1.

Steve, age 55, retired last year on disability due to back problems. Before retirement, his employer paid 75% of his disability insurance premiums. Last year, Steve received $1,350 per month from disability (for 12 months). How much of Steves disability payments are reported as taxable income?

Select one:

a. $ 0

b. $ 4,050

c. $16,200

d. $12,150

2.

Kevin operates a floral retail store as a sole proprietorship. During the tax year 2018, he had a net profit of $150,000. What is the correct amount of his self-employment tax?

Select one:

a. $19,645

b. $19,939

c. $22,950

d. $21,194

3.

Justin, a teacher, spent a total of $500 on classroom supplies for his third-grade students. He asks his tax preparer if hes able to deduct any of these expenses. How much is he able to deduct, if any, and where does he report this amount on his tax return?

Select one:

a. The money Justin has spent out-of-pocket is not deductible.

b. Justin can report $250 as an adjustment to income on Schedule 1 (Form 1040), line 23 and the remaining $250 is not deductible.

c. Justin can report all his expenses as an adjustment to income on Schedule 1 (Form 1040), line 23.

d. Justin can deduct $250 as an adjustment to income on Schedule 1 (Form 1040), line 23. The remainder can be reported on Schedule A, line 21 as an unreimbursed employee expense.

4.

Grayson works for a small business. His employer establishes a SIMPLE IRA for each employees retirement. Which of the following statements is correct regarding the SIMPLE plan?

Select one:

a. SIMPLE plans include SIMPLE IRA and SIMPLE 401(k).

b. An employer with 100 or fewer employees who earned $5,000 or more is eligible to set up a SIMPLE plan for the employees.

c. A SIMPLE plan is a written agreement between the taxpayer and the employer that allows the taxpayer to choose to reduce his compensation by a certain percentage each pay period.

d. All the answer choices are correct.

5.

Diane, single, works for a company that does not have a retirement plan. Diane is considering making contributions to a Roth IRA. Which of the following is a condition for making contributions to a Roth IRA?

Select one:

a. The taxpayer must have earned taxable income during the year and has not reached 59 by the end of the year.

b. The taxpayer must have earned taxable income during the year, and the modified AGI must be less than $135,000.

c. Her only source of earnings was from a pension, and she was under the age of 70 by the end of the year.

d. The taxpayer must have earned taxable income during the year and has not reached age 70 by the end of the year.

6.

Jodie, age 52, filed as Married Filing Separately and lived with her husband during the year. Her modified AGI is $68,000. She is considering contributing funds to her Roth IRA. What amount is Jodie allowed to contribute to her Roth IRA for the tax year?

Select one:

a. $6,500

b. $5,500

c. $3,000

d. $ 0