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

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Question 41

Multiple Choice

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In April of year 1, Martin left his wife Marianne. While the couple was apart, they were not legally divorced. Marianne found herself having to financially provide for the couple's only child (who qualifies as Marianne's dependent) and to pay all the costs of maintaining the household. When Marianne filed her tax return for year 1, she filed a return separate from Martin. What is Marianne's most favorable filing status for year 1?

A) Married filing separately.
B) Single.
C) Head of household.
D) Qualifying widow.

E) A) and D)
F) All of the above

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Question 42

Multiple Choice

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

A) The taxpayer claims a dependency exemption for a child.
B) The taxpayer pays more than half the costs of maintaining his or her home for the entire year and the home is the principal residence for a dependent qualifying child for more than half the year.
C) The taxpayer files a tax return separate from the other spouse.
D) The spouse does not live in the taxpayer's home at all during the year.

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

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Question 43

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Katy has one child, Dustin, who is 18 years old at the end of the year. Dustin lived at home for three months during the year before leaving home to work full-time in another city. During the year, Dustin earned $15,000. Katy provided more than half of Dustin's support for the year. Which of the following statements regarding whether Katy may claim Dustin as a dependent for the current year is accurate?

Which of the following types of income are not considered ordinary income?

The income tax base for an individual tax return is:

To determine filing status, a taxpayer's marital status is determined on January 1 of the tax year in question.

All of the following are tests for determining qualifying relative status except ______.

Which of the following statements is true:

The Tanakas filed jointly in 2014. Their AGI is $120,000. They reported $10,000 of itemized deductions and they have two dependent children. The 2014 standard deduction amount is $12,400 and each exemption is $3,950. What is the total amount of from AGI deductions they are allowed to claim on their 2014 tax return?

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.

What is the couple'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 Dashwoods have calculated their taxable income to be $80,000 for 2014, 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.

All of the following are tests for determining qualifying child status except the ______.

In certain circumstances, a taxpayer who provides less than half the support of another may still be able to claim a dependency exemption for that person as a qualifying relative.

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.

Which of the following statements regarding the difference between the requirements for a qualifying child and the requirements for a qualifying relative is false?

When determining whether a child meets the qualifying child support test for the parents, scholarships earned by the child do not count as self support provided by the child.

Hannah, who is single, received a qualified dividend of $1,000. Hannah's marginal ordinary income tax rate is 28%. What amount of tax must she pay on the $1,000 dividend?

Tom Suzuki's tax liability for the year is $2,450. He had $2,050 of federal income taxes withheld from his paycheck during the year by his employer and has $2,000 in tax credits. What are Tom's taxes due or tax refund for the year?