Question 1

The failure to file penalty is ________ of the tax shown on the return for each month (or fraction of a month)the tax return is not filed,up to a maximum of 25%.
A) 0.25%
B) 0.5%
C) 5.0%
D) 5.5%

Accepted Answer

The failure to file penalty is 5% of the tax shown on the return for each month (or fraction of a month) the tax return is not filed, up to a maximum of 25%.

Question 2

The interest charged by the IRS for the first three months of 2014 was:
A) 3%.
B) 5%.
C) 4%.
D) 6%.

Accepted Answer

The IRS interest rate for the first quarter of 2014 was 3% for overpayments and underpayments.

Question 3

Luisa's parents can claim her as a dependent on their tax return.In 2014,her only source of income was a part-time job as a medical clerk where she earned $2,500 during the year.What is Luisa's standard deduction?
A) $2,500.
B) $3,950.
C) $1,000.
D) $2,850.

Accepted Answer

The answer of Luisa's parents can claim her as a...

Question 4

When a taxpayer can be claimed as a dependent on the tax return of another individual,the basic standard deduction for the taxpayer is limited to the greater of (a)______,or (b)the taxpayer's earned income plus $350,but not more than the amount of the basic standard deduction.
A) $950
B) $900
C) $1,000
D) $350

Accepted Answer

The answer of When a taxpayer can be claimed as...

Question 5

John forgot to file his tax return by April 15.He did not file an extension.John finally filed his tax return on June 30 and had a remaining tax liability of $1,500.What is John's failure to file penalty? Assume he made all his payments on time.
A) $375.
B) $225.
C) $233.
D) $300.

Accepted Answer

The failure to file penalty is calculated as 5% of the unpaid tax liability per month, up to a maximum of 25%. Since John filed his return 2.5 months late (June 30 - April 15 = 2.5), the penalty would be 12.5% (2.5 months x 5% per month). Therefore, the penalty would be $187.50 (12.5% x $1,500).

Question 6

The IRS can impose a _______ penalty on any portion of understatement of tax that is attributable to fraud.
A) 25%
B) 75%
C) 50%
D) 5%

Accepted Answer

The IRS can impose a 75% penalty on any portion of understatement of tax that is attributable to fraud. This is a significant penalty designed to deter fraudulent reporting on tax returns.

Question 7

What is the amount of the tax liability for a single person having taxable income of $59,200? All answers should be rounded to the nearest dollar.
A) $10,656.
B) $9,100.
C) $10,663.
D) $14,800.

Accepted Answer

Using the 2021 tax tables for a single individual, the tax liability for a taxable income of $59,200 would be $10,663. This calculation takes into account the standard deduction and tax brackets for that income level. Therefore, choice C is the correct answer.

Question 8

A single taxpayer is 35 years old and has only wages of $14,000.Which is the simplest form this person can file?
A) 1040A.
B) 1040ES.
C) 1040.
D) 1040EZ.

Accepted Answer

The person's income is below $100,000 and only consists of wages, which makes them eligible to file a 1040EZ form.

Question 9

The taxpayer's spouse died at the beginning of 2014.He has no qualifying child.Which status should the taxpayer select when filing his tax return?
A) Single.
B) Qualifying Widow(er).
C) Married Filing Separately.
D) Married Filing Jointly.

Accepted Answer

The answer of The taxpayer's spouse died at the beginning...

Question 10

Failure to make required estimated payments will subject the taxpayer to a potential underpayment penalty plus interest.However,if the difference between the tax shown on the return and the amount of tax withheld for wages is less than ______,the taxpayer will not be assessed a penalty.
A) $1,250
B) $500
C) $850
D) $1,000

Accepted Answer

The answer of Failure to make required estimated payments will...

Question 11

The early withdrawal penalty is a for AGI deduction.Which form can the taxpayer use to claim this benefit?
A) 1040EZ.
B) 1040A.
C) 1040.
D) 1040A or 1040.

Accepted Answer

The early withdrawal penalty is reported on Form 1040, as it allows for a broader range of deductions and credits compared to the more simplified forms 1040EZ and 1040A, which have been phased out and replaced by a redesigned Form 1040.

Question 12

Which condition listed below is not required for a taxpayer to qualify as a qualifying widow(er)with dependent child?
A) The household was the principal place of abode for the entire year of both the taxpayer and his or her child.
B) Taxpayer must remarry before the end of the tax year in question.
C) Taxpayer paid more than half the cost of keeping up a household.
D) Taxpayer was eligible to file a joint return in the year the spouse died.

Accepted Answer

The correct condition that is not required for a taxpayer to qualify as a qualifying widow(er) with dependent child is "B) Taxpayer must remarry before the end of the tax year in question." The other three conditions are required for a taxpayer to be considered a qualifying widow(er) with dependent child: A) The household was the principal place of abode for the entire year of both the taxpayer and his or her child, C) Taxpayer paid more than half the cost of keeping up a household, and D) Taxpayer was eligible to file a joint return in the year the spouse died.

Question 13

A 37-year-old taxpayer with a dependent child and claiming head of household status has received $21,000 in child support payments and earned wages of $46,000.Which is the simplest form this person can file?
A) 1040A.
B) 1040.
C) 1040ES.
D) 1040EZ.

Accepted Answer

The answer of A 37-year-old taxpayer with a dependent child...

