HS 321 Chapter 4

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SAngell3
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144770
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HS 321 Chapter 4
Updated:
2012-03-30 14:27:56
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HS 321 Chapter 4
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  1. A deductible contribution to an IRA is an above-the-line deduction.

    a) True
    b) False
    a) True
  2. The standard deduction for all individual taxpayers is $3,000.

    a) True
    b) False
    b) False

    The standard deduction amount varies according to the taxpayer's filing status. These amounts are indexed annually for inflation.
  3. For the 2011 tax year, taxpayers with adjusted gross income over $150,000 are subject to an overall limitation on their itemized deductions.

    a) True
    b) False
    b) False

    For 2011 there is not a limitation on itemized deductions as had been in prior tax years.
  4. A taxpayer who may be claimed as a dependent of another taxpayer will also be entitled to a personal exemption for himself or herself.

    a) True
    b) False
    b) False

    If a taxpayer can be claimed as a dependent of another taxpayer, that person is not entitled to a personal exemption for himself or herself.
  5. In order for an individual to be treated as a qualifying child of the taxpayer under the dependency exemption rules, the individual must not have provided more than half of his or her own support during the year.

    a) True
    b) False
    a) True
  6. A father can claim a dependency exemption for his 18-year-old married daughter who files a joint return with her spouse who has substantial income.

    a) True
    b) False
    b) False

    A taxpayer may generally not claim a personal exemption for a child who is married and files a joint return with his or her spouse.
  7. The phaseout of a deduction or a tax credit can increase the effective rate of tax that taxpayers actually pay.

    a) True
    b) False
    a) True
  8. A noncustodial parent may claim the child as a dependent if the custodial parent signs a written declaration agreeing not to claim the exemption for that year.

    a) True
    b) False
    a) True
  9. The lowest marginal rate of tax on ordinary income is currently 25 percent.

    a) True
    b) False
    b) False

    The lowest marginal rate is currently 10 percent.
  10. To file as a surviving spouse, a taxpayer must maintain a residence for a child of the taxpayer for whom he or she is entitled to a dependency exemption.

    a) True
    b) False
    a) True
  11. A taxpayer can qualify as a head of household by maintaining a parent in a nursing home.

    a) True
    b) False
    a) True
  12. Under the kiddie tax rules, net unearned income of a child under a specified age is taxed at the marginal rate of the child's parents.

    a) True
    b) False
    a) True
  13. The kiddie tax applies only to income from assets received from a child's parents.

    a) True
    b) False
    b) False

    The kiddie tax rules generally apply to unearned income of a child, regardless of whether the income-producing assets were received from the child's parents.
  14. Corporations are generally required to file tax returns by April 15.

    a) True
    b) False
    b) False

    Corporations are required to file returns by the 15th day of the third month following the close of the taxable year.
  15. Which of the following statements concerning elements of personal income taxation is correct?

    a) The personal exemption amount is a fixed amount not indexed for inflation.
    b) The "kiddie tax" applies to the earned income of children under a specified age. c) Single taxpayers receive the highest standard deduction amount.
    d) The range of taxable income over which specific tax brackets will be applied depends on the filing status of the particular taxpayer(s).
    • d) The range of taxable income over which specific tax brackets will be applied depends on the filing status of the particular taxpayer(s).
    • The personal exemption amount is indexed for inflation.

    The kiddie tax is applicable to the net unearned income of children under a specified age.

    Married taxpayers filing jointly receive the highest standard deduction amount.
  16. In order to be treated as a "qualifying child" of the taxpayer for dependency exemption purposes, an individual must generally meet which of the following tests?Answer
    A) The individual’s gross income for the year must be less than the amount of the personal exemption.
    B) The individual must be under the age of 17.
    C) The taxpayer must provide 100 percent of the individual’s support for the year.
    D) The individual must have the same principal place of abode as the taxpayer for more than half of the taxable year.
    D) The individual must have the same principal place of abode as the taxpayer for more than half of the taxable year.

    The gross income test applies for purposes of determining whether an individual is a "qualifying relative," not a "qualifying child."

    A qualifying child must generally be below the age of 19, not 17. (Different rules apply for full-time students and disabled individuals.)

    The support test for a qualifying child requires only that the individual not provide more than half of his or her own support.
    (this multiple choice question has been scrambled)
  17. How many personal exemptions is a blind, unmarried taxpayer, aged 65 or older, who is not subject to the exemption phaseout rules, entitled to?

    A) The taxpayer is not entitled to any personal exemptions.
    B) The taxpayer is entitled to one personal exemption.
    C) The taxpayer is entitled to two personal exemptions.
    D) The taxpayer is entitled to three personal exemptions.
    B) The taxpayer is entitled to one personal exemption.

    Older or blind taxpayers receive an additional amount in the determination of their standard deduction. However, they do not receive additional personal exemptions.
    (this multiple choice question has been scrambled)
  18. All the following statements concerning personal and dependency exemptions are correct EXCEPT

    A) In order to be claimed as a dependent under the dependency exemption rules, the dependent person must generally not file a joint return with his or her spouse.
    B) Personal and dependency exemptions are subject to a phaseout for all taxpayers for the 2011 and 2012 tax years.
    C) A person who is the dependent of another taxpayer may not claim a personal exemption on his or her own return.
    D) Married taxpayers filing jointly are allowed a personal exemption for each spouse.
    B) Personal and dependency exemptions are subject to a phaseout for all taxpayers for the 2011 and 2012 tax years.

    For 2011 and 2012, exemptions are not subject to a phaseout.
    (this multiple choice question has been scrambled)
  19. All the following statements concerning the time for filing tax returns are correct EXCEPT

    a) Individual tax returns are generally due on or before April 15 of the year following a given tax year.
    b) An automatic extension can be obtained by individuals by filing Form 4868 on or before the due date.
    c) Some corporations may have a tax year that operates on a 12-month period beginning on a day other than January 1. d) A corporation's tax return is generally due on the fifteenth day of the fourth month following the close of the tax year.
    d) A corporation's tax return is generally due on the fifteenth day of the fourth month following the close of the tax year.

    A corporation's return is generally due on the fifteenth day of the third month following the close of its tax year, not the fourth month.

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