LSU ACCT 3221 Chapter 2 | Questions and Answers

LSU ACCT 3221 Chapter 2 | Questions and Answers True/False: The federal individual income tax returns are the 1040ES, 1040A and 1040. False True/False: The tax code defines adjusted gross income (AGI) as gross income minus a list of permitted deductions. True True/False: The amount of tax liability for a taxpayer depends on many factors, including the filing status of the taxpayer. True True/False: A married couple can file a joint return if they are married and if both have earned income. False True/False: A married couple in the process of obtaining a divorce cannot file a joint tax return. False True/False: A taxpayer filing separately must show the name and social security number of the spouse on the tax return. True True/False: To qualify for head of household, a taxpayer must maintain a household that is the principal place of abode of a qualifying person for more than half the year. True True/False: 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 True/False: If a taxpayer's spouse dies during the tax year, the taxpayer must file as a qualifying widow(er). False True/False: The exemption amount is subject to annual adjustment for inflation. True True/False: The personal exemption for 2009 is $3,750. False True/False: A taxpayer can be claimed as a dependent on another return and still he or she can claim a personal exemption on his or her tax return. False True/False: To be claimed as a dependent, a person must be a qualifying child or a qualifying relative. True True/False: A qualifying child does not have to meet the support test in order to be claimed as a dependent. False True/False: 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 True/False: A taxpayer who either is 65 or older or blind can claim an additional standard deduction. True True/False: The standard deduction in 2009 for a married couple, under 65 and not blind, is $11,400. True True/False: In 2009, the additional standard deduction for a single taxpayer, who is 65 or older and not blind, is $1,400. True True/False: Even if the total of the itemized deductions is lower than the standard deduction, a taxpayer should choose to itemize on his or her tax return. False True/False: The tax tables stop at taxable income of $110,000. False True/False: Most taxpayers make payments to the IRS through income tax withholdings and quarterly estimated tax payments. True True/False: A taxpayer may request an automatic seven-month extension of time to file his or her tax return. False True/False: An extension to file a tax return is an extension of time to file, not an extension of time to pay. True True/False: The maximum penalty for failure to file a tax return is 25%. True True/False: The IRS can impose a 75% penalty on any portion of understatement of tax that is attributable to negligence. False A single taxpayer is 45 years old and has wages of only $15,000. Which is the simplest form this person can file? A. 1040A. B. 1040EZ. C. 1040. D. 1040ES. A 35 year-old taxpayer with a dependent child and claiming head of household status has received $24,000 in alimony payments and earned wages of $45,000. Which is the simplest form this person can file? A. 1040. B. 1040A. C. 1040ES. D. 1040EZ. 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. A. Single. B. Head of Household. C. Qualifying Widow(er). D. Married Filing Separately. The taxpayer's spouse died at the beginning of 2008. He has no qualifying child. Which status should the taxpayer select when filing his tax return for 2009? A. Married Filing Jointly. B. Married Filing Separately. C. Single. D. Qualifying Widow(er). 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? A. Head of Household. B. Single. C. Qualifying widow(er). D. Married Filing Separately. For tax purposes, marital status is determined as of the __________ day of the year. A. first B. last C. third D. None of the above What was the amount of the personal exemption for 2009? A. $3,100. B. $3,400. C. $3,750. D. $3,650. Tina is 21 years of age and a full-time student living with her parents. She had wages of $550 ($60 of income tax withholding) for 2009. Can Tina claim her exemption on her return even though her parents will claim her as a dependent on their tax return? A. Tina and her parents can both claim the exemption. B. No, Tina cannot claim the exemption. C. No one can claim the exemption for Tina. D. Yes, Tina can claim the exemption. A taxpayer can deduct a(an) __________ amount from AGI for each dependent. A. exemption B. deduction C. itemized D. adjustment Maria is 21 years of age and a full-time student living by herself. She had wages of $19,000 for 2009. Can Maria claim the exemption for herself on her tax return? A. Maria's parents can claim the exemption. B. Both, Maria and her parents can claim the exemption. C. Yes, Maria can claim the exemption. D. No one can claim the exemption for Maria. 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?