Chatper One Quiz

Your standard deduction will be $12,950 in 2022 if you are which of the following?

Single and 45 years old

Which of the following is an economic goal of the tax law?

Reducing unemployment

Dalton is a divorced taxpayer who provides a home for their dependent child, Edward. What filing status should Dalton indicate on their tax return?

Head of household

Juan, 45 years old and unmarried, contributed $1,000 monthly in 2022 to the support of his parents' household. The parents lived alone, and their income for 2022 consisted of $500 from dividends and interest. What is Juan's filing status, and how many dependents should he claim on his 2022 tax return?

Head of household and 2 dependents Unlike other dependents, parents are not required to live with their children for the taxpayer to claim head of household status.

Iris, widowed in 2021, pays all costs related to the home in which she and her unmarried child live. Her child does not qualify as her dependent. What is her filing status for 2022?

SIngle Head of household and surviving spouse require her child to be a dependent.

Which of the following is used to report capital gains and losses?

Schedule D Schedule A is used for itemized deductions, Schedule B is for interest and dividend income, Schedule C is for profit or loss from business, and Schedule D is used to report capital gains and losses.

In which of the following situations is the taxpayer excluded from having to file a 2022 income tax return?

When the taxpayer is a single 67-year-old with wages of $9,800

An individual is a head of household. What is this individual's 2022 standard deduction?

$19,400

What is reported on Schedule 2?

Additional Taxes Additional income and adjustments to income are reported on Schedule 1, additional taxes are reported on Schedule 2, and itemized deductions are reported on Schedule A.

Which of the following forms may be filed by individual taxpayers?

Form 1040 Form 1041 is for trusts, Form 1065 is for partnerships, and Form 1120 is for corporations.

In 2022, Wesley has a fairly simple tax situation with moderate wage income and a modest amount of interest income. Wesley, age 45, wishes to use the easiest possible tax form. He may file which of the following?

Form 1040 Individual taxpayers under age 65 file a Form 1040, while those 65 or older file 1040-SR. Form 1040-EZ is no longer available.

In 2022, Schedule 1 of Form 1040 is used to report what?

Unemployment compensation

Chad and Vivian are married. For 2022, Chad earned $25,000 and Vivian earned $30,000. They have decided to file separate returns. They have no deductions for adjusted gross income. Chad's itemized deductions are $14,200 and Vivian's are $4,000. Assuming Chad and Vivian do not live in a community property state and Chad deducts the greater of the standard deduction or itemized deductions, what is Chad's taxable income?

$10,800 Chad's itemized deductions are larger than the standard deduction, so he should itemize. ($25,000 − $14,200 = $10,800)

Elliot and Karmen are married. For 2022, Elliot earned $35,000 and Karmen earned $40,000. They have decided to file separate returns. They have no deductions for adjusted gross income. Karmen's itemized deductions are $15,600 so she is going to itemize. Elliot's itemized deductions are $4,750. Assuming Elliot and Karmen do not live in a community property state, what is Elliot's taxable income?

$30,250 ($35,000 − $4,750). When married filing separately, if one spouse itemizes, then both spouses must itemize (the same is true if using the standard deduction).

Which of the following is a test that must be met for a child to be considered a dependent, but does not apply to other qualifying relatives?

Domicile test

Which of the following is a goal of the tax law?

Encouraging certain social goals such as contributions to charity

Which of the following is true regarding the IRS?

The IRS offers an app for mobile phones users.

Which of the following is a true statement with respect to the gross income test for claiming a qualifying relative as a dependent?

The relative must receive less than $4,400 of gross income in order to qualify.

Which of the following factors are important in determining whether an individual is required to file an income tax return?

The taxpayer's filing status and gross income

Taxpayers who are blind get the benefit of _______.

an additional amount added to their standard deduction