POINTS) MULTIPLE CHOICE AND TRUE/FALSE QUESTIONS (100 1. Standard deduction for tax purposes are a. b. c. Deductions from AGI (Adjusted Gross Income Made up of basic and additional deductions Permitted only for those using form 1040EZ or 1040A All of the above Only a and b above. d. e. 2. T,F. Exemptions unlike standard deductions are not deducted from AGI. 3. 4. 5. T, F. T, F. T, F. Exemptions provide taxpayers with their biggest tax deductions. Any person filing a tax return falls into five filing categories or groups. Head of Household can be used for unmarried persons only when they have dependents and filing as singles filing separately. T, F. 6 Taxpayers with self-employment income must fil a tax return when their gross income is $400 or more 7. T,F. Mr. Fox has $1,000 only source of income from self-employment. His expenses amount to $580. To qualify for filing under self-employment provision, Mr. Fox's net income must exceed 93.35%. 8. T, F. Under the cash method elected by a taxpayer, income must be reported when actually Taxpayers constructively receive income when it is credited to their accounts or made received or constructively received. 9. T, F. available to them without restrictions. 10. T, F. Under the cash method, taxpayers deduct expenses when cash is paid but only expenses related to current year not past year. 11. T,F. A sole proprietor is allowed to deduct a net loss before arriving at adjusted gross income. 12. T, F. Schedule C is a Profit and Loss Form for Businesses that report their net profit or losses from their entrepreneurships. 13. T, F. 14. T, F. In Schedule C, Income is report in Part I whilst expenses are reported in Part lI. Sole Proprietors who use part of their homes as Office Space for their business must complete Form 8829. 15. T, F. The cost of maintain a home-office must be determined and allocated proportionally from cost of maintain the entire home. 16. Sole proprietors who own a business can: a. Establish retirement plan b. Deduct the contributions they make to plan from their gross income c. Reduce their profit by the contribution d. A and b above e. None of the above