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

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Question 41

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To be considered a qualifying child of a taxpayer, the individual must be the son or daughter of the taxpayer.

A) True
B) False

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Question 42

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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?

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Question 43

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Which of the following is not a filing status?

A taxpayer may qualify for the head of household filing status even if she does not have any dependent children.

The standard deduction amount varies by filing status.

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?

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

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?

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.

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 mother and/or father.

In certain circumstances, a married taxpayer who files separately may qualify for the head of household filing status.

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?

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

Jan is unmarried and has no children, but she provides all of the financial support for her mother, who lives in an apartment across town. Jan's mother qualifies as Jan's dependent. Which is the most advantageous filing status available to Jan?

Which of the following is not an itemized deduction?

Anna is a qualifying child of her parents. However, she was recently married. Anna and her husband filed a joint return. If they had filed separately, Anna would have owed no taxes, though her husband would have owed just $5. Because Anna herself owed no taxes, her parents can still claim her as a dependent.

If a taxpayer does not provide more than half the support of a child, that child cannot qualify as the taxpayer's qualifying child.

Which of the following statements regarding tax deductions is false?

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

Jasmine and her husband Arty have been married for 25 years. In May of this year, the couple divorced. During the year, Jasmine provided all the support for herself and her 22-year-old child Dexter who lived in the same home as Jasmine for the entire year. Dexter is employed full-time, earning $29,000 this year. What is the Jasmine's most favorable filing status for the year?