Questions and Answers of Income Tax Fundamentals

Diego, age 28, married Dolores, age 27, in 2018. Their salaries for the year amounted to $47,230 and they had interest income of $3,500. Diego and Dolores’ deductions for adjusted gross income
On which of these would wage income be reported? a. Schedule 1 b. Schedule 2 c. Schedule 4 d. Form 1040
In 2018, Lou has a salary of $53,300 from her job. She also has interest income of $1,600 and dividend income of $400. Lou is single and has no dependents. During the year, Lou sold silver coins held
Partnership income is reported on: a. Form 1040 b. Form 1120 c. Form 1040X d. Form 1065
Leslie is a single taxpayer who is under age 65 and in good health. For 2018, she has a salary of $24,000 and itemized deductions of $1,000. Leslie allows her mother to live with her during the
Which of the following is not a purpose of the U.S. federal tax system? a. Exact political revengeb. Raise revenuec. Meet economic goalsd. Meet social goals
Jason and Mary Wells, friends of yours, were married on December 30, 2018. They know you are studying taxes and have sent you an e-mail with a question concerning their filing status. Jason and Mary
Which of the following is not a change made to individual taxation by the Tax Cuts and Jobs Act? a. Repeal of personal exemptionsb. General lowering of tax ratesc. Repeal of the individual
Patty Banyan is a single taxpayer living at 543 Space Drive, Houston, TX 77099. Her Social Security number is 466-33-1234. For 2018, Patty has no dependents, and her W-2, from her job at a local
Marc’s brother, Phillip, who is a 20-year-old French citizen, lives in France for the full year. Marc supports Phillip while he attends college. Can Marc claim Phillip as a dependent? Why or why
Go to the IRS website (www.irs.gov) and print out a copy of the most recent Schedule F of Form 1040.
Go to the Turbo Tax Blog (http://blog.turbotax.intuit.com/) and search the blog for an article on deductions related to service animals. Determine which of the following expenses might be deductible:
Vanessa Lazo was an amazing high school student and so it was no great surprise when she was accepted into Prestige Private University (PPU). To entice Vanessa to attend PPU, the school offered her a
In each of the following situations, determine whether the taxpayer(s) has/have a dependent. Dependent? (Yes/No) a. Donna, a 20-year-old single taxpayer, supports her mother, who lives in her
Access the Internet and go to www.irs.gov and select “Search Forms & Instructions.” Enter “4868” into the search box. What is Line 6 of the Form 4868? a. Total paymentsb. Balance
Shannon, a single taxpayer, has a long-term capital loss of $7,000 on the sale of bonds in 2018 and no other capital gains or losses. Her taxable income without this transaction is $47,000. What is
Alexis purchased a rental house 3 years ago for $290,000. Her depreciation to date is $35,000. Due to a decrease in real estate prices, she sells the house for only $280,000 in 2018. What is her gain
Maggie is single and supports her 85-year-old parents who have no income and live in a home rented for them by Maggie. What is Maggie’s filing status and why?

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