©THEBRIGHT EXAM SOLUTIONS
11/05/2024 12:06 PM
ACNT 1331: Chapter 1 Exam Questions
With Correct Answers
In December 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law. To the right is a summary of
the tax provisions scheduled to expire in 2025: - answer✔1. Reduction of individuals tax rates
2. Increased standard deduction
3. Suspension of personal exemptions
4. Qualified business income deduction
5. Suspension of itemized deduction phase-out
6. Temporary cap on state and local taxes
7. Suspension of miscellaneous itemized deductions subject to 2% floor
8. Suspension of moving deduction
9. Reduced limits on mortgage interest deduction
10. Restrictions on personal casualty losses
11. Changes in Kiddie Tax
12. Increased AMT exemption and phase-out
13. Increased child tax credit
14. 100% bonus depreciation
Form 1120 - answer✔used for corporate taxpayers, not individuals.
Form 1040-SR - answer✔new form introduced and used by taxpayers over the age of 65
Form 1065 - answer✔partnership income is reported here and is to report the amount of income or loss
plus the allocation of the income or loss to the partners.
Under U.S. tax law, there are five basic taxable or reporting entities. - answer✔They are individuals,
corporations, partnerships, estates, and trusts.
Form 1040 and Form 1040X (amended tax return) - answer✔are used for individual taxpayers.
, ©THEBRIGHT EXAM SOLUTIONS
11/05/2024 12:06 PM
Taxable Income for individuals - answer✔generally includes income from all sources such as wages,
salaries, self-employment earnings, rents, interest, and dividends.
Schedule 1 (attached to form 1040) - answer✔Additional forms of income other than wages, interest,
dividends, distributions from qualified retirement plans such as IRAs and pensions, and Social Security
benefits. Schedule 1 also reports many of the deductions for adjusted gross income.
Schedule 2 (attached to form 1040) - answer✔Additional taxes beyond the basic income tax such as the
alternative minimum tax, self-employment taxes, household employment taxes, and repayments of the
advance premium tax credit.
Schedule 3 (attached to form 1040) - answer✔Credits and other payments other than withholding
including educational credits, the credit for child and dependent care, excess Social Security taxes
withheld, and the net premium tax credit.
There are two categories of deductions for individuals. - answer✔The first category of deductions
includes the deductions for adjusted gross income. The second category is deductions from adjusted
gross income which includes itemized deductions
Deductions for adjusted gross income - answer✔include deductions for trade or business expenses,
certain reimbursed employee business expenses paid under an accountable plan, pre-2019 alimony
payments, certain educator expenses, student loan interest, the penalty on early withdrawal from
savings, and contributions to qualified retirement plans.
The amount of adjusted gross income is sometimes referred to as the - answer✔"magic line"
Gross Income Formula - answer✔Gross Income
- Deductions for Adjusted Gross Income
= Adjusted Gross Income
- Greater of Itemized Deductions or the Standard Deduction
- Qualified Business Income Deduction
= Taxable Income
x Tax Rate (using appropriate tax tables or rate schedules)
= Gross Tax Liability
- Tax credits and Prepayments
= Tax Due or Refund
Deductions from adjusted gross income which includes - answer✔itemized deductions. Itemized
deductions are personal expense items that Congress has allowed as tax deductions.
11/05/2024 12:06 PM
ACNT 1331: Chapter 1 Exam Questions
With Correct Answers
In December 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law. To the right is a summary of
the tax provisions scheduled to expire in 2025: - answer✔1. Reduction of individuals tax rates
2. Increased standard deduction
3. Suspension of personal exemptions
4. Qualified business income deduction
5. Suspension of itemized deduction phase-out
6. Temporary cap on state and local taxes
7. Suspension of miscellaneous itemized deductions subject to 2% floor
8. Suspension of moving deduction
9. Reduced limits on mortgage interest deduction
10. Restrictions on personal casualty losses
11. Changes in Kiddie Tax
12. Increased AMT exemption and phase-out
13. Increased child tax credit
14. 100% bonus depreciation
Form 1120 - answer✔used for corporate taxpayers, not individuals.
Form 1040-SR - answer✔new form introduced and used by taxpayers over the age of 65
Form 1065 - answer✔partnership income is reported here and is to report the amount of income or loss
plus the allocation of the income or loss to the partners.
Under U.S. tax law, there are five basic taxable or reporting entities. - answer✔They are individuals,
corporations, partnerships, estates, and trusts.
Form 1040 and Form 1040X (amended tax return) - answer✔are used for individual taxpayers.
, ©THEBRIGHT EXAM SOLUTIONS
11/05/2024 12:06 PM
Taxable Income for individuals - answer✔generally includes income from all sources such as wages,
salaries, self-employment earnings, rents, interest, and dividends.
Schedule 1 (attached to form 1040) - answer✔Additional forms of income other than wages, interest,
dividends, distributions from qualified retirement plans such as IRAs and pensions, and Social Security
benefits. Schedule 1 also reports many of the deductions for adjusted gross income.
Schedule 2 (attached to form 1040) - answer✔Additional taxes beyond the basic income tax such as the
alternative minimum tax, self-employment taxes, household employment taxes, and repayments of the
advance premium tax credit.
Schedule 3 (attached to form 1040) - answer✔Credits and other payments other than withholding
including educational credits, the credit for child and dependent care, excess Social Security taxes
withheld, and the net premium tax credit.
There are two categories of deductions for individuals. - answer✔The first category of deductions
includes the deductions for adjusted gross income. The second category is deductions from adjusted
gross income which includes itemized deductions
Deductions for adjusted gross income - answer✔include deductions for trade or business expenses,
certain reimbursed employee business expenses paid under an accountable plan, pre-2019 alimony
payments, certain educator expenses, student loan interest, the penalty on early withdrawal from
savings, and contributions to qualified retirement plans.
The amount of adjusted gross income is sometimes referred to as the - answer✔"magic line"
Gross Income Formula - answer✔Gross Income
- Deductions for Adjusted Gross Income
= Adjusted Gross Income
- Greater of Itemized Deductions or the Standard Deduction
- Qualified Business Income Deduction
= Taxable Income
x Tax Rate (using appropriate tax tables or rate schedules)
= Gross Tax Liability
- Tax credits and Prepayments
= Tax Due or Refund
Deductions from adjusted gross income which includes - answer✔itemized deductions. Itemized
deductions are personal expense items that Congress has allowed as tax deductions.
