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

Hannah, who is single, received a qualified dividend of $1,000. Hannah's marginal ordinary income tax rate is 28%. What amount of tax must she pay on the $1,000 dividend?

Sullivan's wife Susan died four years ago. Sullivan has not remarried and he maintains a home for his dependent child Sammy. In 2018, Sullivan received $70,000 of salary from his employer, $3,000 of qualified business income from a business investment and he paid $10,000 of itemized deductions. What is Sullivan's taxable income for 2018?

Which of the following statements about a qualifying person for head of household filing status is true?

Which of the following relationships does NOT pass the relationship test for a qualifying child?

The relationship requirement is more broadly defined (includes more relationships) for a qualifying relative than it is for a qualifying child.

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?

Which of the following shows the correct relationship among standard deduction amounts for the respective filing statuses?

Mason and his wife Madison have been married for five years. Jaxon, who is 18 years old and unrelated to Mason and Madison, has been living with Mason and Madison for the last two years. In May of year 1, Mason and Madison divorced. Mason and Jaxon stayed in the home and Madison moved out. During year 2, Mason provided all of Jaxon's support and Jaxon lived in the home for all of year 2. Jaxon did not earn any income during year 2. What is Mason's most favorable filing status for year 2?

Which of the following statements regarding the difference between the requirements for a qualifying child and the requirements for a qualifying relative is false?

Joanna received $60,000 compensation from her employer, the value of her stock in ABC company appreciated by $5,000 during the year (but she did not sell any of the stock), she received $30,000 of life insurance proceeds from the death of her husband. What is the amount of Joanna's gross income from these items?

When determining whether a child meets the qualifying child support test for the parents, scholarships earned by the child do not count as self-support provided by the child.

Madison's gross tax liability is $9,000. Madison had $3,000 of tax credits available and she had $8,000 of taxes withheld by her employer. What is Madison's taxes due (or taxes refunded) with her tax return?

All of the following represents a type or character of income except:

Taxpayers may prepay their tax liability through withholdings and through estimated tax payments.

Qualified dividends are taxed at the same rate as ordinary income.

Michael, Diane, Karen, and Kenny provide support for their mother Janet who is 75 years old. Janet lives by herself in an apartment in Los Angeles. Janet's gross income for the year is $3,000. Janet provides 10% of her own support, Michael provides 40% of Janet's support, Diane provides 8% of Janet's support, Karen provides 10% of Janet's support, and Kenny provides the remaining 32% of Janet's support. Under a multiple support agreement, who is eligible to claim Janet as a dependent as a qualifying relative?

Jamison's gross tax liability is $7,000. Jamison had $2,000 of available credits and he had $4,000 of taxes withheld by his employer. What is Jamison's taxes due (or taxes refunded) with his tax return?

Sam and Tracy have been married for 25 years. They have filed a joint return every year of their marriage. They have two sons Christopher and Zachary. Christopher is 19 years old and Zachary is 14 years old. Christopher lived in his parents' home from January through August and he lived in his own apartment from September through December. During the year, Christopher attended college for one month before dropping out. Christopher's living expenses totaled $12,000 for the year. Of that, Christopher paid $5,000 from income he received while working a part time job. Sam and Tracy provided the remaining $7,000 of Christopher's support. Zachary lived at home the entire year and did not earn any income. Who are Sam and Tracy allowed to claim as dependents?

Which of the following is NOT a from AGI deduction?

Even though taxpayers can no longer deduct dependency exemptions, it is still important to determine who qualifies as a taxpayer's dependent.