ACC MISC 2021 final exam Personal Income Tax Return

Question 1 Question 2 Question 3 An individual can choose to le as Married Filing Separately if: Select one: a. They are divorced as evidenced by a nal divorce decree dated no later than September 30 of the tax year b. They are considered married on the last day of the tax year because they meet one of the tests for being considered married c. Their spouse died during the previous tax year d. They lived apart from their boyfriend for at least the last 6 months of the tax year Bob Jonas is a single parent who has been divorced for two years and who provides a home for his 10-year old dependent son. What ling status should Bob use? Select one: a. Married Filing Separate b. Head of Household c. Single d. Qualifying Widow(er) Ms. Sue Smith's husband passed away on March 6, of the previous tax year and Ms. Smith has not remarried. She maintains a home for herself and her 15-year old son. Ms. Smith provided over half of her son's support and he lived with her all year. What ling status should Ms. Smith use when ling her tax return for the tax year that her husband passed away? Select one: a. Qualifying Widow(er) b. Single c. Married Filing Joint d. Head of Household 12/21/2020 Final Exam Question 4 Question 5 Question 6 Question 7 IRS Form 1040EZ was replaced by: Select one: a. Form 1040A b. Schedule 1 c. Form 1040 d. Form 1040EZ will not be replaced. Form 1040X is used to: Select one: a. Amend a U.S. Individual Income Tax Return. b. Request an extension to le a U.S. Individual Income Tax Return. c. Report Self-Employment Income. d. Report Income When the Taxpayer Does Not Have a Social Security Number. Which of the following organizations/entities will qualify as a charitable organization so that contributions can qualify as charitable giving? Select one: a. A religious Temple b. A nonprot cemetery company c. A nonprot organization for the prevention of cruelty to animals d. All of the above may qualify e. None of the above qualify The Age Test for a child to qualify as a dependent varies depending upon the tax benet involved. In general, a child must be under the age of ___ (or under age 24 in the case of a full-time student) in order to be a qualifying child. Select one: a. 17 b. 16 c. 18 d. 19 12/21/2020 Final Exam Question 8 Question 9 Question 10 Question 11 Tip income is reported on Form 1040 as: Select one: a. Wages b. Self-Employment Income c. Not reported on Form 1040 d. None of the Above Generally, interest earned on obligations (typically municipal bonds) used to nance government operations, is not taxable by the federal government if the obligations are issued by Select one: a. The State that the taxpayer is a resident of b. Puerto Rico c. The U.S. Treasury d. All of the above Schedule B, Interest and Ordinary Dividends, is led by taxpayers that have earned over $1,500 in interest and ordinary dividends over the course of the tax year. Which of the following situations will also require a taxpayer to complete and le Schedule B? Select one: a. The taxpayer received interest from a seller-nanced mortgage and the buyer used the property as a personal residence b. The taxpayer has accrued interest from a bond c. The taxpayer received interest or ordinary dividends as a nominee d. All of the above Features of the Roth IRA include: Select one: a. Qualied distributions are tax free b. Income taxes are paid up front c. Principal grows tax free d. All of the above 12/21/2020 Final Exam Question 12 Question 13 Question 14 Question 15 An individual may be able to treat a contribution made to one type of IRA as having been made to a different type of IRA. This is called recharacterizing the contribution. To re-characterize a contribution one generally must have the contribution transferred from the rst IRA (the one to which it was made) to the second IRA in a ___________ transfer. Select one: a. Rollover b. Trustee to trustee transfer c. Wire transfer d. All of the above If a taxpayer receives a Form 1099-INT that includes interest received as a _________ (that is, in their name, but the interest actually belongs to someone else), report the total on line 1 of Schedule B. Do this even if you later distributed some or all of this income to others. Select one: a. Distributee b. Nominee c. Trustor d. Trustee Most individual taxpayers use the cash method to report income. Interest income is generally reported in the year that it is actually or _________ received, and it does not matter if they do not yet have physical possession of it. Select one: a. Developmentally b. Constructively c. Alternately d. Generally A taxpayer can le up to _______ Form 1040 tax returns per tax year. Select one: a. One b. Five c. Two d. Unlimited 12/21/2020 Final Exam Question 16 Question 17 Question 18 Question 19 In most cases, because of the Residency Test, a child of divorced or separated parents is the qualifying child of the custodial parent for purposes of determining dependency. However the child will be treated as the qualifying child of the noncustodial parent if certain conditions are met and the following occurs (when the decree or agreement went into effect after 1984): Select one: a. The custodial parent signs a written declaration that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return b. The custodial parent enters into a verbal agreement with the noncustodial parent allowing the noncustodial parent to claim the child as a dependent for the year c. The noncustodial parent can prove that he/she has provided over half the support for the child and les a written declaration with his/her tax return stating this fact d. The noncustodial parent les his or her tax return rst and les a decree with the tax return stating that the "tie-breaker" rule applies to the situation An individual cannot claim a person as a dependent unless that person is their ______ ______ or ______ ________ and meets the tests established for each. Select one: a. Qualifying Child / Qualifying Parent b. Qualifying Relative / Qualifying