The Individual Tax Formula

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Questions Bank

Taxes and Taxing Jurisdictions
Policy Standards for a Good Tax
Taxes as Transaction Costs
Maxims of Income Tax Planning
Tax Research
Taxable Income from Business Operations
Property Acquisitions and Cost Recovery Deductions
Property Dispositions
Nontaxable Exchanges
Sole Proprietorships
The Corporate Taxpayer
The Choice of Business Entity
Jurisdictional Issues in Business Taxation
The Individual Tax Formula
Compensation and Retirement Planning
Investment and Personal Financial Planning
Tax Consequences of Personal Activities
The Tax Compliance Process

All Questions

Question 1

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True/False

Harry and Sally were married on December 23, 2017. Their income for the entire year is reported on a joint return.

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Question 2

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True/False

A taxpayer who knowingly signs a joint return on which his spouse has failed to report her income is liable for any tax assessments made by the IRS on that income.

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Question 3

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True/False

Mrs Paley died on July 14, 2017. Her husband has not remarried. The Paleys' two children, ages 34 and 36, are financially independent. Mr Paley may file as a surviving spouse in 2017 and 2018.

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Question 4

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True/False

Charlie is single and provides 100% of the financial support for his dependent mother, Angela, who lives with Charlie. Charlie's filing status is head of household.

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Question 5

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True/False

For the taxable year in which a married person dies, the widow or widower can file a joint return with the deceased.

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Question 6

True/False

In order to be considered a dependent, an individual must be either a qualifying child or a qualifying relative.

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Question 7

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Only natural and adopted children or stepchildren can be a qualifying child for tax purposes.

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Question 8

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Mr and Mrs Queen provide 90% of the financial support for Mrs Queen's mother, Doreen, who lives in the couples' home. Doreen's only income this year is a $7,500 taxable pension from her former employer. Doreen is not considered a dependent of Mr and Mrs Queen this year for tax purposes.

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Question 9

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Jay Blount, 26-years old and a full-time student, lives in his parents' home. Although Jay earned $8,400 from a part-time job, his parents provide at least 75% of his financial support. For tax purposes, this year Jay is considered a dependent of his parents.

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Question 10

True/False

An individual's taxable income equals adjusted gross income less the greater of the standard deduction or itemized deductions less the Section 199A deduction.

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Question 11

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An individual's taxable income equals adjusted gross income less the Section 199A deduction.

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Question 12

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Adjusted gross income equals total income less itemized deductions.

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Question 13

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In computing taxable income, an individual will deduct the lesser of itemized deductions or the standard deduction.

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Question 14

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In computing taxable income, an individual is allowed to deduct both the standard deduction and any itemized deduction for the year.

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Question 15

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Mr Thomas is age 69, has perfect vision, and files as a single taxpayer. His standard deduction for 2018 is $13,600.

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Question 16

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Mr Andrews is age 58, legally blind, and files as a single taxpayer. His standard deduction for 2018 is $12,000.

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Question 17

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Bill and Afton are married and file a joint tax return. Bill is 67 and Afton is 66, and neither is legally blind. Their standard deduction for 2018 is $26,600.

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Question 18

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The majority of individual taxpayers take the standard deduction rather than itemizing.

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Question 19

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The standard deduction for single individuals equals one-half of the standard deduction for married individuals filing jointly.

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Question 20

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An above-the-line deduction reduces both adjusted gross income and taxable income.

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