Question 1

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $2,000 from babysitting and $1,280 interest income from a savings account.Compute Melissa's standard deduction.

Accepted Answer

As a dependent, Melissa can only claim the standard deduction of $1,050 plus her earned income of $2,000, which equals $3,050. However, since Melissa's interest income is more than $350, she must reduce her standard deduction by the excess interest income ($1,280 - $350 = $930). Therefore, Melissa's standard deduction is $3,050 - $930 = $2,120, which is closest to choice B.

Question 2

Tamara and Todd Goble,ages 66 and 60,file a joint return.Todd is legally blind.Compute their standard deduction.

Accepted Answer

The standard deduction for a married couple filing jointly in 2023 is $27,700. Since Todd is legally blind, they are eligible for an additional $1,500 deduction, making their total standard deduction $27,000.

Question 3

Julie,an unmarried individual,lives in a home with her 13-year-old dependent son,Oscar.This year,Julie had the following tax information: Standard Deduction Table.  Compute Julie's adjusted gross income (AGI)and taxable income.

Accepted Answer

The answer of Julie,an unmarried individual,lives in a home with...

Question 4

Hunter,age 17,is considered a dependent of his parents for tax purposes.This year,Hunter earned $16,000 for appearing in a television commercial.Compute Hunter's standard deduction.

Accepted Answer

The answer of Hunter,age 17,is considered a dependent of his...

Question 5

Mr.and Mrs.Jelk file a joint return.They provide 65% of the financial support for David,the 14-year old son of a friend who died three years ago.David lives in the home of his aunt Sarah,who provides 35% of his financial support.Which of the following statements is true?

Accepted Answer

David is neither a qualifying child nor a qualifying relative of the Jelks because he does not meet the relationship test for a qualifying child, and the Jelks do not provide more than half of his support for him to be a qualifying relative.

Question 6

Mr.and Mrs.Kay,ages 68 and 66,file a joint return.Mrs.Kay is legally blind.Compute their standard deduction.

Accepted Answer

The standard deduction for married couples filing jointly is $25,700. However, Mrs. Kay is legally blind, which entitles them to an additional $1,600 deduction. Therefore, their total standard deduction is $25,700 + $1,600 = $27,300.

Question 7

Mr.and Mrs.Upton's marginal tax rate on their joint return is 32%.This year,their itemized deductions totaled $25,200,and their standard deduction (MFJ)was $24,400.Compute their incremental tax savings from their itemized deductions.

Accepted Answer

The incremental tax savings is the difference between the itemized deductions and the standard deduction, multiplied by the marginal tax rate: ($25,200 - $24,400) * 32% = $256.

Question 8

Mr.and Mrs.Steel,who file a joint return,have $513,200 taxable income in 2019.Compute their regular tax liability.

Accepted Answer

For 2019, the tax brackets for married couples filing jointly are: 10% on income up to $19,400; 12% on income over $19,400 up to $78,950; 22% on income over $78,950 up to $168,400; 24% on income over $168,400 up to $321,450; 32% on income over $321,450 up to $408,200; 35% on income over $408,200 up to $612,350; and 37% on income over $612,350. Calculating the tax for each bracket and summing them gives a total tax liability of $130,007.

Question 9

Ms.Lewis maintains a household which is the principal place of residence for Kathy.Ms.Lewis provides more than 50% of Kathy's financial support.In which of the following cases can Ms.Lewis claim Kathy as a qualifying child?

Accepted Answer

Kathy can be claimed as a qualifying child if she is Ms. Lewis' niece, under the age of 19, and Ms. Lewis provides more than half of her support.

Question 10

Mr.and Mrs.Liddy,ages 39 and 41,file a joint return and have no dependents for the year.Here is their relevant information: Standard Deduction Table.  Compute their adjusted gross income (AGI)and taxable income.

Accepted Answer

The answer of Mr.and Mrs.Liddy,ages 39 and 41,file a joint...

Question 11

Mr.and Mrs.Dell,ages 29 and 26,file a joint return and have no dependents for the year.Here is their relevant information: Standard Deduction Table.  Compute their adjusted gross income (AGI)and taxable income.

Accepted Answer

The answer of Mr.and Mrs.Dell,ages 29 and 26,file a joint...

Question 12

Which of the following statements describing individual tax deductions is false?

Accepted Answer

According to the IRS, approximately 70% of individual taxpayers take the standard deduction rather than itemizing their deductions. Therefore, statement B is false.

Question 13

Which of the following statements regarding the calculation of taxable income is false?

Accepted Answer

Taxpayers are only allowed to deduct either itemized deductions or above-the-line deductions, not both.

Question 14

Which of the following statements regarding a qualifying child is false?