Dependent c. Qualifying Dependent / Qualifying Relative d. Qualifying Child / Qualifying Relative To identify the child care provider on a tax return, they taxpayer must give the provider's Select one: a. Name b. Address c. Taxpayer Identication Number d. All of the above must be provided Which of the following will affect the standard deduction amount that a taxpayer is eligible for? Select one: a. Filing status 12/21/2020 Final Exam Question 20 Question 21 Question 22 Question 23 b. Whether or not a deduction can be claimed for someone by another taxpayer. c. Age d. None of the above has an effect on standard deduction e. Answers A and C Which test(s) must be met for a taxpayer to deduct any tax? Select one: a. The tax must be imposed on an individual b. An individual must pay the tax during the tax year c. The tax must be signicant d. A and B are correct e. All of the above For how many years, after being eligible to le a joint return with your deceased spouse, may a person use the Qualifying Widow(er)ling status? Select one: a. Three Years b. Two Years c. Four Years d. Seven years Even taxpayers that would not normally need to le a tax return, should le one when the following is true? Select one: a. If the taxpayer is owed a refund from taxes paid b. If a taxpayer is eligible for a refundable credit c. If a taxpayer needs to only make a tax payment d. If self-employment income exceeds $200.00 e. Only A and B above should le a tax return Which dependent relative does not have to live in the same household for the taxpayer to claim Head of Household ling status? 12/21/2020 Final Exam Question 24 Question 25 Question 26 Question 27 Select one: a. Cousin b. Aunt c. Brother d. Father Which form(s) can be used to le an initial personal income tax return or amend an existing personal income tax return with the IRS? Select one: a. 1040 or 1040X b. 1041, 990 c. 1041 d. 991, 990, 1120 Generally, which of the following items should be included as taxable wages on Form 1040? Select one: a. Severance pay and payments for the cancellation of employment b. Vacation pay received from an employer c. Disability pension received under a plan that is paid by the employer d. All of the above are taxable Which of the following items is not reported as taxable income on Form 1040? Select one: a. Certain military and government disability pensions b. Reimbursement for medical care c. Sick pay received from an employer d. All of the above e. A and B only Anna lives in Tucson, Arizona. Generally, interest earned on obligations (typically bonds) used to nance government operations, are not taxable by the Federal Government if the obligations are issued by 12/21/2020 Final Exam Question 28 Question 29 Question 30 Question 31 Select one: a. The state of Arizona b. Any foreign government c. The U.S. Treasury d. All of the above Which of the following describes Ordinary Dividends? Select one: a. They are taxable income b. They are non-taxable income c. They are tax-exempt income d. None of the above Linda and her sister Hannah own a bed and breakfast hotel in Maine in which they provide maid services and breakfast to their tenants. Which of the following is true regarding the tax return that Linda must le. Select one: a. She must le Schedule C b. She must le Schedule E c. She must le Schedule C and E d. None of the above A conversion from a Traditional IRA to a Roth IRA is treated as a _____. Select one: a. Replacement contribution b. Retirement contribution c. Withdrawal d. Rollover Which of the following statements is false with regards to a Roth IRA? Select one: a. Qualied distributions are tax free 12/21/2020 Final Exam Question 32 Question 33 Question 34 Question 35 b. Contributions can be made to a Roth IRA past the age of 70 1/2 . c. Mandatory distributions from a Roth IRA must start no later than the year the taxpayer reaches the age of 75 1/2. d. All of the above are true Generally, all distributions from a Traditional IRA are _______. Select one: a. Fully-taxable b. Non-taxable c. Non-taxable after age 59 d. Both A and C are correct Clara is receiving pension payments what is/are her option(s) on receiving the payments? Select one: a. Receive monthly payments b. Receive a lump-sum payment c. Receive yearly payments d. Both A and B are correct e. Both B and C are correct. David was not feeling well and contacted his employer to inform her that he would not be in to work. David would have earned $150.00 for the full day of work. His employer pays him the $150.00 he would have earned and notated the payment as sick pay on David's pay stub. David feels better the following day and returns to work. How should David account for the one day of sick pay he received when he les his tax return? Select one: a. The full amount of sick pay will not be reported on his tax return because sick pay is not taxable b. The full amount of sick pay will be reported as taxable income and will be included with his regular wages c. David may need to report a portion of the sick pay as taxable income if the employer designated any portion of the payment as a disability payment d. David will report the sick pay as "miscellaneous income" on his tax return, separate from any wages that will be reported e. None of the above are correct statements 12/21/2020 Final Exam Question 36 Question 37 Question 38 Form _______ reports the total amount received during the tax year from a pension or annuity distribution. Select one: a. 1099R b. 1099B c. W-2 d. 1098B David Ross les as head of household. His income from rentals units was $39,000. How much of his social security benets may be subject to tax? Select one: a. Up to 50 percent b. Up to 85 percent c. Up to 30 percent d. They will not be taxed at all A tax refund from state and local government entities may be taxable in the year it is received. Which of the following statements is correct? Select one: a. If a taxpayer claimed the standard deduction on the prior year federal tax return the state tax refund is not taxable b. If deductions were