11. In computing taxable income, an in

29 Jun 11. In computing taxable income, an in

Question
1. Harry and Sally were married on December 23, 2011. Their income for the entire year is reported on a

joint return.

True False

2. 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.

True False

3. Mrs. Paley died on July 14, 2010. 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 2011 and 2012.

True False

4. 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.

True False

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

deceased.

True False

6. Mr. Lenz died on May 4, 2010. His widow, Mrs. Lenz, maintains a home for her three children, ages 4, 6,

and 11. Mrs. Lenz must file as a head of household in 2011.

True False

7. An individual’s taxable income equals adjusted gross income less the greater of the standard deduction or

itemized deductions and the exemption amount.

True False

8. An individual’s taxable income equals adjusted gross income less the exemption amount.

True False

9. Adjusted gross income equals total income less itemized deductions.

True False

10. In computing taxable income, an individual is allowed to deduct the lesser of itemized deductions or the

standard deduction.

True False

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

itemized deduction for the year.

True False

12. Mr. Thomas is age 69, has perfect vision, and files as a single taxpayer. His standard deduction for 2011

is $7,250.

True False

13. Mr. Andrews is age 58, legally blind, and files as a single taxpayer. His standard deduction for 2011 is

$5,800.

True False

14. 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 2011 is $13,900.

True False

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

True False

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

individuals filing jointly.

True False

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

True False

18. An itemized deduction doesn’t result in any tax savings in a year in which an individual taxpayer takes the

standard deduction.

True False

19. An individual who files his own tax return but is claimed as a dependent on another individual’s return is

not allowed any standard deduction or personal exemption.

True False

20. A husband and wife are allowed only one exemption on a jointly filed return.

True False

21. In order to be claimed as a dependent, an individual must be either a qualifying child or a qualifying

relative.

True False

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

True False

23. 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.

Mr. and Mrs. Queen can’t claim Doreen as a dependent this year.

True False

24. 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. Jay’s parents may claim

him as a dependent on their 2011 return.

True False

25. The tax rates for individuals who qualify as a head-of-household are lower than the tax rate for single

individuals.

True False

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