Question 1

In 2015, 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 2016, 2017, and 2018, Leo's most advantageous filing status is, respectively

Accepted Answer

In 2016 and 2017, Leo qualifies as a surviving spouse because he has dependent children and his spouse died in 2015. In 2018, he no longer qualifies as a surviving spouse, so his most advantageous status is head of household.

Question 2

Suri, age 8, is a dependent of her parents and has unearned income of $6,000. She must file her own tax return.

Accepted Answer

The answer of Suri, age 8, is a dependent of...

Question 3

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 2018 taxable income is

Accepted Answer

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

Question 4

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

A father does not have to live in the same household as the taxpayer for the taxpayer to claim head of household filing status, as long as the taxpayer provides more than half of the father's support.

Question 5

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

Accepted Answer

The surviving spouse may file a married filing jointly return for the year of the spouse's death, regardless of when during the year the death occurred.

Question 6

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 requirement to have been married for at least two years is not part of the conditions for filing as head of household under the abandoned spouse provisions.

Question 7

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 daughter's dependent status over to her ex- spouse by filing the appropriate IRS form. What is Sally's filing status for the current year?

Accepted Answer

Sally qualifies as "head of household" because she is unmarried, has a qualifying child living with her, and maintains the home as the main residence for her daughter, despite signing over the dependent status to her ex-spouse.

Question 8

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 requirement is not that they must have shared the same household as of the date of death, but rather that they were eligible to file a joint return in the year of death.

Question 9

The filing status in which the rates increase most rapidly is

Accepted Answer

Married filing separately typically results in higher tax rates at lower income levels compared to other filing statuses, causing the rates to increase more rapidly.

Question 10

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

Accepted Answer

The "Kiddie Tax" applies to a dependent child under the age of 19, or under 24 if they are a full-time student.

Question 11

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 2018 taxable income is

Accepted Answer

Michelle's taxable income is calculated by subtracting the standard deduction for a dependent ($5,950 in 2018) from her total income ($5,900). Since her total income is less than the standard deduction, her taxable income is $350.

Question 12

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 is

Accepted Answer

Dave qualifies as head of household because he is unmarried and provides more than half the support for his mother, who is a qualifying relative.

Question 13

Tobe is a 22- year- old college student with $5,000 of interest income and $6,000 of earned income. Kiddie tax will apply to him if

Accepted Answer

The kiddie tax applies to full-time students under age 24 whose unearned income exceeds a certain threshold and who do not provide more than half of their own support.

Question 14

Edward, a widower whose wife died in 2015, maintains a household for himself and his 10- year- old daughter. Edward's most favorable filing status for 2018 is

Accepted Answer

Edward qualifies for the head of household status as he maintains a household for himself and his dependent daughter, which is more favorable than filing as single. The surviving spouse status is only available for two years following the year of the spouse's death, so it is not applicable in 2018.

Question 15

Satish, age 11, is a dependent of his parents. His only source of income in 2018 is $8,000 of interest income on bonds given him by his grandparents, resulting in taxable income of $6,950. Under kiddie tax rules, calculation of tax requires dividing taxable income between net unearned income and earned taxable income. Satish's taxable income will be divided as follows:

Accepted Answer

Under the kiddie tax rules, net unearned income is calculated by subtracting the standard deduction for dependents ($1,050 in 2018) from the total unearned income ($8,000), resulting in $6,950. However, the taxable income is $6,950, so the net unearned income is $5,900, and the earned taxable income is $1,050.

Question 16

In October 2018, 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 2018 and 2019 is, respectively

Accepted Answer

In 2018, Joy is still considered married because they are not legally divorced or separated under a decree of divorce or separate maintenance, so she would file as married filing separately. In 2019, since she supports the children and maintains the home, she qualifies as head of household.

Question 17

If a 13- year- old has earned income of $500 and interest and dividends of $2,500, all of the income can be reported on the parent's return.

Accepted Answer

The earned income of $500 can be reported on the parent's return, but the interest and dividends of $2,500 must be reported on a separate tax return for the child, called a "Kiddie Tax" return.

Question 18

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

If your divorce became final in December, you are considered unmarried for the entire year for tax purposes, preventing you from filing as married filing jointly.

Question 19

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

Accepted Answer

For tax purposes, if a couple is married on the last day of the year, they are considered married for the entire year and can choose to file as married filing jointly or married filing separately.

Question 20

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

Accepted Answer

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

Quiz 16: Tax Deductions and Travel Expenses for Employees and Self-Employed Individuals