Filing Status and Dependents Flashcards
- If your client files as married filing separately, which of the following statements is true?
(Search Chapter 1)
a. Your client has a capital loss limitation of $1,500.
b. Your client can claim the earned income credit.
c. Your client can deduct student loan interest if the income requirement is met.
d. Your client can deduct an education tax credit if the income requirement is met.
Answer: a. Your client has a capital loss limitation of $1,500.
- Trevor, who has no children, is officially divorced by state law on December 30, 2021, which includes the state-mandated waiting period. Trevor did not remarry on December 30 or 31 of 2021. Which filing status can he use for 2021?
a. single
b. married filing separately
c. married filing jointly
d. head of household
(Search Chapter 1)
Answer: a. single
That’s correct! Trevor must use the single filing status as he is no longer married and cannot use head of household because he has no children.
- A divorced couple has one child. The husband, who is the noncustodial parent, will claim an exemption for the child. Which of the following is a valid condition that could allow the wife to claim head of household status?
a. The wife filed a joint return for the year.
b. The wife paid more than half of the cost for the year of keeping up the home in which she and her child lived.
c. The wife’s home was not the main home for her child for more than half the year.
d. The child was not the wife’s qualifying child.
(Search Chapter 2)
Answer: b. The wife paid more than half of the cost for the year of keeping up the home in which she and her child lived.
- Your client is preparing to file a tax return. What condition would prevent her from filing head of household status?
a. Your client used single filing status last year.
b. Your client paid over half the cost of keeping up a home that was the main home for the whole year of her father, who can be claimed as her dependent, other than under a multiple support agreement. The father did not live with your client.
c. Your client’s daughter is 24, was a full-time student for the whole year, and earned $4,800 from her part-time waitress job.
d. Your client’s daughter is married filing jointly only to claim a refund, and no tax liability exists for the daughter or the daughter’s husband, if separate returns are filed.
(Search Chapter 2)
Answer: c. Your client’s daughter is 24, was a full-time student for the whole year, and earned $4,800 from her part-time waitress job.
That’s correct! Even though she was a full-time student, at age 24 the daughter is too old to be claimed as a qualifying child. Her income of $4,800 exceeds the $4,300 threshold that would allow her to be claimed as a qualifying relative.
- Jack qualifies to file as head of household and has no earned income, but he correctly releases the dependency exemption for the couple’s qualifying six-year-old child over to his ex-spouse, Dianne. According to Scenario 2 in the text, which of the following credits/deductions is Jack still entitled to?
a. dependent exemption
b. American opportunity tax credit
c. dependent care credit
d. earned income credit (even though he has no earned income for the year)
(Search Chapter 3)
Answer: c. dependent care credit
- Bill and Ben are a same-sex couple, who were married in Massachusetts and lived in Alabama for the entire year with only Alabama income, will need to file:
a. a married filing jointly return to the IRS and a married filing jointly return to Massachusetts
b. a married filing jointly return to the IRS and a married filing jointly return to Alabama
c. a married filing jointly return to the IRS and two single returns for Alabama
d. two single returns for the IRS and two single returns for Alabama
(Search Chapter 4)
Answer: b. a married filing jointly return to the IRS and a married filing jointly return to Alabama
Test
1. A client lived with her husband for five months of the year and then moved into an apartment, leaving her daughter with her husband who claims the child as a dependent. Without any additional information, which filing status is definitely not available to the husband?
(Search Chapter 1)
- a. married filing jointly
- b. married filing separately
- c. head of household
- d. qualifying widower
My Answer: d. qualifying widower
Correct
Test
2. A husband and wife file married filing separately for tax year 2021. Within three years, they can generally amend their return to file as:
(Search Chapter 1)
- a. married filing jointly
- b. married filing as head of household
- c. cannot amend their return
- d. single
My Answer: a. married filing jointly
Correct
Test
3. Which of the following would prevent your client, whose spouse died in 2019, from filing as qualified widow for 2021?
(Search Chapter 1)
- a. She did not remarry in 2020.
- b. She has one dependent child to claim in 2021.
- c. She paid over half the cost of keeping up the home in 2021.
- d. She remarried in 2021.
My Answer: d. She remarried in 2021.
Correct
Test
4. Which of the following is not one of the tests used to determine whether a given individual is a qualifying child?
(Search Chapter 2)
- a. relationship
- b. gross income
- c. support
- d. age
My Answer: b. gross income
Correct
Test
5. Jim and Rhoda are living apart and discovered that both of them claimed their daughter, Linda, as a dependent. There is no formal custody agreement in place, and Linda lived with Jim from January to May and with Rhoda from June to December. Jim’s AGI last year was $46,000, and Rhoda’s was $42,000. When the IRS applies its tiebreaker rules to the situation, which parent is likely to receive the benefit of claiming Linda as a dependent and why?
(Search Chapter 2)
- a. Jim, because his AGI is higher
- b. Rhoda, because her AGI is lower
- c. Rhoda, because Linda lived with her longer than she lived with Jim
- d. Jim, because he is still living in the family home
My Answer: c. Rhoda, because Linda lived with her longer than she lived with Jim
Correct
Test
6. Which of the following is not one of the tests used to determine whether a given individual is a qualifying relative?
(Search Chapter 2)
- a. support
- b. gross income
- c. joint return
- d. relationship
My Answer: c. joint return
Correct
Test
7. For single-parent situations, it’s important that tax professionals ask questions about other members of the household to determine:
(Search Chapter 3)
- a. whether they are qualifying children
- b. whether they are qualifying relatives
- c. whether any tax credits/deductions have been assigned to another party
- d. all of the above
My Answer: d. all of the above
Correct
Test
8. According to his parents’ divorce decree, Craig’s father, Kevin, is his custodial parent. Last year Craig spent every night from January to July with Kevin in Kevin’s house. The only exceptions were when Craig went on spring break vacation with his father for two weeks in Hawaii and when Kevin was away from home for a week at a convention in New York. For the purpose of providing supporting documentation in case Kevin’s deductions for his son are ever questioned, how many nights is Craig regarded to have lived with his father last year, given that January 1 to July 31 represents a total of 212 nights?
(Search Chapter 3)
- a. 212
- b. 205
- c. 201
- d. 224
WRONG
My Answer: a. 205
Test
9. While the same-sex married couple Marissa and Heather both understand that the recent change in tax law allows them to amend their prior year federal tax returns, they are unsure whether or not it is to their advantage to do so. Which of the following factors related to their prior returns could influence their decision?
(Search Chapter 4)
- a. Heather paid to have Marissa covered under her employer’s health plan.
- b. Marissa has not filed a tax return for the past three years because her only income was alimony that was below the filing threshold for a single taxpayer.
- c. Heather has claimed Marissa as a dependent for the past three years.
- d. all of the above
My Answer: d. all of the above
Correct
