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

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Question 51

True/False

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Taxpayers are allowed to deduct more for each personal exemption they claim than for each dependency exemption they claim.

A) True
B) False

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Question 52

Multiple Choice

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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) Married filing joint
B) Surviving spouse
C) Qualifying widower
D) Head of household

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

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Question 53

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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 the dependency exemptions (and the reason for the exemptions) Sheri and Jake may claim for the current year for these girls?

Taxpayers who file as qualifying widows/widowers are treated exactly the same for tax purposes in all respects as taxpayers who are married filing jointly for tax purposes.

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)?

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

If no one qualifies as the dependent of an unmarried taxpayer, the unmarried taxpayer may still be able to qualify for the head of household filing status.

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.

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

Taxpayers may prepay their tax liability through withholdings and through estimated tax payments.

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

Which of the following statements regarding exemptions is correct?

For purposes of the qualifying child residence test, a child's temporary absence from the taxpayer's home for attending school full-time is counted as though the child lived in the taxpayer's home during the absence.

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

What is the couple's adjusted gross income?

Which of the following statements regarding personal and dependency exemptions is true?

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

Which of the following is not an itemized deduction?

From AGI deductions are commonly referred to as deductions "below the line."

Filing status determines all of the following except ____________