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

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Question 21

Multiple Choice

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Which of the following is not a filing status?

A) Head of household.
B) Unmarried.
C) Qualifying widow or widower.
D) Married filing jointly.

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

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Question 22

Multiple Choice

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Mason and his wife, Madison, have been married for five years. Jaxon, who is 18 years old and unrelated to Mason and Madison, has been living with Mason and Madison for the last two years. In May of Year 1, Mason and Madison divorced. Mason and Jaxon stayed in the home and Madison moved out. During Year 2, Mason provided all of Jaxon's support, and Jaxon lived in the home for all of Year 2. Jaxon did not earn any income during Year 2. What is Mason's most favorable filing status for Year 2?

A) Single.
B) Married filing separately.
C) Surviving spouse.
D) Head of household.

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

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Question 23

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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?

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?

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.

Qualified dividends are taxed at the same rate as ordinary income.

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.

In April of Year 1, Martin left his wife, Marianne. The couple has two children under the age of 15. While the couple was apart, they were not legally divorced. Marianne remained in the home and paid all the costs of maintaining the home for the remainder of the year. Assuming the couple does not file jointly, which of the following statements regarding filing status is true?

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

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 is the couple's gross income?

Sheri and Jake Woodhouse have one daughter, Emma, who is 16 years old. They also have taken in Emma's friend, Harriet, who has lived with them since February of the current year and is also 16 years of age. The Woodhouses have not legally adopted Harriet but Emma often refers to Harriet as her "sister." The Woodhouses provide all of the support for both girls, and both girls live at the Woodhouse residence. Which of the following statements is true regarding whom Sheri and Jake may claim as dependents for the current year?

An individual receiving $5,000 of tax-exempt income during the year could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

Which of the following statements regarding realized income is true?

Lebron received $50,000 of compensation from his employer and he received $400 of interest from a municipal bond. What is the amount of Lebron's gross income from these items?

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 are Madison's taxes due (or taxes refunded) with her tax return?

Anna is a qualifying child of her parents. However, she was recently married. Anna and her husband filed a joint return. If they had filed separately, Anna would have owed no taxes, though her husband would have owed just $5. Because Anna herself owed no taxes, her parents can still claim her as a dependent.

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

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.

In June of Year 1, Edgar's wife, Cathy, died, and Edgar did not remarry during the year. What is his filing status for Year 1 (assuming they did not have any dependents) ?

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