itemized on the federal tax return from the prior year and a deduction for State and Local Taxes was taken, then the taxpayer needs to determine if any portion of the refund will be taxable in the current year c. Both A and B are correct d. Whether or not the tax refund will be taxable has nothing to do with taking the standard deduction or itemizing deductions, therefore both statements are false An eligible educator, for purposes of the Educator Expense deduction, is a ________ teacher, instructor, counselor, principal, or aide who worked in a school for at least 900 hours during a school year. Select one: a. Kindergarten through grade 12 b. Junior college c. Kindergarten through college d. High school or junior college 12/21/2020 Final Exam Question 39 Question 40 Question 41 Question 42 Expenses related to a move in connection with a job or business may be deducted as an adjustment to income in the following situations Select one: a. Moving expenses incurred for moving across states b. Moving expenses over $2,000 c. Moving expenses over 2% of AGI d. An active-duty member of the U.S. armed forces who moves pursuant to a military order A taxpayer may be able to deduct the amount paid for health insurance for _________, if the taxpayer or spouse was self-employed and had a net prot for the year. Select one: a. Him/herself b. His/her spouse c. His/her dependents d. All of the above Grace entered a divorce agreement on March 2, 2019. Grace Newbury received $4,000.00 in alimony payments and $6,000.00 in child support payments during the tax year. What is the total amount of taxable income from these two sources? Select one: a. $4,000.00 b. $10,000.00 c. $6,000.00 d. $0.00 Rules, related to the TCJA, for the treatment of alimony payments is effective for divorce or separation agreements entered into after December 31, 2018. Under the TCJA: Select one: a. Alimony is treated as taxable income to the receiving spouse and deducted from the gross income of the paying spouse b. Alimony is treated as taxable income to the paying spouse and deducted from the gross income of the receiving spouse c. Recipients do not treat alimony received as taxable income. d. The IRS will only recognize Alimony payments when a traditional male/female relationship existed and when it is the husband of the former relationship that is making payments to the wife 12/21/2020 Final Exam Question 43 Question 44 Question 45 Question 46 Regarding the student loan interest deduction, which of the following statements regarding dependents is true? Select one: a. An individual can be a taxpayer’s dependent unless the individual is a dependent of another taxpayer b. An individual can be a dependent unless the individual les a joint return with a spouse c. An individual can be the taxpayer’s dependent even if the individual had gross income for the year that was equal to or more than the income exemption amount for the year d. All of the statements are false Some states are considered Community Property states. Which of the following is a correct statement regarding ling a tax return in a community property state? Select one: a. Spouses that le as married separate must report ½ of their community income and claim ½ of their deductions on their separate returns. b. In all community property states, the income produced by separate property is considered community property and thus must be apportioned half-and-half to each spouse. c. Spouses that le as married separate report all of their own income and deductions on their separate return. d. Spouses that le as married separate report all of their own income and claim ½ of their deductions on their separate returns. Which of the following is a true statement regarding the paying of estimated taxes? Select one: a. The taxpayer expects to owe at least $100.00 in tax for the tax year, after subtracting any tax withholdings and refundable credits b. Estimated tax payments can only be made annually when Form 1040 is led c. If you are subject to tax withholdings by an employer you will never need to make estimated tax payments d. All of the above statements are false. Which of the following is a true statement in order for a child to be a qualifying child for purposes of the Child Tax Credit? Select one: a. The child must have lived with the taxpayer for the entire year. b. The child must be a U.S. citizen or a U.S. national or a resident of the U.S. c. The child does not need to be claimed as a dependent on the taxpayers tax return. d. The child was under the age of 21 at the end of the tax year. Question 47 Question 48 Question 49 Question 50 To receive the Earned Income Tax Credit (EITC) an individual must provide valid social security numbers for: Select one: a. Themself b. Their spouse (if applicable) c. Any qualifying children (if applicable) d. All of the above. The standard deduction reduces the amount of income that is taxed and eliminates the need for many taxpayers to itemize deductions, because you can take the higher of the two (standard or itemized) deductions. Which of the following situations will increase the standard deduction for certain taxpayers? Select one: a. Taxpayers who are blind. b. Taxpayers who are 60 years of age c. The standard deduction is the same for all taxpayers. d. A and B are correct. Taxpayers can itemize certain tax payments made during the tax year. Which of the following taxes are eligible to be itemized? Select one: a. Medicare Tax b. Drivers License Fees c. Railroad Retirement Taxes (RRTA) d. State Income Tax e. All of the above are eligible Which of the following is considered personal interest and therefore not deductible as eligible interest expense on Schedule A? Select one: a. Interest paid on a used car b. Interest paid on a home mortgage loan for the purchase of your primary residence c. Points paid for a mortgage loan and reported on Form 1098 d. None of the above are considered personal interest and therefore all can be used as itemized expenses e. All of the above are considered personal intere