Tax Accounting Exam #4 questions with
correct answers.
Individual Income Tax Formula ANS - Income
- Adj to Gross Income
= AGI
-Itemized or standard deductions
-Exemption deductions
=Taxable Income
x Tax Rate
= Federal Income Tax
+Alt. Min. Tax
-Nonrefundable credits
+other taxes
-Fed. Inc. Tax withheld
-Estimated tax payments
-Refundable credits
=(Refund) or tax owed
Additional Stand Deductions: Single, MFJ, HOH, and MFS ANS - => 65: 1500, 1200, 1500, 1200
Blind: 1500, 1200, 1500, 1200
If taxpayer can be claimed by another as a dependent, standard deduction is limited to greater of: ANS -
$1,000 of earned income + $350 but cannot exceed base standard deduction amount of $6100
A child under age 18 whose income doesn't exceed 1/2 of support received or is a full time student
between 19-23, is subject to tax at the parents tax rate to the extent the child's unearned income is
more than $2k ANS - Kiddie Tax
, Tests that must be met to claim dependent ANS - 1) Relationship by blood or marriage
2) Must be citizen or resident of US, Mexico or Canada
3) Joint return test
4) Child cannot provide of 1/2 of his/her own support
5) Child must reside with taxpayer over 1/2 the year
6) Child must be >19 yrs old or full time student >24 yrs old
If dependent is married and filing jointly with spouse, federal income tax must = $0 ANS - Joint Return
Test
Tests for Qualifying Relative ANS - 1) Does not have to be related, but must live with them the entire
year if they are not
2) Citizenship
3) Joint Return tests
4) Taxpayer must provide > 1/2 of dependent
5) Dependent's gross income cannot exceed exemption amount ($3900)
Standard Deduction: Single, MFJ, HOH, & MFS ANS - 6100, 12200, 8950, 6100
Exemption (dependent) ANS - $3900
Child Tax Credit ANS - $1,000 per qualifying child who is also under age 17
Itemized Deductions: Taxes ANS - Deductible: real property taxes, personal property taxes, state and
local income taxes or sales tax
Not Deductible: Federal income tax, FICA taxes, Fed. estate, state inheritance and fed. gift taxes, and
excise taxes
correct answers.
Individual Income Tax Formula ANS - Income
- Adj to Gross Income
= AGI
-Itemized or standard deductions
-Exemption deductions
=Taxable Income
x Tax Rate
= Federal Income Tax
+Alt. Min. Tax
-Nonrefundable credits
+other taxes
-Fed. Inc. Tax withheld
-Estimated tax payments
-Refundable credits
=(Refund) or tax owed
Additional Stand Deductions: Single, MFJ, HOH, and MFS ANS - => 65: 1500, 1200, 1500, 1200
Blind: 1500, 1200, 1500, 1200
If taxpayer can be claimed by another as a dependent, standard deduction is limited to greater of: ANS -
$1,000 of earned income + $350 but cannot exceed base standard deduction amount of $6100
A child under age 18 whose income doesn't exceed 1/2 of support received or is a full time student
between 19-23, is subject to tax at the parents tax rate to the extent the child's unearned income is
more than $2k ANS - Kiddie Tax
, Tests that must be met to claim dependent ANS - 1) Relationship by blood or marriage
2) Must be citizen or resident of US, Mexico or Canada
3) Joint return test
4) Child cannot provide of 1/2 of his/her own support
5) Child must reside with taxpayer over 1/2 the year
6) Child must be >19 yrs old or full time student >24 yrs old
If dependent is married and filing jointly with spouse, federal income tax must = $0 ANS - Joint Return
Test
Tests for Qualifying Relative ANS - 1) Does not have to be related, but must live with them the entire
year if they are not
2) Citizenship
3) Joint Return tests
4) Taxpayer must provide > 1/2 of dependent
5) Dependent's gross income cannot exceed exemption amount ($3900)
Standard Deduction: Single, MFJ, HOH, & MFS ANS - 6100, 12200, 8950, 6100
Exemption (dependent) ANS - $3900
Child Tax Credit ANS - $1,000 per qualifying child who is also under age 17
Itemized Deductions: Taxes ANS - Deductible: real property taxes, personal property taxes, state and
local income taxes or sales tax
Not Deductible: Federal income tax, FICA taxes, Fed. estate, state inheritance and fed. gift taxes, and
excise taxes
