Question 1

A casualty or theft loss is difficult to qualify for because the loss must

Accepted Answer

A casualty or theft loss must be both unreimbursed and exceed 10 percent of adjusted gross income plus $100 to qualify for a deduction on income taxes. Option A alone is not enough to qualify, and options B and C are incorrect.

Question 2

Iris Rosales is an unmarried college student age 21,and is claimed as a dependent on her married parents' tax return.What is the maximum number of personal exemptions Iris can legally claim on her own tax return?

Accepted Answer

As Iris is claimed as a dependent on her parents' tax return, she cannot claim a personal exemption for herself on her own tax return. Therefore, the maximum number of personal exemptions that Iris can legally claim on her own tax return is zero.

Question 3

Numerous job-related expenses can potentially be deducted from federal income taxes as ____ expenses.

Accepted Answer

Job-related expenses can potentially be deducted from federal income taxes as miscellaneous expenses. Examples of these expenses include job-search expenses, professional dues, and work-related travel expenses. It is important to note that there are limitations on what can be deducted and specific eligibility requirements, so it is best to consult with a tax professional for guidance.

Question 4

Which of the following types of subtractions cannot be taken by a taxpayer if he or she itemizes deductions?

Accepted Answer

If a taxpayer itemizes deductions, they cannot take the standard deduction. Adjustments to income, exemptions, and tax credits are all separate from the standard deduction and can still be taken by a taxpayer who itemizes deductions.

Question 5

Melissa and Martin McArthur incurred the following interest expenditures:

Accepted Answer

The answer of Melissa and Martin McArthur incurred the following...

Question 6

Which of the following types of taxes is deductible for federal income tax purposes?

Accepted Answer

Real estate property taxes are deductible for federal income tax purposes. Federal income taxes, Federal Social Security taxes, and Federal excise taxes on tires are not deductible for federal income tax purposes.

Question 7

Which of the following expenses on a home is not tax deductible annually?

Accepted Answer

Homeowners insurance premium is not tax deductible annually. Interest paid on a first or second mortgage and property taxes are deductible, subject to certain limitations.

Question 8

Which of the following job-related apparel is most likely to qualify as a deductible expense?

Accepted Answer

Safety goggles for a welder are necessary for the job and can only be used for professional purposes. Therefore, they would qualify as a deductible expense. The other options are less likely to qualify since they can be used for personal purposes as well.

Question 9

Sal is a 27-year-old single taxpayer in the 28 percent marginal tax bracket.Assuming Sal's standard deduction is $5,800 and she has itemized deductions totaling $6,500,Sal should take the ____ for the additional tax savings of ____.

Accepted Answer

Since Sal's itemized deductions ($6,500) exceed her standard deduction ($5,800), she should take her itemized deductions. The additional tax savings would be equal to the difference between her itemized deductions and the standard deduction, which is $700 ($6,500 - $5,800). Therefore, Sal should take the itemized deduction for the additional tax savings of $196.

Question 10

Sally McKrachen is a single young professional with a gross income of $51,000.Sally has no adjustments to gross income,but she does have itemized deductions totaling $4,275.If personal exemptions for the year are $3,700 each and the standard deduction is $5,800,what is Sally's taxable income?

Accepted Answer

Sally should choose the higher of her itemized deductions ($4,275) or the standard deduction ($5,800) to lower her taxable income. Since the standard deduction is higher, she will use that. Subtracting the standard deduction ($5,800) and the personal exemption ($3,700) from her gross income ($51,000) gives her a taxable income of $51,000 - $5,800 - $3,700 = $41,500.

Question 11

It is possible to deduct some types of transportation expenses with all of the following itemized deductions except

Accepted Answer

Transportation expenses related to home buying, such as moving expenses, can be deducted as part of the moving expenses deduction. However, transportation expenses are not typically deductible as medical expenses, job expenses, or charitable contributions.

