Question 1

Which of the following forms may be filed by individual taxpayers?

Accepted Answer

Form 1040 is the tax form used by individual taxpayers to file their income tax return. Forms 1041, 1065, and 1120 are used for other types of entities, such as trusts, partnerships, and corporations, respectively. Therefore, the best choice is A, Form 1040.

Question 2

A child for whom a dependency exemption is claimed on the parents' tax return may also claim a personal exemption on his or her own tax return.

Accepted Answer

A dependent child cannot claim a personal exemption on their own tax return if someone else (such as a parent) claims them as a dependent and takes the dependency exemption.

Question 3

Partnerships:

Accepted Answer

The answer of Partnerships:
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Question 4

For 2014, personal and dependency exemptions are $3,950 each.

Accepted Answer

This was the correct exemption amount for the 2014 tax year.

Question 5

Which of the following is correct?

Accepted Answer

The answer of Which of the following is correct?
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Question 6

Most taxpayers may deduct the standard deduction amount or the amount of their itemized deductions, whichever is higher.

Accepted Answer

This is true according to the tax laws in the United States. Taxpayers may choose to take either the standard deduction or itemize their deductions, but they must select whichever option results in the higher deduction amount.

Question 7

The two types of exemptions are the personal exemption and the dependency exemption.

Accepted Answer

This statement is true. The personal exemption is for the taxpayer themselves, while the dependency exemption is for any qualified dependents.

Question 8

A dependency exemption may be claimed by the supporting taxpayer in the year of death of a dependent.

Accepted Answer

According to IRS rules, a taxpayer may claim a dependency exemption for a dependent who died during the tax year as long as the dependency tests were met for the rest of the year.

Question 9

Which of the following is not a goal of the tax law?

Accepted Answer

The tax law is not aimed at encouraging smaller families. The other options are all possible aims of the tax law.

Question 10

If a taxpayer's adjusted gross income exceeds certain threshold amounts, he or she may be required to reduce the amount of the otherwise allowable deductions for itemized deductions and personal and dependency exemptions in 2014.

Accepted Answer

This is correct. The phase-out of itemized deductions and personal and dependency exemptions begins at certain income threshold amounts for taxpayers in 2014.

Question 11

Which one of the following provisions was passed by Congress to meet a social goal of the tax law?

Accepted Answer

The charitable deduction is designed to encourage taxpayers to donate to charitable organizations, which promotes charitable giving and supports social and philanthropic purposes.

Question 12

Taxpayers can download tax forms from the IRS Internet site.

Accepted Answer

Taxpayers can access and download various tax forms from the official website of the Internal Revenue Service (IRS) for free.

Question 13

Scholarships received by a student may be excluded for purposes of the support test for determining the availability of the dependency exemption.

Accepted Answer

Scholarships received by a student may be excluded when determining the availability of the dependency exemption support test.

Question 14

An individual, age 22, enrolled on a full-time basis at a trade school, is considered a student for purposes of determining whether a dependency exemption is permitted.

Accepted Answer

According to the IRS, a full-time student who is under the age of 24 and enrolled in a program leading to a degree or certificate at an eligible educational institution is considered a dependent if they meet certain criteria. Therefore, this individual would be considered a student for purposes of determining whether a dependency exemption is permitted.

Question 15

Partnership income is reported on:

Accepted Answer

Partnership income is reported on Form 1065, which is specifically designed for partnerships.

Question 16

In 2013, the Affordable Care Act (ACA) added a new Medicare surtax of 3.8 percent on net investment income.

Accepted Answer

The ACA did add a Medicare surtax of 3.8 percent on net investment income for individuals with income over $200,000 and married couples filing jointly with income over $250,000.

Question 17

Form 1040 allows a taxpayer to report which of the following items that are not allowed for taxpayers who file Form 1040A:

Accepted Answer

Form 1040 allows taxpayers to report self-employment income, which is not allowed for taxpayers who file Form 1040A. Salary income, joint return status, and withholding on wages are all items that can be reported on both Form 1040 and Form 1040A.

Question 18

A taxpayer who is living alone and is legally separated from his or her spouse under a separate maintenance decree at year-end should file as single.

Accepted Answer

A taxpayer who is legally separated (not just living apart) from their spouse under a separate maintenance decree can file as a single taxpayer.

Question 19

An individual taxpayer with a net capital loss may deduct up to $3,000 per year against ordinary income.

Accepted Answer

This is true according to the tax code.

Question 20

Wesley owns and operates the Cheshire Chicken Ranch in Turpid, Nevada. The income from this ranch is $49,000. Wesley wishes to use the easiest possible tax form. He may file:

Accepted Answer

The answer of Wesley owns and operates the Cheshire Chicken...

Quiz 1: The Individual Income Tax Return