Ch 2 To 4 Wrong Answers Flashcards
Can the person who claims the dependent in a multiple support agreement also claim head of household filing status
No, head of household status can’t be claimed in multiple
Support agreement
Are old age allowances available for dependents?
Not available for dependents
Increase value of standard deduction
How does a dependent calculate their standard deduction
For 2013?
Salary + $350
If there is no written agreement in a divorce, can a parent who provides over half the support for children but does not have custody receive the dependency exemption or child credit?
The parent would receive neither
A couple has just gotten divorced. Juan makes $200k and Maria makes 60k, the kids live with Maria, Juan provides over 50% of the support for the kids.
What advice would you give juan and Maria about the dependency exemption, child credit and filing status?
1 Juan should claim dependency exemption b/c is in higher
Tax bracket
2 Maria should claim child credit because it is phased out for AGI over 75k for. Single tax payers
3 Maria can claim head of household
Juan can claim single filing status
Chris age 15 and single is a dependent of his parents. He has earned income of $1900 and interest of $400. Does he need to file a return?
Yes his gross income of $2300 exceeds his standard deduction of $2250 (1900 + 350)
Chris’s standard deduction is limited to his earned income + $350
Doug age 25 and his wife are separated. He earned $5000 while attending school during the year. Does Doug need to file a return?
Bout must file because his gross income is over $3900 and he is married and not living with his spouse
Celia’s husband died in 2011, her 21 year old son lived with her for 2011, 2012, 2013, 2014. He made $5000 each year and was a part time student. Celia provided over half her sons support. What are the most beneficial filing statuses for Celia in 2011 - 2014
2011 = joint
2012 = single, Wally is not a qualifying child because he isn’t a full time student and he’s over 18
Juanita is a single parent who maintained a household for her unmarried son Josh age 19. Josh worked full time and earned $16k and provided 40% of his support. What is Juanita filing status?
Single, josh is not a qualifying child because he is over age 18 and not a full time student
If a women gets left by her husband in march and they are still married as of the end of the year and she is taking care of their dependent child, what is her filing status?
Head of household because she meets the tests for
abandoned spouse:
Still legally married, lived apart from spouse for 6 months
Paid over half household costs for dependent child
Debbie is 24 years old and a dependent of her parents. She earns $4,200 working part time and receives $2,200 interest on savings. What is her taxable income? Would her taxable income be different if Debbie was 16 years old?
Taxable income = $1850 ($4200 + 2200 - (4200 + 350))
Wouldn’t be different at 16 unless parents are in higher tax
Bracket where interest income would be taxed at higher
Rate
Ed is the beneficiary of a $20,000 insurance policy on the life of his mother. Would Amy have to report any income if her brother Ed had given her the policy? Assume the only payment she made was $9000 for premiums.
No, no income has to be recognized upon collection on
Life insurance if policy is transferred as gift
A newspaper article stated that Quincy has been convicted of to evasion, Quincy had never actually evaded taxes, sued in won a compensatory settlement of $4,000 from the newspaper. Is this amount taxable?
$4,000 is taxable
Steve fell and injured his knee. He was unable to work for 4 months. His employer financed disability income policy paid him $1,600 per month. Is this taxable?
Yes, 1600 is taxable as it is derived from an employer financed policy
