Question 1

Only natural and adopted children or stepchildren can be a qualifying child for tax purposes.

Accepted Answer

A) True 
 B)False

Question 2

Hunter,age 17,is claimed as a dependent on his parents' tax return.This year,Hunter earned $8,500 for appearing in a television commercial.Compute Hunter's standard deduction.

Accepted Answer

A) $1,050 
B) $8,500 
C) $6,350 
D) $0

Question 3

Ms.Kilo is an unmarried individual.She has $219,344 taxable income in 2017.Compute Ms.Kilo's regular tax liability if she files as a single taxpayer and if she files as a surviving spouse.

Accepted Answer

A) Single $57,500; surviving spouse $61,924 
B) Single $55,990; surviving spouse $54,174 
C) Single $43,896; surviving spouse $48,468 
D) None of the above

Question 4

Mr.and Mrs.Stern reported $312,440 alternative minimum taxable income before any exemption on their 2017 Form 1040.Calculate their AMT exemption.

Accepted Answer

A) $0 
B) $38,385 
C) $83,500 
D) None of the above

Question 5

Based on the 2017 tax rates,an individual is indifferent between filing as a single taxpayer or a head of household if he has $9,325 or less of taxable income.

Accepted Answer

A) True 
 B)False

Question 6

Mr.Thomas is age 69,has perfect vision,and files as a single taxpayer.His standard deduction for 2017 is $7,900.

Accepted Answer

A) True 
 B)False

Question 7

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 8

Mr.and Mrs.Anderson file a joint return.They provide more than 50% of the financial support of their two children,Dana,age 26,and John,age 17.Both children live in the Andersons' home.Dana earned $7,100 from a part-time job,while John earned no income this year.Which of the following statements is true?

Accepted Answer

A) Both Dana and John are qualifying children of the Andersons. 
B) Dana is a qualifying relative and John is a qualifying child of the Andersons. 
C) John is a qualifying child of the Andersons. 
D) Neither Dana nor John is a qualifying child of the Andersons.

Question 9

Mr.and Mrs.Eller's AGI last year was $287,300,and their total tax was $70,268.The couple's safe-harbor estimate of current year tax is $77,295.

Accepted Answer

A) True 
 B)False

Question 10

Mr.and Mrs.Kline file a joint return on which they claim the standard deduction and two exemptions.If the taxable income on their return is $55,300,they are not paying a marriage penalty.

Accepted Answer

A) True 
 B)False

Question 11

Mr.and Mrs.Reece couldn't complete their 2017 Form 1040 before April 15,2018.They estimate that they will have a $700 balance of tax due with the return.Which of the following statement is true?

Accepted Answer

A) If the Reeces fail to file their return by April 15,they may opt to request an extension but still will owe penalties to the IRS. 
B) The Reeces can file an extension request by April 15 to extend the tax payment and filing date for six months without penalty. 
C) The Reeces can file an extension request by April 15 to extend the filing date for six months without penalty.They must pay the $700 estimated balance of tax due with the extension request. 
D) None of the above is true.

Question 12

Mr.and Mrs.Queen provide 90% of the financial support for Mrs.Queen's mother,Doreen,who lives in the couples' home.Doreen's only income this year is a $7,500 taxable pension from her former employer.Mr.and Mrs.Queen can't claim Doreen as a dependent this year.

Accepted Answer

A) True 
 B)False

Question 13

An individual must pay the greater of her regular income tax or her alternative minimum tax (AMT)for the year.

Accepted Answer

A) True 
 B)False

Question 14

Mr.Lenz died on May 4,2017.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 2018.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Mr.and Mrs.Luang reported $517,900 ordinary taxable income for regular tax purposes and had $39,100 positive AMT adjustments and preferences.Compute their tentative minimum tax.

Accepted Answer

A) $152,204 
B) $155,960 
C) $144,820 
D) None of the above

Question 17

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

Accepted Answer

A) The extension of time to file does not extend the time for payment of tax. 
B) The extension of time to file is for four months. 
C) An individual who requests an extension of time to file must provide the IRS with a reasonable explanation. 
D) The IRS may deny an extension request if the taxpayer fails to provide a reasonable explanation.

Question 18

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 19

Benjamin,who files as a single taxpayer,has $359,900 taxable income in 2017.Compute his regular tax liability.

Accepted Answer

A) $102,166 
B) $112,684 
C) $118,767 
D) None of the above

Question 20

Linda and Raj are engaged to be married.Linda's 2017 taxable income as a single individual would be $83,500.Raj's 2017 taxable income as a single individual would be $118,000.When they marry before the end of 2017,how much of a marriage penalty will they incur?

Accepted Answer

A) $0 
B) $388 
C) $669 
D) None of the above

Exam 14: The Individual Tax Formula

Only natural and adopted children or stepchildren can be a qualifying child for tax purposes.

Hunter,age 17,is claimed as a dependent on his parents' tax return.This year,Hunter earned $8,500 for appearing in a television commercial.Compute Hunter's standard deduction.

Ms.Kilo is an unmarried individual.She has $219,344 taxable income in 2017.Compute Ms.Kilo's regular tax liability if she files as a single taxpayer and if she files as a surviving spouse.

Mr.and Mrs.Stern reported $312,440 alternative minimum taxable income before any exemption on their 2017 Form 1040.Calculate their AMT exemption.

Based on the 2017 tax rates,an individual is indifferent between filing as a single taxpayer or a head of household if he has $9,325 or less of taxable income.

Mr.Thomas is age 69,has perfect vision,and files as a single taxpayer.His standard deduction for 2017 is $7,900.

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

Mr.and Mrs.Eller's AGI last year was $287,300,and their total tax was $70,268.The couple's safe-harbor estimate of current year tax is $77,295.

Mr.and Mrs.Kline file a joint return on which they claim the standard deduction and two exemptions.If the taxable income on their return is $55,300,they are not paying a marriage penalty.

Mr.and Mrs.Reece couldn't complete their 2017 Form 1040 before April 15,2018.They estimate that they will have a $700 balance of tax due with the return.Which of the following statement is true?

Mr.and Mrs.Queen provide 90% of the financial support for Mrs.Queen's mother,Doreen,who lives in the couples' home.Doreen's only income this year is a $7,500 taxable pension from her former employer.Mr.and Mrs.Queen can't claim Doreen as a dependent this year.

An individual must pay the greater of her regular income tax or her alternative minimum tax (AMT)for the year.

Mr.Lenz died on May 4,2017.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 2018.

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.Luang reported $517,900 ordinary taxable income for regular tax purposes and had $39,100 positive AMT adjustments and preferences.Compute their tentative minimum tax.

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

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

Benjamin,who files as a single taxpayer,has $359,900 taxable income in 2017.Compute his regular tax liability.

Linda and Raj are engaged to be married.Linda's 2017 taxable income as a single individual would be $83,500.Raj's 2017 taxable income as a single individual would be $118,000.When they marry before the end of 2017,how much of a marriage penalty will they incur?