Question 12

Interest penalties for early withdrawal of savings from certificates of deposit are

Accepted Answer

Interest penalties for early withdrawal of savings from certificates of deposit are subtractable as an adjustment to gross income, which means they can be deducted to arrive at the adjusted gross income (AGI).

Question 13

Total itemized deductions must be ____ to reduce your tax liability.

Accepted Answer

To reduce your tax liability, you need to have itemized deductions that are greater than your standard deduction. This is because if your itemized deductions are less than your standard deduction, you would be better off taking the standard deduction.

Question 14

Which of the following is not a deductible medical expense?

Accepted Answer

Funeral expenses are not considered deductible medical expenses.

Question 15

Marla and Victor Zapata have the following eligible miscellaneous itemized deductions:
​

They have an adjusted gross income of $63,000 and other itemized deductions of $8,580.How much of the above miscellaneous expenses can they add to their other itemized deductions?

Accepted Answer

The total amount of eligible miscellaneous deductions is $19,652. However, these deductions are only deductible to the extent that they exceed 2% of adjusted gross income (AGI). In this case, 2% of $63,000 is $1,260. Therefore, the amount of miscellaneous deductions that Marla and Victor can add to their other itemized deductions is $8,580 (their total itemized deductions) minus $1,260 (2% of their AGI) which equals $7,320.

Out of the given options, the closest amount to $7,320 is $3,706 (Option B). Therefore, Option B is the correct answer.

Question 16

A donation of old toys and clothes to the Salvation Army valued at $500 will save a single taxpayer in the 33 percent marginal tax bracket

Accepted Answer

The donation provides a tax deduction, not a tax credit. A $500 deduction saves $500 * 33% = $165 in taxes, assuming the taxpayer itemizes deductions and exceeds the standard deduction threshold.

Question 17

Mike has a chronic illness.He had an adjusted gross income of $42,000.During the year he incurred unreimbursed expenses of $2,500 on prescription drugs,$3,500 on doctor and dentist bills,$2,400 on health insurance premiums,and $250 on medical related transportation costs.Assuming he had enough total itemized deductions to itemize,how much will he be allowed to deduct for these unreimbursed medical expenses?

Accepted Answer

To calculate the deductible amount for unreimbursed medical expenses, we need to subtract 7.5% of the adjusted gross income (AGI) from the total medical expenses. In this case, the calculation is as follows:

Total medical expenses = $2,500 + $3,500 + $2,400 + $250 = $8,650
7.5% of AGI = 0.075 x $42,000 = $3,150

Since $3,150 is less than the total medical expenses, we can subtract it from the total to get the deductible amount:

Deductible medical expenses = $8,650 - $3,150 = $5,500

Therefore, Mike will be allowed to deduct $5,500 for his unreimbursed medical expenses.

Question 18

Adjusted gross income is not a factor in calculating which of the following itemized deductions?

Accepted Answer

Taxes are not subject to a percentage of adjusted gross income (AGI) limitation, unlike medical expenses, casualty or theft losses, and miscellaneous expenses, which are calculated based on a percentage of AGI.

Question 19

Kerri and Jason Smith have an adjusted gross income of $55,000.During the year they incurred unreimbursed expenses of $500 on prescription drugs,$2,506 on doctor and dentist bills,$1,200 on health insurance premiums,and $150 on medical related transportation costs.Assuming they have enough total itemized deductions to itemize,how much will they be allowed to deduct for these unreimbursed medical expenses?

Accepted Answer

The answer of Kerri and Jason Smith have an adjusted...

Question 20

Qualifying contributions to personal retirement accounts are subtracted as

Accepted Answer

Qualifying contributions to personal retirement accounts such as traditional IRA, Roth IRA or 401(k) are subtracted from the taxpayer's income and are considered adjustments to income. This reduces the taxpayer's taxable income and therefore lowers their overall tax liability.

Quiz 4: Managing Income Taxes

A casualty or theft loss is difficult to qualify for because the loss must

Iris Rosales is an unmarried college student age 21,and is claimed as a dependent on her married parents' tax return.What is the maximum number of personal exemptions Iris can legally claim on her own tax return?

