ACCT-104- CHAPTER 2-HOMEWORK, EXTRA CREDIT- QUIZ

To be a qualifying child, the taxpayer must meet three general tests and five specific tests. Which one is not part of the five specific tests?

Gross income test.

A taxpayer is married with a qualifying child (dependent), but she has been living separate from her spouse for the last five months of the year. However, she paid for more than half of the cost of keeping up the household. Her spouse does not want to file jointly. What filing status must she use when filing her tax return? She wants to obtain the maximum legal benefit.

Married Filing Separately.

The taxpayer is single, maintains a household for herself, and maintains a separate household that is the principal place of abode of her dependent widowed mother.

The taxpayer can claim head of household status

The taxpayer is single and maintains a household that is the principal place of abode of her infant son.

The taxpayer can claim head of household status.

The taxpayer was married from January to October and lived with his spouse from January to May. From June 1 to December 31, the taxpayer maintained a household that was the principal place of abode of his married son and daughter-in-law, whom the taxpayer can claim as dependents.

The taxpayer can claim head of household status.

What are the three tests a qualifying child or qualifying relative must meet to be claimed as a dependent?

the dependent taxpayer, joint return, and citizen or resident tests.

Failure to make required estimated payments will subject the taxpayer to a potential underpayment penalty plus interest. However, if the difference between the tax shown on the return and the amount of tax withheld for wages is less than _______, the taxpayer will not be assessed a penalty.

$1,000

Ed's parents can claim him as a dependent on their tax return. In 2019, his only source of income was $1,100 of interest income received from Global Bank. What is Ed's standard deduction?

$1,100.

The basic standard deduction in 2019 for a single taxpayer who is 67 years old and not blind is

$13,850.

Which amount represents the standard deduction for a taxpayer who is single and 68 years of age?

$13,850.

What is the limit on the social security amount for 2019?

$132,900.

The basic standard deduction in 2019 for a Head of Household taxpayer who is 41 years old and not blind is:

$18,350.

The basic standard deduction in 2019 for a taxpayer, 67 and not blind, filing head of household is:

$20,000.

A qualifying relative must earn less than _____ for the year 2019.

$4,200

Peter forgot to file his tax return by April 15. He did not file an extension. Peter finally filed his tax return on July 31 and had a remaining tax liability of $3,500. What is Peter's failure to file penalty? Assume he made all his payments on time.

$700

Victoria's 2019 tax return was due on April 15, 2020, but she did not file it until June 12, 2020. Victoria did not file an extension. The tax due on the tax return when filed was $8,500. In 2019, Victoria paid in $12,000 through withholding. Her 2018 tax liability was $11,500. Victoria's AGI for 2019 is less than $150,000. How much penalty will Victoria have to pay (disregard interest)?

$850 = ( $8,500 x 5%) x 2

The IRS can impose a ________ penalty on the tax due on a return where there is negligence.

20%

The failure to file penalty is ________ of the tax shown on the return for each month (or fraction of a month) the tax return is not filed, up to a maximum of 25%.

5.0%

The taxpayer must provide over ________ of the qualifying relative's support to be able to claim a dependency exemption.

50%

The interest charged by the IRS for the first three months of 2019 was:

6%.

The IRS can impose a _______ penalty on any portion of understatement of tax that is attributable to fraud.

75%

To be a qualifying relative, the taxpayer must meet three general tests and four specific tests. Which one is not part of the four specific tests?

Age test.

For a qualifying relative to be claimed as a dependent, a person must either be related to the taxpayer, or be a member of the taxpayer's household for the entire year. Select the relative who must be part of the taxpayer's household for the entire year.

Cousin.

What are the three tests a qualifying child or qualifying relative must meet to be claimed as a dependent?

Dependent taxpayer Joint return Citizen or Residen

To be a qualifying child, the taxpayer must meet three general tests and five specific tests. What are the three general tests?

Dependent taxpayer test, joint return test and citizen or resident test.

Donald is a 21-year-old full-time college student. During 2019, he earned $2,550 from a part-time job and $1,150 in interest income. If Donald is a dependent of his parents, what is his standard deduction amount? If Donald supports himself and is not a dependent of someone else, what is his standard deduction amount?

