Question 1(8 points)

A dependent's only income for 2015 is $6,000 of taxable wages and $840 of taxable interest on a savings account. The dependent's 2015 taxable income is:

Question 1 options:

$0.

$840.

$540.

$190.

$590.

Save

Question 2(8 points)

Toni claims her father as a dependent. The father is 80 years old. The father's only source of gross income is some interest he earns from a savings account. The father's gross income threshold for purposes of having to file a tax return for 2015 is:

Question 2 options:

$2,300.

$2,600.

$10,300.

$1,050.

$7,850.

Save

Question 3(8 points)

When a taxpayer remarries in the same year that her spouse dies, the surviving spouse cannot file a joint return with her deceased spouse in the year of his death, even if her new spouse files a separate return.

Question 3 options:

True

False

Save

Question 4(8 points)

Which of the following persons do not pass both the age and relationship tests for a qualifying child?

Question 4 options:

The taxpayer's 24-year-old son who is a full-time college student

The taxpayer's 17-year-old niece who is a senior in high school

The taxpayer's 30-year-old daughter who is permanently and totally disabled

None of the above passes both the age and relationship tests for a qualifying child

All of the above pass both the age and relationship tests for a qualifying child

Save

Question 5(8 points)

A single person, who is claimed as a dependent, has $2,000 of earned income. This person can claim the same standard deduction allowed to a single taxpayer who is not claimed as a dependent.

Question 5 options:

True

False

Save

Question 6(8 points)

Which of the following can be deducted as an itemized deduction on an individual taxpayer's tax return?

Question 6 options:

Medical expenses

Casualty losses

Employee business expenses

None of the above can be deducted as an itemized deduction

All of the above can be deducted as an itemized deduction

Save

Question 7(8 points)

The Internal Revenue Code (Code) provides an exhaustive list of items that comprise gross income.

Question 7 options:

True

False

Save

Question 8(8 points)

Employees who work for two employers may have too much in OASDI taxes withheld from their gross wages. To have too much in OASDI taxes withheld from their pay in 2015, employees' gross wages would have to exceed:

Question 8 options:

$200,000.

$118,500.

$250,000.

$100,000.

$110,000.

Save

Question 9(8 points)

Which of the following is a refundable credit?

Question 9 options:

The lifetime learning education credit

The retirement savings contributions credit

The premium tax credit

The child and dependent care credit

None of the above is refundable credits

Save

Question 10(8 points)

Any unused child tax credit (due to not having enough tax liability) can be carried forward and used in the next tax year.

Question 10 options:

True

False

Save

Question 11(8 points)

For purposes of the child and dependent care credit, only the custodial parent can claim a child as a qualifying child.

Question 11 options:

True

False

Save

Question 12(8 points)

Which of the following taxpayers qualifies to claim the child tax credit?

Question 12 options:

A taxpayer who files as head of household and claims his 18-year-old daughter as a dependent.

A divorced taxpayer who claims his 15-year-old son as a dependent. The son lives most of the year with the ex-wife. The taxpayer was given the dependency exemption when the ex-wife signed away her right to claim the son as her dependent.

A 25-year-old unmarried taxpayer who claims her 10-year-old sister as a dependent.

both b. and c.

both a. and b.

Save

Question 13(8 points)

The child tax credit for a married couple with two dependent children (ages 6 and 9) and AGI of $121,600 is:

Question 13 options:

$0.

$600.

$1,400.

$2,000.

none of the above.

Save

Question 14(8 points)

When there is no custodial parent, the parent with the least amount of AGI gets to claim the earned income credit for the qualifying child.

Question 14 options:

True

False

Save

Question 15(8 points)

An employee receives $100 in tips during March. She reports the tips to her employer. Which of the following statements is correct regarding tips?

Question 15 options:

The employer adds the $100 to the employee's wages and withholds income, social security, and Medicare taxes on the amount.

The employer reports the $100 as allocated tips on the employee's W-2.

The employer adds the tips to the employee's wages and withholds income taxes, but not social security or Medicare taxes, on the amount.

The employer adds the tips to the employee's wages and withholds social security and Medicare taxes, but not income taxes, on the amount.

None of the above.

Save

Question 16(8 points)

Payments for child support are not included in gross income of the recipient custodial parent.

Question 16 options:

True

False

Save

Question 17(8 points)

Cash basis taxpayers may choose to recognize interest on United States Savings Bonds each year as it accrues.