Numerous job-related expenses can potentially be deducted from federal income taxes as ____ expenses.

Which of the following types of subtractions cannot be taken by a taxpayer if he or she itemizes deductions?

Melissa and Martin McArthur incurred the following interest expenditures:

Which of the following types of taxes is deductible for federal income tax purposes?

Which of the following expenses on a home is not tax deductible annually?

Which of the following job-related apparel is most likely to qualify as a deductible expense?

Sal is a 27-year-old single taxpayer in the 28 percent marginal tax bracket.Assuming Sal's standard deduction is $5,800 and she has itemized deductions totaling $6,500,Sal should take the for the additional tax savings of .

Sally McKrachen is a single young professional with a gross income of $51,000.Sally has no adjustments to gross income,but she does have itemized deductions totaling $4,275.If personal exemptions for the year are $3,700 each and the standard deduction is $5,800,what is Sally's taxable income?

It is possible to deduct some types of transportation expenses with all of the following itemized deductions except

Interest penalties for early withdrawal of savings from certificates of deposit are

Total itemized deductions must be ____ to reduce your tax liability.

Which of the following is not a deductible medical expense?

Marla and Victor Zapata have the following eligible miscellaneous itemized deductions: They have an adjusted gross income of $63,000 and other itemized deductions of $8,580.How much of the above miscellaneous expenses can they add to their other itemized deductions?

A donation of old toys and clothes to the Salvation Army valued at $500 will save a single taxpayer in the 33 percent marginal tax bracket

Adjusted gross income is not a factor in calculating which of the following itemized deductions?

Qualifying contributions to personal retirement accounts are subtracted as

Quiz 4: Managing Income Taxes

A casualty or theft loss is difficult to qualify for because the loss must

Iris Rosales is an unmarried college student age 21,and is claimed as a dependent on her married parents' tax return.What is the maximum number of personal exemptions Iris can legally claim on her own tax return?

Numerous job-related expenses can potentially be deducted from federal income taxes as ____ expenses.

Which of the following types of subtractions cannot be taken by a taxpayer if he or she itemizes deductions?

Melissa and Martin McArthur incurred the following interest expenditures:

Which of the following types of taxes is deductible for federal income tax purposes?

Which of the following expenses on a home is not tax deductible annually?

Which of the following job-related apparel is most likely to qualify as a deductible expense?

Sal is a 27-year-old single taxpayer in the 28 percent marginal tax bracket.Assuming Sal's standard deduction is $5,800 and she has itemized deductions totaling $6,500,Sal should take the ____ for the additional tax savings of ____.

Sally McKrachen is a single young professional with a gross income of $51,000.Sally has no adjustments to gross income,but she does have itemized deductions totaling $4,275.If personal exemptions for the year are $3,700 each and the standard deduction is $5,800,what is Sally's taxable income?

It is possible to deduct some types of transportation expenses with all of the following itemized deductions except

Interest penalties for early withdrawal of savings from certificates of deposit are

Total itemized deductions must be ____ to reduce your tax liability.

Which of the following is not a deductible medical expense?

Marla and Victor Zapata have the following eligible miscellaneous itemized deductions: ​ They have an adjusted gross income of $63,000 and other itemized deductions of $8,580.How much of the above miscellaneous expenses can they add to their other itemized deductions?

A donation of old toys and clothes to the Salvation Army valued at $500 will save a single taxpayer in the 33 percent marginal tax bracket

Adjusted gross income is not a factor in calculating which of the following itemized deductions?

Qualifying contributions to personal retirement accounts are subtracted as

Sal is a 27-year-old single taxpayer in the 28 percent marginal tax bracket.Assuming Sal's standard deduction is $5,800 and she has itemized deductions totaling $6,500,Sal should take the for the additional tax savings of .

Marla and Victor Zapata have the following eligible miscellaneous itemized deductions: They have an adjusted gross income of $63,000 and other itemized deductions of $8,580.How much of the above miscellaneous expenses can they add to their other itemized deductions?