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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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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.

A) True
B) False

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Question 22

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

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Question 23

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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 Year 1, the Bennetts' 25-year-old daughter, Jane, is a full-time student at an out-of-state university but she plans to return home after the school year ends.In previous years, Jane has never worked and her parents have always been able to claim her as a dependent.In Year 1, a kind neighbor offers to pay for all of Jane's educational and living expenses.Which of the following statements is most accurate regarding whether Jane's parents would be allowed to claim Jane as a dependent for Year 1, assuming the neighbor pays for all of Jane's support?

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?

In June of Year 1, Jake's wife, Darla, died.The couple did not have any children and Jake did not remarry in Year 1 or Year 2.Which is the most favorable filing status for Jake in Year 2?

Which of the following statements regarding dependents is false?

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?

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

Sullivan's wife, Susan, died four years ago.Sullivan has not remarried and he maintains a home for his dependent child, Sammy.In 2019, Sullivan received $70,000 of salary from his employer and $3,000 of qualified business income from a business investment, and he paid $10,000 of itemized deductions.What is Sullivan's taxable income for 2019?

A personal automobile is a capital asset.

Jasmine and her husband, Arty, have been married for 25 years.In May of this year, the couple divorced.During the year, Jasmine provided all the support for herself and her 22-year-old child, Dexter, who lived in the same home as Jasmine for the entire year.Dexter is employed full time, earning $29,000 this year.What is Jasmine's most favorable filing status for the year?

Doug and Lisa have determined that their tax liability on their joint return is $3,700.They have made prepayments of $1,000 and also are entitled to a $2,000 child tax credit.What is the amount of their tax refund or taxes due?

Hannah, who is single, received a qualified dividend of $1,000.Hannah's marginal ordinary income tax rate is 32 percent.What amount of tax must she pay on the $1,000 dividend?

If an unmarried taxpayer is eligible to claim another as a dependent, the taxpayer is automatically eligible for the head of household filing status.

Filing status determines all of the following except ________.

Greg is single.During 2019, he received $60,000 of salary from his employer.That was his only source of income.He reported $3,000 of for AGI deductions and $9,000 of itemized deductions.The 2019 standard deduction amount for a single taxpayer is $12,200.What is Greg's taxable income?

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

Taxpayers are allowed to deduct a specific amount for each of their dependents.

The only from AGI deductions are the standard deduction and itemized deductions.