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Exam 4: Individual Income Tax Overview, Dependents, and Filing Status

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Question 31

Multiple Choice

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Which of the following shows the correct relationship among standard deduction amounts for the respective filing statuses?

A) Single > Head of Household > Married Filing Jointly
B) Married Filing Jointly > Married Filing Separately > Head of Household
C) Married Filing Jointly > Head of Household > Single
D) Head of Household > Married Filing Separately > Married Filing Jointly

E) A) and D)
F) None of the above

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Question 32

Multiple Choice

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In April of Year 1, Martin left his wife, Marianne. The couple has two children under the age of 15. While the couple was apart, they were not legally divorced. Marianne remained in the home and paid all the costs of maintaining the home for the remainder of the year. Assuming the couple does not file jointly, which of the following statements regarding filing status is true?

A) No matter the post-separation residence(s) of the children, both spouses must file as married filing separately.
B) No matter the post-separation residence(s) of the children, Martin must file as married filing separately but Marianne may qualify to file as head of household.
C) No matter the post-separation residence(s) of the children, Marianne must file as married filing separately but Martin may qualify to file as head of household.
D) Depending on the post-separation residence(s) of the children, both spouses may qualify to file as head of household.

E) A) and B)
F) All of the above

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Question 33

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Jeremy and Annie are married. During the year Jeremy dies. When Annie files her tax return for the year in which her husband dies, she may file under the married filing jointly filing status even if she does not remarry.

Sally received $78,900 of compensation from her employer and she received $543 of interest from a corporate bond. What is the amount of Sally's gross income from these items?

Kelsey and Austin file a joint return. Kelsey works and receives income during the year but Austin does not. If the couple files a joint tax return, Austin is responsible for paying any taxes due if Kelsey is unable to pay the taxes.

Doug and Lisa have determined that their tax liability on their joint return is $3,700. They have made prepayments of $1,000 and also are entitled to a $2,000 child tax credit and $2,900 of recovery rebate credit. Assume they did not receive the recovery rebate in advance. What is the amount of their tax refund or taxes due?

An individual receiving $6,000 of tax-exempt income during the year could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

It is generally more advantageous for liability protection purposes for a married couple to file separately than it is for them to file jointly.

An individual with gross income of $6,000 could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

Jamison's gross tax liability is $9,750. Jamison had $2,200 of available credits and he had $5,800 of taxes withheld by his employer. What are Jamison's taxes due (or taxes refunded) with his tax return?

The relationship requirement for qualifying relative includes cousins.

Anna is a qualifying child of her parents. However, she was recently married. Anna and her husband filed a joint return. If they had filed separately, Anna would have owed no taxes, though her husband would have owed just $5. Because Anna herself owed no taxes, her parents can still claim her as a dependent.

Jane and Ed Rochester are married with a 2-year-old child, who lives with them and whom they support financially. In 2020, Ed and Jane realized the following items of income and expense: They also qualified for a $2,000 child tax credit. Their employers withheld $5,800 in federal income taxes from their paychecks (in the aggregate). Finally, the 2020 standard deduction amount for MFJ taxpayers is $24,800. What is the couple's taxable income?

Certain types of income are taxed at a lower rate than ordinary income.

Which of the following statements regarding tax credits is true?

The relationship test for qualifying relative requires the potential qualifying relative to have a family relationship with the taxpayer.

The relationship requirement is more broadly defined (includes more relationships)for a qualifying relative than for a qualifying child.

Jamison's gross tax liability is $7,000. Jamison had $2,000 of available credits and he had $4,000 of taxes withheld by his employer. What are Jamison's taxes due (or taxes refunded) with his tax return?

In June of Year 1, Jake's wife, Darla, died. The couple did not have any children and Jake did not remarry in Year 1 or Year 2. Which is the most favorable filing status for Jake in Year 2?

An individual may meet the relationship test to be a taxpayer's qualifying relative even if the individual has no family relationship with the taxpayer.