Indicate in each of the following independent situations the amount of the standard deduction the taxpayers should claim on their 2010 income tax returns.

______ 1. Adam is 45 years old, in good health, and single.

______ 2. Bill and Betty are married and file a joint return. Bill is 66 years old, and Betty is 60.

______ 3. Charlie is 70, single, and blind.

______ 4. Debbie qualifies for head of household filing status, is 35 years old, and is in good health.

______ 5. Elizabeth is 9 years old, and her only income is $3,600 of interest on a savings account. She is claimed as a dependent on her parents’ tax return.

______ 6. Frank and Freida are married with two dependent children. They file a joint return, are in good health, and both of them are under 65 years of age. In the spring of 2010, Congress passed health care legislation with the goal of providing coverage over the next several years for many millions of Americans who are currently not covered by health insurance. This may be one of the most significant pieces of social legislation passed in our lifetime, and much of it is administered and enforced through our tax system. The following is a summary of some tax elements of the health care legislation and the phase-in dates:

Tax Rates Beginning in 2013, high-income taxpayers (modified AGI over

$200,000 for single taxpayers and over $250,000 for married taxpayers) will be subject to a new Medicare tax on most income. Please see Sections 4.10, 9.3, and 9.6 for coverage of the Medicare tax in 2010. The 2013 tax will be an additional .9 percent on most earned income which is already subject to the Medicare tax, and an additional 3.8 percent on most investment income, including capital gains, interest, dividends and rental income. Distributions from IRAs and retirement plans and municipal bond interest will be exempt from this tax.

Extended Coverage for Adult Children Beginning in 2010, any health plan which covers dependents must be extended to allow for coverage of most unmarried adult children through age 26.

Small Employer Health Insurance Credit In 2010, small employers will be allowed a credit for health insurance provided to workers who are not owners and who meet certain criteria. This credit will continue with differing requirements through 2015.

Itemized Deduction Threshold Increases Beginning in 2013, the AGI threshold for deducting medical expenses as an itemized deduction will increase from 7.5 percent to 10 percent of AGI, with a temporary reprieve for seniors age 65 or older.

Refundable Premium Assistance Credit Beginning in 2014, a tax return credit will be allowed to help subsidize the purchase of health insurance through new health benefit ‘‘exchanges’’ for certain low-income taxpayers.

Tax Return Penalty for Failure to Maintain Coverage Beginning in 2014, taxpayers must have qualifying health coverage for themselves and their dependents or be subject to a penalty which will be reported and paid on their personal tax return.

‘‘Play or Pay’’ Penalty for Large Employers Not Offering Required Health Insurance Beginning in 2014, large employers will be assessed penalties for not offering health coverage. The calculation of the penalty is complex and depends on many variables such as type of coverage provided by the employer and income levels of the employees.