Exam 4: Individual Income Tax Overview, Dependents, and Filing Status

Anna is a 21-year-old full-time college student (she plans on returning home at the end of the school year). Her total support for the year was $34,000 (including $8,000 of tuition). Anna covered $12,000 of her support costs out of her own pocket (from savings, she did not work)and she received an $8,000 scholarship that covered all of her tuition costs. Which of the following statements regarding who is allowed to claim Anna as an exemption is true?

A taxpayer may qualify for the head of household filing status if she has no dependent children but pays more than half of the cost of maintaining a separate household for her dependent parent.

Miguel, a widower whose wife died in Year 1, maintains a household for himself and his daughter, who qualifies as his dependent. Miguel did not remarry. What is the most favorable filing status that Miguel qualifies for in Year 3?

An individual may never be considered as both a qualifying relative and a qualifying child of the same taxpayer.

For AGI deductions are commonly referred to as deductions "below the line."

Which of the following statements regarding for AGI tax deductions is true?

Filing status determines all of the following except ___________

Which of the following statements regarding exclusions and/or deferrals is false?

It is generally more advantageous from a tax perspective for a married couple to file separately than it is for them to file jointly.

The Inouyes filed jointly in 2020. Their AGI is $78,000. They reported $3,000 of qualified business income and $22,000 of itemized deductions. They have two children, one of whom qualifies as their dependent as a qualifying child. The 2020 standard deduction amount for MFJ taxpayers is $24,800. What is the total amount of from AGI deductions they are allowed to claim on their 2020 tax return?

In April of Year 1, Martin left his wife, Marianne. The couple has two children under the age of 15. While the couple was apart, they were not legally divorced. Marianne remained in the home and paid all the costs of maintaining the home for the remainder of the year. Assuming the couple does not file jointly, which of the following statements regarding filing status is true?

Jane and Ed Rochester are married with a 2-year-old child, who lives with them and whom they support financially. In 2020, Ed and Jane realized the following items of income and expense: The Rochester's qualified for a $2,000 child tax credit and $2,900 in recovery rebate credit ($2,400 for themselves and $500 for their child). Assume the Rochesters did not receive the recovery rebate in advance. Their employers withheld $5,800 in federal income taxes from their paychecks (in the aggregate). Finally, the 2020 standard deduction amount for MFJ taxpayers is $24,800. What is the couple's tax due or tax refund? (Use the tax rate schedules, not tax tables.)

The relationship test for qualifying relative requires the potential qualifying relative to have a family relationship with the taxpayer.

The relationship requirement for qualifying relative includes cousins.

Jane and Ed Rochester are married with a 2-year-old child, who lives with them and whom they support financially. In 2020, Ed and Jane realized the following items of income and expense: They also qualified for a $2,000 child tax credit. Their employers withheld $5,800 in federal income taxes from their paychecks (in the aggregate). Finally, the 2020 standard deduction amount for MFJ taxpayers is $24,800. What is the couple's tax due or tax refund? (Use the tax rate schedules, not tax tables.)

A personal automobile is a capital asset.

In addition to the individual income tax, individuals may be required to pay taxes imposed on tax bases other than individual taxable income.

Which of the following statements is true?

For purposes ofdetermining filing status, which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

For AGI deductions are commonly referred to as deductions "above the line."