Question 14

What is the amount of the tax liability for a qualifying widow(er)with a dependent child and having taxable income of $121,600? All answers should be rounded to the nearest dollar.
A) $25,234.
B) $22,113.
C) $30,400.
D) $27,665.

Accepted Answer

According to the 2021 tax tables, a qualifying widow(er) with a dependent child and taxable income of $121,600 would have a tax liability of $22,113. This is calculated by first calculating the tax on the first $81,050 of taxable income at a rate of 24% ($19,452), then calculating the tax on the remaining $40,550 of taxable income at a rate of 32% ($12,661). Adding these two amounts gives a total tax liability of $22,113.

Question 15

What is the amount of the tax liability for a qualifying widow(er)with a dependent child and having taxable income of $18,355? All answers should be rounded to the nearest dollar.
A) $1,836.
B) $2,331.
C) $2,149.
D) $1,849.

Accepted Answer

The answer of What is the amount of the tax...

Question 16

What is the amount of the tax liability for a head of household person having taxable income of $87,573? All answers should be rounded to the nearest dollar.
A) $16,306.
B) $13,136.
C) $12,498.
D) $16,398.

Accepted Answer

The correct answer is A. The tax liability for a head of household person having taxable income of $87,573 is $16,306.

Question 17

Ed's parents can claim him as a dependent on their tax return.In 2014,his only source of income was $1,050 of interest income received from Global Bank.What is Ed's standard deduction?
A) $1,000.
B) $1,050.
C) $3,900.
D) $350.

Accepted Answer

Ed's standard deduction is the greater of $1,000 or his earned income plus $350, up to a maximum of $6,300. However, since Ed's earned income is only $1,050 (which is less than the standard deduction), his standard deduction will be $1,000.

Question 18

What is the amount of the social security wage limitation for 2014?
A) $106,800.
B) $110,100.
C) $113,700.
D) $117,000.

Accepted Answer

The answer of What is the amount of the social...

Question 19

What is the amount of the tax liability for a married couple having taxable income of $153,500? All answers should be rounded to the nearest dollar.
A) $38,375.
B) $30,227.
C) $30,233.
D) $23,025.

Accepted Answer

The answer of What is the amount of the tax...

Question 20

Criminal penalties only apply to:
A) Careless disregard for tax authority.
B) Willful failure to file a return.
C) Tax evasion.
D) Willful failure to file a return and tax evasion.

Accepted Answer

Criminal penalties in the context of taxation typically apply to intentional acts of non-compliance, such as willful failure to file a tax return and tax evasion. These actions demonstrate a deliberate attempt to avoid tax obligations.

Quiz 2: Expanded Tax Formula, Forms 1040a and 1040, and Basic Concepts

The failure to file penalty is ________ of the tax shown on the return for each month (or fraction of a month) the tax return is not filed,up to a maximum of 25%.

The interest charged by the IRS for the first three months of 2014 was:

Luisa's parents can claim her as a dependent on their tax return.In 2014,her only source of income was a part-time job as a medical clerk where she earned $2,500 during the year.What is Luisa's standard deduction?

When a taxpayer can be claimed as a dependent on the tax return of another individual,the basic standard deduction for the taxpayer is limited to the greater of (a) ______,or (b) the taxpayer's earned income plus $350,but not more than the amount of the basic standard deduction.

John forgot to file his tax return by April 15.He did not file an extension.John finally filed his tax return on June 30 and had a remaining tax liability of $1,500.What is John's failure to file penalty? Assume he made all his payments on time.

The IRS can impose a _______ penalty on any portion of understatement of tax that is attributable to fraud.

What is the amount of the tax liability for a single person having taxable income of $59,200? All answers should be rounded to the nearest dollar.

A single taxpayer is 35 years old and has only wages of $14,000.Which is the simplest form this person can file?

The taxpayer's spouse died at the beginning of 2014.He has no qualifying child.Which status should the taxpayer select when filing his tax return?

Failure to make required estimated payments will subject the taxpayer to a potential underpayment penalty plus interest.However,if the difference between the tax shown on the return and the amount of tax withheld for wages is less than ______,the taxpayer will not be assessed a penalty.

The early withdrawal penalty is a for AGI deduction.Which form can the taxpayer use to claim this benefit?

Which condition listed below is not required for a taxpayer to qualify as a qualifying widow(er) with dependent child?

A 37-year-old taxpayer with a dependent child and claiming head of household status has received $21,000 in child support payments and earned wages of $46,000.Which is the simplest form this person can file?

What is the amount of the tax liability for a qualifying widow(er) with a dependent child and having taxable income of $121,600? All answers should be rounded to the nearest dollar.

What is the amount of the tax liability for a qualifying widow(er) with a dependent child and having taxable income of $18,355? All answers should be rounded to the nearest dollar.

What is the amount of the tax liability for a head of household person having taxable income of $87,573? All answers should be rounded to the nearest dollar.

Ed's parents can claim him as a dependent on their tax return.In 2014,his only source of income was $1,050 of interest income received from Global Bank.What is Ed's standard deduction?

What is the amount of the social security wage limitation for 2014?

What is the amount of the tax liability for a married couple having taxable income of $153,500? All answers should be rounded to the nearest dollar.

Criminal penalties only apply to: