Question 1

Sally divorced her husband three years ago and has not remarried. Since the divorce she has maintained her home in which she and her now sixteen-year-old daughter reside. The daughter is a qualified child. Sally signed the dependency exemption over to her ex-spouse by filing the appropriate IRS form. What is Sally's filing status for the current year and how many exemptions may she claim?

Accepted Answer

Sally can file as head of household since she has a qualifying dependent (her daughter) who lives with her for more than half of the year and she pays more than half of the household expenses. She can claim one exemption for her daughter. Even though she signed over the dependency exemption to her ex-spouse, she can still claim the head of household filing status as long as she meets the requirements.

Question 2

Liz and Bert divorce and Liz receives custody of their child. Bert is ordered by the court to pay child support of $10,000 per year, and Liz files the appropriate IRS form to allow Bert to claim the dependency exemption for the child. If Liz maintains the home in which she and her child live, her filing status and exemptions claimed will be

Accepted Answer

Since Liz has custody of the child and maintains the home where they both live, she qualifies for the head of household filing status. She can also claim one exemption for herself. Bert has been allowed to claim the dependency exemption for the child, so Liz cannot claim this exemption. Therefore, Liz's filing status and exemptions claimed will be head of household and one exemption.

Question 3

In order to qualify to file as surviving spouse, all of the following criteria must be met by the widow or widower except

Accepted Answer

The answer of In order to qualify to file as...

Question 4

Elise, age 20, is a full-time college student with earned income from wages of $4,400 and interest income of $500. Elise's parents provide more than half of her support. Elise's 2016 taxable income is

Accepted Answer

The answer of Elise, age 20, is a full-time college...

Question 5

Carter dies on January 1, 2016. A joint return election is made in 2016 and Marjorie properly qualifies as a surviving spouse for the two following years. Marjorie has one child that she claims as a dependent for this same period. The number of personal and dependency exemptions allowed Marjorie in 2016 and in 2017, respectively:

Accepted Answer

In 2016, Marjorie is allowed one personal exemption for herself and one dependency exemption for her child, for a total of 2 exemptions. Since she qualifies as a surviving spouse for the year of Carter's death, she is also allowed an additional exemption for him, bringing the total to 3.

In 2017 and onwards, Marjorie is no longer eligible for the exemption for Carter as a surviving spouse. She is still allowed one personal exemption for herself and one dependency exemption for her child, for a total of 2 exemptions.

Question 6

To qualify as an abandoned spouse, the taxpayer is not required to

Accepted Answer

The answer of To qualify as an abandoned spouse, the...

Question 7

In October 2016, Joy and Paul separated and have not lived with each other since, but they are still legally married. They do not file a joint return. Joy supports their children after the separation and pays the cost of maintaining their home. Joy's filing status in 2016 and 2017 is, respectively,

Accepted Answer

Joy qualifies to file as married filing separately since she is still legally married to Paul but they are not living together. However, she also qualifies for head of household status since she is paying for more than half the cost of maintaining their home and is the sole provider for their children. Therefore, she can file as married filing separately in both 2016 and 2017, but also claim head of household status in 2017.

Question 8

Satish, age 11, is a dependent of his parents. His only source of income in 2016 is $3,000 of interest income on bonds given him by his grandparents. Satish's marginal rate is 10%, and his parent's marginal rate is 28%. Satish's tax is

Accepted Answer

The answer of Satish, age 11, is a dependent of...

Question 9

You may choose married filing jointly as your filing status if you are married and both you and your spouse agree to file a joint return. Which of the following facts would prevent you from being considered married for filing purposes?

Accepted Answer

The answer of You may choose married filing jointly as...

Question 10

Dave, age 59 and divorced, is the sole support of his mother age 83, who is a resident of a local nursing home for the entire year. Dave's mother had no income for the year. Dave's filing status and exemptions claimed are

Accepted Answer

Dave can claim his mother as a dependent since he provides more than half of her support and she has no income. This allows him to file as head of household and claim two exemptions (one for himself and one for his dependent mother).

Question 11

Tom and Alice were married on December 31 of last year. What is their filing status for last year?

Accepted Answer

Tom and Alice were married on December 31, which means they were considered married for tax purposes for the entire year. They can choose to file either married joint or married separate.

Question 12

Michelle, age 20, is a full-time college student with earned income from wages of $5,200 and interest income of $700. Michelle's parents provide more than half of Michelle's support. Michelle's 2016 taxable income is

Accepted Answer

The answer of Michelle, age 20, is a full-time college...

Question 13

The filing status in which the rates increase most rapidly is

Accepted Answer

C)The rates on the married filing a separate return schedule increases more rapidly than other individual rate schedules.

Question 14

Which of the following dependent relatives does not have to live in the same household as the taxpayer who is claiming head of household filing status?

Accepted Answer

The answer of Which of the following dependent relatives does...

Question 15

In 2013, Leo's wife died. Leo has two small children, ages 2 and 4, living at home whom he supports entirely. Leo does not remarry and is not claimed as a dependent on another's return during any of this period. In 2014, 2015, and 2016, Leo's most advantageous filing status is, respectively

Accepted Answer

Leo is considered a surviving spouse for two years following the year of his wife's death. Therefore, for 2014 and 2015, his most advantageous filing status is surviving spouse. In 2016, he can no longer use that status, so his best option is head of household since he has two qualifying dependents.

Question 16

When a spouse dies, the surviving spouse for the year of death

Accepted Answer

The surviving spouse may file a joint tax return for the year of death, even if the deceased spouse did not live the entire year. After that, the surviving spouse may file as a qualifying widow or widower for two years.

Question 17

Edward, a widower whose wife died in 2013, maintains a household for himself and his 10-year-old daughter. Edward's most favorable filing status for 2016 is

Accepted Answer

Edward can qualify as head of household if he meets the following requirements: 
1) He is unmarried or considered unmarried on the last day of the year. 
2) He paid more than half the cost of maintaining a home for himself and his child for more than half the year. 
As a widower, Edward can be considered unmarried for tax purposes and he also meets the cost of maintaining a home requirement, making him eligible for head of household filing status.

Question 18

Frank, age 17, received $4,000 of dividends and $1,500 from a part-time job. Frank is a dependent of his parents who are in the 28% percent bracket. Frank's 2016 taxable income is

Accepted Answer

The answer of Frank, age 17, received $4,000 of dividends...

Question 19

A married taxpayer may file as head of household under the abandoned spouse provisions if all of the following are met except

Accepted Answer

The statement "the taxpayer must have been married for at least two years" is incorrect. There is no requirement for a specific length of marriage in order to file as head of household under the abandoned spouse provisions. The other conditions listed (living apart for the last six months, being a U.S. citizen or resident, and paying over half of household costs for more than half of the year) are correct.

Question 20

The oldest age at which the "Kiddie Tax" could apply to a dependent child is

Accepted Answer

The answer of The oldest age at which the "Kiddie...

Quiz 17: Determination of Tax