Chapter 4 Flashcards
Jeremy (unmarried) earned $100,000 in salary and $6,000 in interest income during the year. Jeremy’s employer withheld $10,000 of federal income taxes from Jeremy’s paychecks during the year. Jeremy has one qualifying dependent child (age 14) who lives with him. Jeremey qualifies to file as head of household and has $23,000 in itemized deductions.
A. Determine Jeremy’s tax refund or taxes due.
B. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $4,000. What is Jeremy’s tax refund or tax due including the tax on the capital gain?
Child Tax Credit (Details in Chapter 8)
$2,000 for each qualifying child under age 17 at end of year who is claimed as taxpayer’s dependent
a. Can the Samsons claim Jason as their dependent?
b. Assume the original facts except that Jason’s grandparents, not the Samsons, provided Jason with the $5,000 worth of support. Can the Samsons (Jason’s parents) claim Jason as their dependent? Why or why not?
c. Assume the original facts except that Jason earned $5,500 while working part-time and used this amount for his support. Can the Samsons claim Jason as their dependent? Why or why not?
A. Yes, the Samsons may claim Jason as their dependent. He is their qualifying child. See the following analysis.
B. Yes, the Samsons may claim Jason as their dependent. Jason is their qualifying child. See the following analysis
C. No, the Samsons may not claim Jason as their dependent. He is neither their qualifying child nor their qualifying relative. See the following analysis.
In each of the following independent cases, determine the taxpayer’s filing status and the number of dependents the taxpayer is allowed to claim.
A. Alexandra is a blind widow (spouse died five years ago) who provides a home for her 18-year-old nephew, Newt. Newt’s parents are dead, and so Newt supports himself. Newt’s gross income is $5,000.
B. Charlie intended to file a joint return with his spouse, Sally. However, Sally died in December. Charlie has not remarried.
C. Deshi cannot convince his spouse to consent to signing a joint return. The couple has not separated.
A. Alexandra is a blind widow (spouse died five years ago) who provides a home for her 18-year-old nephew, Newt. Newt’s parents are dead, and so Newt supports himself. Newt’s gross income is $5,000.
Alexandra will file single with no dependents. Alexandra is single and does not qualify for head of household because she does not provide more than half the costs of maintaining a home for a dependent child or qualifying relative because Newt is neither a qualifying child (he provides more than half his own support) nor a qualifying relative.
B. Charlie intended to file a joint return with his spouse, Sally. However, Sally died in December. Charlie has not remarried.
Married filing jointly with no dependents. A taxpayer is still considered to be married for the year in which his spouse died.
C. Deshi cannot convince his spouse to consent to signing a joint return. The couple has not separated.
Married filing separately with no dependents. Both spouses must consent to file a joint return.