Question 17 options:

True

False

Save

Question 18(8 points)

Joyce is self-employed and uses the calendar year and the accrual method of accounting. She reports the following activities for December:

Received $10,000 from clients for services to be performed next year

Received $30,000 for services performed in December

Reports $15,000 in accounts receivable for work performed in December

Received $2,000 for services performed in November

What amount must Joyce include in gross income for December?

Question 18 options:

$45,000

$47,000

$55,000

$57,000

None of the above

Save

Question 19(8 points)

In 2014, an unmarried taxpayer deducted $6,750 of itemized deductions since that amount exceeded the $6,200 standard deduction amount. Included in the itemized deductions was $3,700 of state income tax withheld. In 2015, the taxpayer receives an $800 refund check from the state government. What amount must the taxpayer include in his 2015 gross income?

Question 19 options:

$0

$550

$750

$800

$1,600

Save

Question 20(8 points)

Brian, a calendar-year taxpayer, purchased an annuity contract which started paying him $54 each month on June 1 of the current year. The annuity cost him $2,400, and it has an expected return of $7,200. How much of this annuity is includable in gross income for the current year?

Question 20 options:

$0

$378

$126

$252

None of the above

Save

Question 21(8 points)

Clark, a 12-year-old child, lives with his parents. During the current year, Clark earned $2,400 delivering newspapers. This was his only income. Clark's parents file a joint return and claim Clark as a dependent. Considering this information, which of the following statements is correct?

Question 21 options:

The parents must report Clark's income on their tax return.

Clark must use his parents' tax rate to compute his tax liability.

Clark's taxable income is $1,350.

Clark's taxable income is $0.

None of the above.

Save

Question 22(8 points)

The maximum dollar limit on deductible moving expenses is:

Question 22 options:

$2,250.

$2,500.

$5,250.

$10,000.

None of the above.

Save

Question 23(8 points)

A penalty charged by a commercial bank on the early withdrawal of money from a certificate of deposit can be deducted for adjusted gross income.

Question 23 options:

True

False

Save

Question 24(8 points)

The fair market value of inherited property is included in the gross income of the beneficiary.

Question 24 options:

True

False

Save

Question 25(8 points)

Tax-exempt interest income on municipal bonds is not reported on the tax return.

Question 25 options:

True

False

Save

Question 26(8 points)

Tom and Pat Simon file a joint return. During the year, they pay $2,000 of student loan interest. If the Simons' modified AGI is $136,000, their student loan interest deduction is:

Question 26 options:

$0.

$400.

$1,000.

$1,600.

$2,000.

Save

Question 27(8 points)

Which of the following items results in gross income to Sandy?

Question 27 options:

Workers' compensation for an injury received while working in her employer's factory.

Life insurance proceeds received following her husband's death.

Earnings on Sandy's Roth IRA credited to her account during the year (but not withdrawn).

Both a. and c.

None of the above.

Save

Question 28(8 points)

Taxpayers who cash in Series EE savings bonds exclude all of the interest from gross income if they use the proceeds to pay qualified educational expenses for an eligible student.

Question 28 options:

True

False

Save

Question 29(8 points)

Interest paid on amounts borrowed to purchase municipal bonds is not deductible.

Question 29 options:

True

False

Save

Question 30(8 points)

Land that has appreciated in value and is contributed to a qualified charity may be eligible for a charitable contribution deduction equal to its fair market value.

Question 30 options:

True

False

Save

Question 31(8 points)

In order to deduct all interest on acquisition debt, the debt cannot exceed $100,000.

Question 31 options:

True

False

Save

Question 32(8 points)

Transportation costs getting to and from medical care providers can be claimed as a deductible medical expense.

Question 32 options:

True

False

Save

Question 33(8 points)

Randi pays $2,000 to install ramps in her home to allow access to her handicapped son. A real estate appraiser estimates that this improvement will increase the value of Randi's home by $700. The amount that Randi can deduct as a medical expense is:

Question 33 options:

$0.

$700.

$1,000.

$1,300.

$2,000.

Save

Question 34(8 points)

An over-the-counter flu medicine is a deductible medical expense.

Question 34 options:

True

False

Save

Question 35(8 points)

Nondeductible taxes include all of the following except:

Question 35 options:

social security taxes.

federal gift taxes.

real estate taxes paid on behalf of the taxpayer's son.

gasoline taxes.

all of the above are nondeductible taxes.

Save