Question 1

The exemption amount is subject to annual adjustment for inflation.

Accepted Answer

The exemption amount is subject to annual adjustment for inflation, which means it can increase slightly each year to account for changes in the cost of living.

Question 2

To qualify for head of household status,a taxpayer must maintain a household that is the principal place of abode of a qualifying person for more than half the year.

Accepted Answer

This statement is true. To qualify for head of household status, a taxpayer must meet certain criteria, including maintaining a household that is the principal place of abode of a qualifying person for over half the year.

Question 3

If a taxpayer's spouse dies during the tax year,the taxpayer must file as a qualifying widow(er).

Accepted Answer

A taxpayer can file as a qualifying widow(er) only if they have not remarried and they meet other specific requirements, including having a dependent child, for two years following the year of their spouse's death. For the year of death, they may file as married filing jointly or married filing separately.

Question 4

A taxpayer can be claimed as a dependent on another return and still he or she can claim a personal exemption on his or her tax return.

Accepted Answer

If a taxpayer is claimed as a dependent on someone else's return, they cannot claim a personal exemption on their own tax return. The person who claims them as a dependent receives the exemption.

Question 5

The federal individual income tax returns are the 1040ES,1040A and 1040.

Accepted Answer

The federal individual income tax return form is the 1040. The 1040A and 1040EZ were simplified versions used in the past but are no longer in use as of the 2018 tax year. The 1040ES is used for estimated tax payments, not for filing annual returns.

Question 6

A married taxpayer filing separately must show the name,address,and social security number of the spouse on the tax return.

Accepted Answer

The answer of A married taxpayer filing separately must show...

Question 7

Even if the total of the itemized deductions is lower than the standard deduction,a taxpayer should choose to itemize on his or her tax return.

Accepted Answer

This statement is false. A taxpayer should choose to itemize only if the total of the itemized deductions is higher than the standard deduction. Otherwise, it would be more beneficial to take the standard deduction.

Question 8

The standard deduction in 2017 for a married couple,under 65 and not blind,is $12,700.

Accepted Answer

According to the IRS, the standard deduction for a married couple filing jointly in 2017, both under 65 and not blind, was indeed $12,700.

Question 9

The amount of tax liability for a taxpayer depends on many factors,including the filing status of the taxpayer.

Accepted Answer

The filing status of a taxpayer is one of the factors that affect their tax liability. Other factors include income level, deductions, and credits.

Question 10

The tax code defines adjusted gross income (AGI)as gross income minus a list of permitted deductions.

Accepted Answer

The definition of AGI is correct. It is the amount of income that remains after subtracting allowable deductions from gross income under the tax code.

Question 11

A qualifying child does not have to meet the support test in order to be claimed as a dependent.

Accepted Answer

The answer of A qualifying child does not have to...

Question 12

The tax tables stop at taxable income of $115,000.

Accepted Answer

Tax tables in the United States continue beyond $115,000, with brackets that accommodate higher levels of taxable income.

Question 13

A married couple in the process of obtaining a divorce cannot file a joint tax return.

Accepted Answer

A married couple can choose to file a joint tax return in the year they are getting divorced as long as they are still legally married on the last day of the tax year (December 31).

Question 14

The personal exemption for 2017 is $4,050.

Accepted Answer

According to the IRS, the personal exemption for 2017 was $4,050.

Question 15

A qualifying relative must be related to the taxpayer (as listed by the IRS),or be a member of the taxpayer's household for the entire year.

Accepted Answer

According to IRS rules, a qualifying relative must be related to the taxpayer or live with them in the same household for the entire year.

Question 16

A taxpayer who either is 65 or older or blind can claim an additional standard deduction.

Accepted Answer

This is true. For the tax year 2021, a taxpayer who is 65 or older or blind can claim an additional standard deduction of $1,350, or $1,700 if unmarried. This additional deduction is meant to account for the increased financial burden that may come with age or disability.

Question 17

A married couple can file a joint return only if both have earned income.

Accepted Answer

A married couple can file a joint return whether or not both have earned income. However, if only one spouse has earned income, they may still be able to file a joint return by reporting the non-working spouse's income as $0 or reporting their income from investments or other sources.

Question 18

In 2017,the additional standard deduction for a single taxpayer,who is 65 or older and not blind,is $1,200.

Accepted Answer

In 2017, the additional standard deduction for a single taxpayer who is 65 or older and not blind was $1,550, not $1,200.

Question 19

To be claimed as a dependent,a person must be a qualifying child or a qualifying relative.

Accepted Answer

This is true according to the IRS guidelines. To be claimed as a dependent, a person must either be a qualifying child or a qualifying relative.

Question 20

A taxpayer can qualify for head of household even though his or her parents are living in a separate household from that of the taxpayer (assume all other requirements are met).

Accepted Answer

The IRS allows a taxpayer to claim head of household status if they have a qualifying dependent, such as a parent, who lived with them for more than half of the year. It is not necessary for the parent to live in the same household as the taxpayer. Other requirements, such as providing more than half of the dependent's support, must also be met.

Quiz 2: Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts