as a head of household in 2019.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Which of the following statements concerning extensions of time to file an individual tax return is false?

Accepted Answer

A) The extension of time to file does not extend the time for payment of any tax due. 
B) An individual may receive an automatic extension of the filing date without providing any explanation to the IRS. 
C) The extended due date of a calendar-year individual tax return is October 15 of the following year. 
D) An extension request must be filed before the end of the taxable year.

Question 17

Mr.Pearl's total income and self-employment tax on this year's Form 1040 is $72,610.If Mr.Pearl paid at least $65,349 of this tax in the form of withholding or quarterly estimated payments,he will not incur an underpayment penalty.

Accepted Answer

A) True 
 B)False

Question 18

Mr.and Mrs.Liddy,ages 39 and 41,file a joint return and have no dependents for the year.Here is their relevant information: Standard Deduction Table.  Compute their adjusted gross income (AGI)and taxable income.

Accepted Answer

A) AGI $50,200; taxable income $25,800. 
B) AGI $52,000; taxable income $35,750. 
C) AGI $52,000; taxable income $33,550. 
D) AGI $50,200; taxable income $9,950.

Question 19

Mr.and Mrs.Casey have two dependent children,ages 3 and 6.The Caseys spent $10,300 for child care this year.Mrs.Casey is employed full-time as an attorney.Mr.Casey is an unpublished novelist who has yet to earn any money from his writing.The Caseys are eligible for a dependent care credit.

Accepted Answer

A) True 
 B)False

Question 20

The earned income credit offsets the burden of the federal payroll tax on low-income families and encourages individuals to seek employment rather than to depend on welfare.

Accepted Answer

A) True 
 B)False

Exam 14: The Individual Tax Formula

Mr.Jackson has $100,000 of qualified business income,he is entitled to a QBI deduction of $25,000.

Jennifer and Jamar are married and live in a home with their 13-year-old dependent son,Oscar.This year,they had the following tax information. Compute adjusted gross income (AGI) and taxable income.

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

Ms.Kilo's regular income tax before credits on her Form 1040 is $450,890,and she has a $5,700 minimum tax credit from a previous year.Which of the following statements is true?

Mr.and Mrs.Reid reported $1,435,700 ordinary taxable income for regular tax purposes and had $158,200 positive AMT adjustments and preferences.Compute their tentative minimum tax.

Mr.Jones and his first wife were legally divorced on February 19,2019.Mr.Jones remarried the second Mrs.Jones on December 20,2019.Which of the following describes Mr.Jones' filing status in 2019?

Mr.and Mrs.Stern reported $1,148,340 alternative minimum taxable income before any exemption on their 2019 Form 1040.Calculate their AMT exemption.

Mrs.Raines died on June 2,2018.Mr.Raines has not remarried and has no children or other dependents.What is his filing status for 2018 and 2019?

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $2,000 from babysitting and $1,280 interest income from a savings account.Compute Melissa's standard deduction.

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

The standard deduction for single individuals equals one-half of the standard deduction for married individuals filing jointly.

Mr.and Mrs.David file a joint tax return.They have $169,300 taxable income in 2019,$120,300 of which is ordinary income and $49,000 of which is taxed at a 15% preferential rate.Compute their tax savings from the preferential rate.

Linda and Raj are engaged to be married.Linda's 2019 taxable income as a single individual would be $212,000.Raj's 2019 taxable income as a single individual would be $418,000.When they marry before the end of 2019,how much of a marriage penalty will they incur?

Mr.Lenz died on May 4,2018.His widow,Mrs.Lenz,maintains a home for her three children,ages 4,6,and 11.Mrs.Lenz must file as a head of household in 2019.

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.

Which of the following statements concerning extensions of time to file an individual tax return is false?

Mr.Pearl's total income and self-employment tax on this year's Form 1040 is $72,610.If Mr.Pearl paid at least $65,349 of this tax in the form of withholding or quarterly estimated payments,he will not incur an underpayment penalty.

Mr.and Mrs.Liddy,ages 39 and 41,file a joint return and have no dependents for the year.Here is their relevant information: Standard Deduction Table. Compute their adjusted gross income (AGI) and taxable income.

Mr.and Mrs.Casey have two dependent children,ages 3 and 6.The Caseys spent $10,300 for child care this year.Mrs.Casey is employed full-time as an attorney.Mr.Casey is an unpublished novelist who has yet to earn any money from his writing.The Caseys are eligible for a dependent care credit.

The earned income credit offsets the burden of the federal payroll tax on low-income families and encourages individuals to seek employment rather than to depend on welfare.