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

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Question 21

True/False

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Jeremy and Annie are married.During the year Jeremy dies.When Annie files her tax return for the year in which her husband dies,she may file under the married filing jointly filing status even if she does not remarry.

A) True
B) False

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Question 22

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Anna is a 21-year-old full-time college student (she plans on returning home at the end of the school year) .Her total support for the year was $34,000 (including $8,000 of tuition) .Anna covered $12,000 of her support costs out of her own pocket (from savings,she did not work) and she received an $8,000 scholarship that covered all of her tuition costs.Which of the following statements regarding who is allowed to claim Anna as an exemption is true?

A) Even if Anna's parents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000) ,they would not be able to claim her as a dependent.
B) Even if Anna's grandparents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000) ,they would not be able to claim her as a dependent.
C) Because she provided more than half her own support,Anna would not qualify as her parents' dependent.
D) None of these statements are true.

E) B) and D)
F) C) and D)

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Question 23

Multiple Choice

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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?

Jane and Ed Rochester are married with a 2-year-old child,who lives with them and whom they support financially.In 2019,Ed and Jane realized the following items of income and expense: They also qualified for a $2,000 child tax credit.Their employers withheld $5,800 in federal income taxes from their paychecks (in the aggregate).Finally,the 2019 standard deduction amount for MFJ taxpayers is $24,400. What are the couple's taxes due or tax refund? (Use the tax rate schedules,not tax tables.)

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.

Taxpayers who file as qualifying widows/widowers use a different tax rate schedule than taxpayers who are married filing jointly for tax purposes.

A taxpayer may qualify for the head of household filing status if she has no dependent children but pays more than half of the cost of maintaining a separate household for her dependent mother and/or father.

In Year 1,Harold Weston's wife died.Since her death,he has maintained a household for their son,Frank (age 3) ,his qualifying child.Which is the most advantageous filing status available to Harold in Year 4?

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

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 are Jamison's taxes due (or taxes refunded) with his tax return?

All of the following represent a type or character of income except:

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 percent of her own support,Michael provides 40 percent of Janet's support,Diane provides 8 percent of Janet's support,Karen provides 10 percent of Janet's support,and Kenny provides the remaining 32 percent of Janet's support.Under a multiple support agreement,who is eligible to claim Janet as a dependent as a qualifying relative?

Tax credits are generally more valuable than tax deductions because tax credits reduce a taxpayer's gross tax liability dollar for dollar while tax deductions do not.

Jennifer and Stephan are married at year-end and they file separate tax returns.If Jennifer itemizes deductions on her return,Stephan must also itemize deductions on his return even if his itemized deductions don't exceed his standard deduction.

The Tanakas filed jointly in 2019.Their AGI is $120,000.They reported $10,000 of qualified business income and $26,000 of itemized deductions.They also have two dependent qualifying children.The 2019 standard deduction amount for MFJ taxpayers is $24,400.What is the total amount of from AGI deductions they are allowed to claim on their 2019 tax return?

Which of the following statements regarding exclusions and/or deferrals is false?

Which of the following is NOT a from AGI deduction?

Joanna received $60,000 compensation from her employer,the value of her stock in ABC company appreciated by $5,000 during the year (but she did not sell any of the stock) ,and she received $30,000 of life insurance proceeds from the death of her husband.What is the amount of Joanna's gross income from these items?

The character of income is a factor in determining the rate at which the income is taxed.

To be considered a qualifying child of a taxpayer,the individual must be the son or daughter of the taxpayer.