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

In January 2012,Jake's wife dies and he does not remarry.For tax year 2012,Jake may not be able to use the filing status available to married persons filing joint returns.

Accepted Answer

If Jake's wife passed away during the tax year, he may only use the filing status of married filing jointly for the year of her death. For subsequent years, he would need to use the filing status of either single or qualifying widow(er) with dependent child, if he meets the eligibility requirements.

Question 3

Katelyn is divorced and maintains a household in which she and her daughter,Crissa,live.Crissa,age 22,earns $11,000 during 2012 as a model.Katelyn does qualify for head of household filing status.

Accepted Answer

The answer of Katelyn is divorced and maintains a household...

Question 4

Darren,age 20 and not disabled,earns $4,000 during 2012.Darren's parents cannot claim him as a dependent unless he is a full-time student.

Accepted Answer

According to the IRS rules, parents can claim their child as a dependent if the child is under 19 years old or a full-time student under 24 years old and has not provided more than half of their own support during the year. Since Darren is not a full-time student and is over 19 years old, his parents cannot claim him as a dependent.

Question 5

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 6

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 the IRS rules, a dependent doesn't have to be a U.S. citizen, but they must either be a U.S. national or a resident alien that is a citizen of Canada or Mexico or a resident of one of the countries that has a tax treaty with the U.S. Since Kim's parents are residents of Canada, he can claim them as dependents, provided they meet the other qualifying rules for dependents.

Question 7

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 8

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.

Question 9

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 10

Keith,age 17 and single,earns $3,000 during 2012.Keith's parents cannot claim him as a dependent even if he does not live with them.

Accepted Answer

The answer of Keith,age 17 and single,earns $3,000 during 2012.Keith's...

Question 11

An individual taxpayer uses a fiscal year March 1-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 an individual taxpayer's Federal income tax return is April 15 of each tax year, unless it falls on a weekend or holiday, in which case it is moved to the next business day.

Question 12

For dependents who have income,special filing requirements apply.

Accepted Answer

Dependent with income have to file their taxes using Form 1040 or 1040-SR, and may have to pay taxes on their income. They may also have to file state taxes depending on their state's requirements. Therefore, special filing requirements apply for dependents with income.

Question 13

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

Once a joint return is filed, the taxpayers cannot later switch to separate returns for that year.

Question 14

Married taxpayers who file separately cannot later change to a joint return.

Accepted Answer

The answer of Married taxpayers who file separately cannot later...

Question 15

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

Accepted Answer

This statement is true. Only taxpayers who do not itemize their deductions can use Form 1040EZ or Form 1040A. Those who itemize their deductions must use Form 1040.

Question 16

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 17

Since an abandoned spouse is treated as single and has one or more dependent children,he or she qualifies for the standard deduction available to head of household.

Accepted Answer

This statement is true. An abandoned spouse with one or more dependent children can qualify for the standard deduction available to head of household.

Question 18

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 rules and rates compared to single taxpayers.

Question 19

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 20

Stealth taxes are directed at higher income taxpayers.

Accepted Answer

Stealth taxes are typically designed to impact higher income taxpayers by targeting specific goods or services that they are more likely to consume, such as luxury items or high-end properties. These taxes may be less visible or easily noticeable than other types of taxes, hence the term "stealth."

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