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

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Question 61

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The standard deduction amount varies by filing status.

A) True
B) False

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Question 62

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Which of the following statements regarding personal and dependency exemptions is true?

A) To qualify as a dependent of another, an individual must be a resident of the United States.
B) To qualify as a dependent of another, an individual may not file a joint return with the individual's spouse under any circumstance.
C) To qualify as a dependent of another, an individual must have a family relationship with the other person.
D) To qualify as a dependent of another, an individual must be either a qualifying child or a qualifying relative of the other person.

E) B) and D)
F) None of the above

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Question 63

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Eric and Josephine were married in year 1. In year 2, Eric dies. The couple did not have any children. Assuming Josephine does not remarry, she may file as a qualifying widow in year 3.

Tax credits reduce taxable income dollar for dollar.

In year 1, the Bennetts' 25-year-old daughter, Jane, is a full-time student at an out-of-state university but she plans to return home after the school year ends. In previous years, Jane has never worked and her parents have always been able to claim her as a dependent. In year 1, a kind neighbor offers to pay for all of Jane's educational and living expenses. Which of the following statements is most accurate regarding whether Jane's parents would be allowed to claim an exemption for Jane in year 1 assuming the neighbor pays for all of Jane's support?

Taxpayers who file as qualifying widows/widowers are treated exactly the same for tax purposes in all respects as taxpayers who are married filing jointly for tax purposes.

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

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

In June of year 1, Edgar's wife Cathy died and Edgar did not remarry during the year. What is his filing status for year 1 (assuming they did not have any dependents) ?

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

Which of the following statements is true:

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?

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?

The standard deduction amount for married filing separately taxpayers (MFS) is less than the standard deduction amount for married filing jointly taxpayers.

A child who is her parents' qualifying child can claim a personal exemption for herself as long as her parents choose not to claim her as a dependent.

In June of year 1, Eric's wife Savannah died. Eric did not remarry during year 1, year 2, or year 3. Eric maintains the household for his dependent daughter Catherine in year 1, year 2, and year 3. Which is the most advantageous filing status for Eric in year 2?

The relationship requirement for qualifying relative includes cousins.

From AGI deductions are generally more valuable to taxpayers than for AGI deductions.

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

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