Accepted Answer

The statement that the child must have been alive at least 180 days during the tax year is false. The IRS does not specify a minimum number of days a child must be alive to qualify; rather, the child must simply meet the relationship, age, residency, support, and joint return tests as applicable.

Question 15

Which of the following statements describing individual tax deductions is false?

Accepted Answer

Self-employment tax deduction is an above-the-line deduction, not an itemized deduction. This means it can be taken regardless of whether an individual itemizes or takes the standard deduction, and it directly reduces adjusted gross income.

Question 16

Meraleigh,age 16,is claimed as a dependent on her parents' tax return.This year,Meraleigh earned $510 from babysitting and $220 interest income from a savings account.Compute Meraleigh's standard deduction.

Accepted Answer

For a dependent, the standard deduction in 2023 is the greater of $1,100 or earned income plus $350, not to exceed the standard deduction for an individual, which is $12,950. Meraleigh's earned income is $510 (from babysitting), so her standard deduction is $1,100, which is the greater of $1,100 or her earned income ($510) plus $350 ($860).

Question 17

Jennifer and Jamar are married and live in a home with their 13-year-old dependent son,Oscar.This year,they had the following tax information.  Compute adjusted gross income (AGI)and taxable income.

Accepted Answer

The answer of Jennifer and Jamar are married and live...

Question 18

Which of the following statements is false?

Accepted Answer

The answer of Which of the following statements is false?
...

Question 19

Mr.and Mrs.Anderson file a joint return.They provide more than 50% of the financial support of their two children,Dana,age 26,and John,age 17.Both children live in the Andersons' home.Dana earned $7,100 from a part-time job,while John earned no income this year.Which of the following statements is true?

Accepted Answer

John is a qualifying child because he is under 19, lives with the Andersons, and they provide more than half of his support. Dana is not a qualifying child due to her age and income.

Question 20

In determining the standard deduction,which of the following statements is true?

Accepted Answer

The standard deduction varies based on the taxpayer's filing status, such as single, married filing jointly, or head of household, among others. This affects the amount of the standard deduction.

Quiz 14: The Individual Tax Formula

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $2,000 from babysitting and $1,280 interest income from a savings account.Compute Melissa's standard deduction.

Tamara and Todd Goble,ages 66 and 60,file a joint return.Todd is legally blind.Compute their standard deduction.

Julie,an unmarried individual,lives in a home with her 13-year-old dependent son,Oscar.This year,Julie had the following tax information: Standard Deduction Table. Compute Julie's adjusted gross income (AGI) and taxable income.

Hunter,age 17,is considered a dependent of his parents for tax purposes.This year,Hunter earned $16,000 for appearing in a television commercial.Compute Hunter's standard deduction.

Mr.and Mrs.Jelk file a joint return.They provide 65% of the financial support for David,the 14-year old son of a friend who died three years ago.David lives in the home of his aunt Sarah,who provides 35% of his financial support.Which of the following statements is true?

Mr.and Mrs.Kay,ages 68 and 66,file a joint return.Mrs.Kay is legally blind.Compute their standard deduction.

Mr.and Mrs.Upton's marginal tax rate on their joint return is 32%.This year,their itemized deductions totaled $25,200,and their standard deduction (MFJ) was $24,400.Compute their incremental tax savings from their itemized deductions.

Mr.and Mrs.Steel,who file a joint return,have $513,200 taxable income in 2019.Compute their regular tax liability.

Ms.Lewis maintains a household which is the principal place of residence for Kathy.Ms.Lewis provides more than 50% of Kathy's financial support.In which of the following cases can Ms.Lewis claim Kathy as a qualifying child?

Mr.and Mrs.Liddy,ages 39 and 41,file a joint return and have no dependents for the year.Here is their relevant information: Standard Deduction Table. Compute their adjusted gross income (AGI) and taxable income.

Mr.and Mrs.Dell,ages 29 and 26,file a joint return and have no dependents for the year.Here is their relevant information: Standard Deduction Table. Compute their adjusted gross income (AGI) and taxable income.

Which of the following statements describing individual tax deductions is false?

Which of the following statements regarding the calculation of taxable income is false?

Which of the following statements regarding a qualifying child is false?

Which of the following statements describing individual tax deductions is false?

Meraleigh,age 16,is claimed as a dependent on her parents' tax return.This year,Meraleigh earned $510 from babysitting and $220 interest income from a savings account.Compute Meraleigh's standard deduction.

Jennifer and Jamar are married and live in a home with their 13-year-old dependent son,Oscar.This year,they had the following tax information. Compute adjusted gross income (AGI) and taxable income.

Which of the following statements is false?

In determining the standard deduction,which of the following statements is true?