Donald's standard deduction amount if he is a dependent of his parents is the greater of $1,100 or his earned income plus $350. Donald's earned income is $2,550 so his standard deduction will be $2,900. If Donald is self-supporting, his standard deduction amount will be $12,200.

A qualifying child does not have to meet the support test in order to be claimed as a dependent.

False

A taxpayer must be married to claim Head of Household status.

False

An extension to file a tax return is an extension of time to file and an extension of time to pay.

False

If a taxpayer's spouse dies during the tax year, the taxpayer must file as a qualifying widow(er).

False ( The year the spouse dies, the surviving taxpayer can file a joint return if the couple was married on the date of death and has not remarried as of December 31 of the tax year. )

A legally divorced taxpayer maintains a household for himself and maintains a separate household that is the principal place of abode of his dependent widowed mother. What filing status should he use when filing his tax return?

Head of Household.

The taxpayer's spouse died at the beginning of 2019. He has no qualifying child. Which status should the taxpayer select when filing his tax return?

Married Filing Jointly.

The taxpayer's spouse died at the beginning of 2019. She has a qualifying child. Which status should the taxpayer select when filing her tax return for 2019?

Married Filing Jointly.

The taxpayer's spouse died at the beginning of 2018. He has no qualifying child. Which status should the taxpayer select when filing his tax return for 2019?

Single.

To be a qualifying child, the taxpayer must meet three general tests and five specific tests. Which one is not part of the three general tests?

Support test.

Which condition listed below is not required for a taxpayer to qualify as a qualifying widow(er) with dependent child?

Taxpayer must remarry before the end of the tax year in question.

In which of the following cases may the taxpayer claim head of household filing status? a. The taxpayer is single and maintains a household that is the principal place of abode of her infant son. The taxpayer can not claim head of household status. The taxpayer can claim head of household status. b. The taxpayer is single, maintains a household for herself, and maintains a separate household that is the principal place of abode of her dependent widowed mother. The taxpayer can claim head of household status. The taxpayer can not claim head of household status. c. The taxpayer was married from January to October and lived with his spouse from January to May. From June 1 to December 31, the taxpayer maintained a household that was the principal place of abode of his married son and daughter-in-law, whom the taxpayer can claim as dependents. The taxpayer can claim head of household status. The taxpayer can not claim head of household status. d. Same as (c) except the taxpayer lived with his ex-spouse until August and maintained the household from September 1 to the end of the year. The taxpayer can claim head of household status. The taxpayer can not claim head of household status.

The taxpayer can claim head of household status. The taxpayer can claim head of household status. The taxpayer can claim head of household status. The taxpayer can not claim head of household status.

Same as (c) except the taxpayer lived with his ex-spouse until August and maintained the household from September 1 to the end of the year.

The taxpayer can not claim head of household status.

A qualifying relative must be related to the taxpayer (as listed by the IRS), or be a member of the taxpayer's household for the entire year.

True

A taxpayer can qualify for head of household even though his or her parents are living in a separate household from that of the taxpayer (assume all other requirements are met).

True

If the taxpayer still owes tax after April 15, the IRS assesses interest based on the remaining amount owed.

True

The maximum penalty for failure to file a tax return that is not due to fraud is 25%.

True

To be claimed as a dependent, a person must be a qualifying child or a qualifying relative.

True

Criminal penalties only apply to:

Willful failure to collect or pay tax, willful failure to file a return and tax evasion.

Elisa is 21 years of age and a full-time student living with her parents. She had wages of $680 ($75 of income tax withholding) for 2019. Can Elisa file a tax return even though her parents will claim her as a dependent on their tax return?

Yes, Elisa can file a tax return

George is 21 years of age and a full-time student living with his parents who are paying more than 50% of his support. He had wages of $1,375 ($140 of income tax withholding) for 2019. Can George's parents claim him on their tax return even though he will file a tax return to claim his refund of $140?

Yes, George's parents can claim him as a dependent.

Donald is a 21-year-old full-time college student. During 2019, he earned $2,550 from a part-time job and $1,150 in interest income. If Donald is a dependent of his parents, what is his standard deduction amount? If Donald supports himself and is not a dependent of someone else, what is his standard deduction amount?

f Donald is a dependent $2,900 If Donald is not a dependent $12,200

Which of the following items would not be considered as support for a dependency exemption?

life insurance premiums

Which of the following items would not be considered as support for a dependency exemption?

life insurance premiums.