Question 1

Ed is divorced and maintains a home in which he and a dependent friend live. Ed does not qualify for head of household filing status.

Accepted Answer

In order to qualify for head of household filing status, the taxpayer must be unmarried and provide more than half of the cost of maintaining a home for a qualifying person, such as a dependent child or relative. Since Ed is divorced and does not have a dependent child, he cannot qualify for head of household status.

Question 2

Surviving spouse filing status begins in the year in which the deceased spouse died.

Accepted Answer

Surviving spouse filing status, also known as "qualifying widow(er) with dependent child" status, can be used for two years following the year of the spouse's death, provided the surviving spouse does not remarry and maintains a home for a dependent child.

Question 3

An individual taxpayer uses a fiscal year of March 1 to February 28. The due date of this taxpayer's Federal income tax return is May 15 of each tax year.

Accepted Answer

The due date for individual taxpayers using a fiscal year of March 1 to February 28 is actually June 15 of each tax year, with an automatic extension to September 15 if requested.

Question 4

Married taxpayers who file a joint return cannot later (i.e., after the filing due date) switch to separate returns for that year.

Accepted Answer

Married taxpayers who file a joint return are generally bound by that decision and cannot switch to separate returns after the filing due date.

Question 5

Since an abandoned spouse is treated as not married and has one or more dependent children, he or she qualifies for the standard deduction available to head of household.

Accepted Answer

This is true according to the IRS guidelines. An abandoned spouse can claim the standard deduction available to head of household if they have one or more dependent children.

Question 6

Darren, age 20 and not disabled, earns $4,100 during 2017. Darren's parents cannot claim him as a dependent unless he is a full-time student.

Accepted Answer

Darren's income exceeds the IRS threshold for a qualifying child who is not a full-time student or disabled, so his parents cannot claim him as a dependent unless he is a full-time student.

Question 7

For dependents who have income, special filing requirements apply.

Accepted Answer

Dependents who have income may be required to file their own tax return, even if they are claimed as a dependent on someone else's tax return. The filing requirements depend on the type and amount of income.

Question 8

In terms of timing as to any one year, the Tax Tables are available before the Tax Rate Schedules.

Accepted Answer

The answer of In terms of timing as to any...

Question 9

In terms of income tax consequences, abandoned spouses are treated the same way as married persons filing separate returns.

Accepted Answer

Abandoned spouses can be treated as unmarried for tax purposes and may qualify to use the head of household filing status, which often offers more favorable tax rates and benefits than filing as married filing separately.

Question 10

Lucas, age 17 and single, earns $6,000 during 2017. Lucas's parents cannot claim him as a dependent if he does not live with them.

Accepted Answer

According to the IRS rules, if a child is 17 and earns more than $4,050 in 2017, the parents cannot claim him as a dependent unless he lives with them for more than half of the year. Since Lucas's parents cannot claim him as a dependent, it implies that he does not live with them.

Question 11

Married taxpayers who file separately cannot later (i.e., after the due date for filing) change to a joint return.

Accepted Answer

Married taxpayers who file separately have the option to amend their tax returns to file jointly within 3 years from the due date of the original return (excluding extensions).

Question 12

Sarah furnishes more than 50% of the support of her son and daughter-in-law who live with her. If the son and daughter-in-law file a joint return, Sarah cannot claim them as dependents.

Accepted Answer

The answer of Sarah furnishes more than 50% of the...

Question 13

A taxpayer who itemizes must use Form 1040, and cannot use Form 1040EZ or Form 1040A.

Accepted Answer

Taxpayers who itemize deductions are required to use Form 1040, while taxpayers who claim the standard deduction may use either Form 1040, 1040A or 1040EZ depending on their situation.

Question 14

Currently, the top income tax rate in effect is not the highest it has ever been.

Accepted Answer

Historically, the top income tax rates have been much higher than they are currently, with rates exceeding 90% in the 1950s.

Question 15

For tax purposes, married persons filing separate returns are treated the same as single taxpayers.

Accepted Answer

Married persons filing separate returns have different tax brackets and limitations compared to single taxpayers. Therefore, they are not treated the same for tax purposes.

Question 16

Kim, a resident of Oregon, supports his parents who are residents of Canada but citizens of Korea. Kim can claim his parents as dependents.

Accepted Answer

According to IRS rules, a taxpayer can claim a parent as a dependent as long as the parent is a resident of the United States, Canada or Mexico, or a U.S. national. Since Kim's parents are residents of Canada, he can claim them as dependents.

Question 17

Stealth taxes are directed at lower income taxpayers.

Accepted Answer

Stealth taxes are not specifically directed at lower income taxpayers; they are taxes that are implemented in a way that is not immediately obvious, affecting a broad range of taxpayers.

Question 18

In January 2017, Jake's wife dies and he does not remarry. For tax year 2017, Jake may not be able to use the filing status available to married persons filing joint returns.

Accepted Answer

Jake's marital status changed to single after his wife's death, so he cannot file a joint return as a married person. He may be eligible to file as a qualifying widower (if he has a dependent child) or as a single taxpayer.

Question 19

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live. Crissa, age 22, earns $11,000 during 2017 as a model. Katelyn does not qualify for head of household filing status.

Accepted Answer

Katelyn cannot file as head of household because her daughter, Crissa, is over the age of 18 and did not qualify as a dependent. Therefore, Katelyn must file as single.

Question 20

In determining the filing requirement based on gross income received, both additional standard deductions (i.e., age and blindness) are taken into account.

Accepted Answer

The filing requirement based on gross income does not take into account additional standard deductions for age or blindness; it is primarily determined by the gross income threshold, filing status, and age.

Quiz 3: Tax Formula and Tax Determination; an Overview of Property Transactions