FPQP Model Tax Implication
Which of the following taxes is NOT allowed as an itemized deduction?
A)
Property taxes
B)
State income taxes
C)
FICA taxes
D)
Local income taxes - answerC; fica Taxes
FICA (Social Security) taxes are not allowed as an itemized deduction. The maximum
deduction for all state and local taxes, including property taxes, is $10,000 per year.
Which of the following circumstances would require most taxpayers to file a federal
income tax return?
A)
The taxpayer earned any amount of unearned income.
B)
The taxpayer has dependent children.
C)
The taxpayer's gross income exceeds the standard deduction.
D)
The taxpayer elects to become an expatriate. - answerC)
The taxpayer's gross income exceeds the standard deduction.
A taxpayer is generally required to file a federal income tax return if the taxpayer's gross
income exceeds the standard deduction amount. The other choices listed do not
necessarily affect impact filing requirements.
Which of the following is NOT a filing status for federal income tax purposes?
A)
Qualified disabled
B)
Single
C)
Married filing separately
D)
Married filing jointly - answerA)
Qualified disabled
, What is the significance of a taxpayer supporting a minor child as a dependent for
federal income tax purposes?
A)
The taxpayer cannot use the Single (S) status.
B)
The taxpayer may claim a tax credit for each dependent child under the age of 17.
C)
The taxpayer receives an additional standard deduction.
D)
The taxpayer receives a larger standard deduction. - answerThe taxpayer may claim a
tax credit for each dependent child under the age of 17.
A taxpayer is allowed to claim as a tax credit each person who is a dependent, but does
not automatically receive a larger or additional standard deduction for each dependent.
Taxpayers with children often use the Married Filing Jointly or Head of Household filing
status. However, in the case of a divorced parent who does not have custody or does
not provide more than 50% of the minor's support, the Single (S) filing status may still
be required.
Gross income includes all of the following types of income except
A)
tips.
B)
child support received.
C)
dividends received.
D)
taxable interest. - answerB)
child support received.
Which of the following would be included in calculating a client's gross income?
A)
Inheritances received
B)
Lottery prize money
C)
Life insurance proceeds received upon a person's death
D)
Child support received - answerB)
Lottery prize money
Money from lottery prize winnings is taxable and would be included in a taxpayer's
gross income. The other options listed are generally excluded from a taxpayer's gross
income.
Which of these is an above-the-line deduction?
Which of the following taxes is NOT allowed as an itemized deduction?
A)
Property taxes
B)
State income taxes
C)
FICA taxes
D)
Local income taxes - answerC; fica Taxes
FICA (Social Security) taxes are not allowed as an itemized deduction. The maximum
deduction for all state and local taxes, including property taxes, is $10,000 per year.
Which of the following circumstances would require most taxpayers to file a federal
income tax return?
A)
The taxpayer earned any amount of unearned income.
B)
The taxpayer has dependent children.
C)
The taxpayer's gross income exceeds the standard deduction.
D)
The taxpayer elects to become an expatriate. - answerC)
The taxpayer's gross income exceeds the standard deduction.
A taxpayer is generally required to file a federal income tax return if the taxpayer's gross
income exceeds the standard deduction amount. The other choices listed do not
necessarily affect impact filing requirements.
Which of the following is NOT a filing status for federal income tax purposes?
A)
Qualified disabled
B)
Single
C)
Married filing separately
D)
Married filing jointly - answerA)
Qualified disabled
, What is the significance of a taxpayer supporting a minor child as a dependent for
federal income tax purposes?
A)
The taxpayer cannot use the Single (S) status.
B)
The taxpayer may claim a tax credit for each dependent child under the age of 17.
C)
The taxpayer receives an additional standard deduction.
D)
The taxpayer receives a larger standard deduction. - answerThe taxpayer may claim a
tax credit for each dependent child under the age of 17.
A taxpayer is allowed to claim as a tax credit each person who is a dependent, but does
not automatically receive a larger or additional standard deduction for each dependent.
Taxpayers with children often use the Married Filing Jointly or Head of Household filing
status. However, in the case of a divorced parent who does not have custody or does
not provide more than 50% of the minor's support, the Single (S) filing status may still
be required.
Gross income includes all of the following types of income except
A)
tips.
B)
child support received.
C)
dividends received.
D)
taxable interest. - answerB)
child support received.
Which of the following would be included in calculating a client's gross income?
A)
Inheritances received
B)
Lottery prize money
C)
Life insurance proceeds received upon a person's death
D)
Child support received - answerB)
Lottery prize money
Money from lottery prize winnings is taxable and would be included in a taxpayer's
gross income. The other options listed are generally excluded from a taxpayer's gross
income.
Which of these is an above-the-line deduction?
