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

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Question 41

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All of the following are for AGI deductions except:

A) Moving expenses.
B) Rental and royalty expenses.
C) Business expenses for a self-employed taxpayer.
D) Charitable contributions.

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

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Question 42

Multiple Choice

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In order to be a qualifying relative of another,an individual's gross income must be less than ________.

A) the applicable standard deduction amount
B) the personal and dependency exemption amount
C) one-half of the individual's support
D) None of the choices are correct.

E) All of the above
F) None of the above

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Question 43

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An individual may never be considered as both a qualifying relative and a qualifying child of the same taxpayer.

The Dashwoods have calculated their taxable income to be $80,000 for 2017,which includes $2,000 of long-term capital gains.Using the appropriate tax rate schedule in the text,calculate the Dashwood's income tax liability assuming they are married and file a joint return.

For AGI deductions are commonly referred to as deductions "above the line."

Which of the following statements regarding tax deductions is false?

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

It is generally more advantageous from a nontax perspective for a married couple to file separately than it is for them to file jointly.

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.

Madison's gross tax liability is $9,000.Madison had $3,000 of tax credits available and she had $8,000 of taxes withheld by her employer.What is Madison's taxes due (or taxes refunded) with her tax return?

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.

Filing status determines all of the following except ________

Which of the following relationships does NOT pass the relationship test for a qualifying child?

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)?

In 2017,Brittany,who is single,cares for her father Raymond.Brittany pays the bills relating to Raymond's home.She also buys groceries and provides the rest of his support.Raymond has no gross income.Brittany received $45,000 of salary from her employer during the year.Brittany reports $3,000 of itemized deductions.What is Brittany's taxable income?

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?

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.

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

Which of the following series of inequalities is generally most accurate?

Jane and Ed Rochester are married with a two-year-old child who lives with them and whom they support financially.In 2017,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 2017 standard deduction amount for MFJ taxpayers is $12,700 and the 2017 exemption amount is $4,050. What are the couple's taxes due or tax refund (use the tax rate schedules in the text,not tax tables)?