Chapter 1 Test
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San Juan College *
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222
Subject
Law
Date
Apr 29, 2024
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docx
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6
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Which of the following is not a goal of the tax law?
a. Raising revenue to operate the government.
b. Encouraging smaller families.
c. Encouraging certain social goals such as contributions to charity.
D. Encouraging certain economic goals such as a thriving business community.
e. None of these choices are goals of the tax law.
Which one of the following provisions was passed by Congress to meet a social goal of the tax law?
A. The moving expense deduction for adjusted gross income.
b. The charitable deduction.
c. The deduction for job hunting expenses.
d. The deduction for soil and water conservation costs available to farmers.
e. None of these choices are correct.
The US federal tax law's sole purpose is to raise revenue.
True
False
Which of the following is not a goal of the tax law?
a. Social goals such as lowering the cost of adoption.
b. Economic goals such as reduction in unemployment.
c. Raise adequate revenue to operate the government.
d. Ensuring that all persons pay the same amount of tax.
A corporation is a reporting entity but not a tax-paying entity.
True
False
Partnership capital gains and losses are allocated separately to each of the partners.
True
False
Wesley has a fairly simple tax situation with moderate wage income and a modest amount of interest income. Wesley wishes to use the easiest possible tax form. He may file:
a.
Form 1040A
b.
Form 1065
c.
Form 1040
d.
Form 1040EZ
e.
None of these choices are correct.
Which of the following forms may be filed by individual taxpayers?
a.
Form 1120
b.
Form 1041
c.
Form 1040
d.
Form 1065
e.
None of these choices are correct.
Partnerships:
a.
Are taxed in the same manner as individuals.
b.
Are not taxable entities.
c.
File tax returns on Form 1041.
d.
File tax returns on Form 1120.
Which of the following is correct?
a.
A partnership is a taxable entity and a reporting entity.
b.
A corporation is a reporting entity but not a taxable entity.
c.
An individual is a reporting entity but not a taxable entity.
d.
A partnership is a reporting entity but not a taxable entity.
Schedule 1 of Form 1040 is used to report:
a.
Salary income.
b.
Joint return status.
c.
Self-employment income.
d.
Withholding on wages.
Partnership income is reported on:
a.
Form 1120S.
b.
Form 1065.
c.
Form 1040X.
d.
Form 1040PTR.
Depending on the amounts of income and other tax information, some individuals may report their income on:
a.
Form 1040A.
b.
Form 1065.
c.
Form 1120.
d.
Form 1041.
e.
None of these choices are correct.
Which of the following is not considered one of the five basic taxable or reporting entities?
a.
Individual
b.
Portfolio
c.
Trust
d.
Partnership
e.
Corporation
Married taxpayers may double their standard deduction amount by filing separate returns.
True
False
An item is not included in gross income unless the tax law specifies that the item is subject to taxation.
True
False
For taxpayers who do not itemize deductions, the standard deduction amount is subtracted from the taxpayer's adjusted gross income.
True
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False
Eugene and Velma are married. For 2018, Eugene earned $25,000 and Velma earned $30,000. They have decided to file separate returns. They have no deductions for adjusted gross income. Eugene's itemized deductions are $14,200 so he is going to itemize. Velma's itemized deductions are $4,000. Assuming Eugene and Velma do not live in a community property state, what is Velma's taxable income?
a.
$21,950
b.
$18,000
c.
$26,000
d.
$14,000
e.
None of these choices are correct.
An individual is a head of household. What is her standard deduction?
a.
$9,350
b.
$18,000
c.
$12,000
d.
None of these choices are correct.
Eugene and Velma are married. For 2018, Eugene earned $25,000 and Velma earned $30,000. They have decided to file separate returns. They have no deductions for adjusted gross income. Eugene's itemized deductions are $14,200 and Velma's are $4,000. Assuming Eugene and Velma do not live in a community property state and Eugene deducts the greater of the standard deduction or itemized deductions, what is Eugene's taxable income?
a.
$1,000
b.
$10,800
c.
$18,000
d.
$21,000
e.
None of these choices are correct.
Oscar and Mary have no dependents and file a joint income tax return for 2018. They have adjusted gross income (all wages) of $140,000 and itemized deductions of $30,000. What is the amount of taxable income that Oscar and Mary must report on their 2018 income tax return?
a.
$93,600
b.
$116,000
c.
$110,000
d.
$140,000
e.
$102,000
A taxpayer with self-employment income of $600 must file a tax return.
True
False
A dependent child with earned income in excess of the available standard deduction amount must file
a tax return.
True
False
A single taxpayer, who is not a dependent on another's return, not blind and under age 65, with income of $11,750 must file a tax return.
True
False
If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether he or she files a tax return.
True
False
Taxpayers with self-employment income of $400 or more must file a tax return.
True
False
Which of the following taxpayers does not have to file a tax return for 2018?
a.
A single taxpayer who is under age 65, with income of $13,500.
b.
Married taxpayers (ages 45 and 50 years), filing jointly, with income of $26,000.
c.
A student, age 22, with unearned income of $2,500 who is claimed as a dependent by her parents.
d.
A qualifying widow (age 67) with a dependent child and income of $18,800.
e.
All of these choices are correct.
In which of the following situations is the taxpayer not required to file a 2018 income tax return?
a.
When an individual has a current year income tax refund and would like to obtain it.
b.
When the taxpayer is a single 67-year-old with wages of $9,800.
c.
When the taxpayer is a 35-year-old head of household with wages of $18,800.
d.
When the taxpayer is a 69-year-old widow (spouse died 3 years ago) with wages of $16,500 and no dependents.
e.
When the taxpayers are a married couple with both spouses under 65 years old with wages of $26,000.
All of the following factors are important in determining whether an individual is required to file an income tax return, except:
a.
The taxpayer's total itemized deductions.
b.
The taxpayer's gross income.
c.
The availability of the additional standard deduction for taxpayers who are elderly.
d.
The taxpayer's filing status.
e.
None of these choices are correct.
John, 45 years old and unmarried, contributed $1,000 monthly in 2018 to the support of his parents' household. The parents lived alone and their income for 2018 consisted of $500 from dividends and interest. What is John's filing status and how many dependents should he claim on his 2018 tax return?
a.
Single and 2 dependents
b.
Head of household and no dependents
c.
Head of household and 2 dependents
d.
Single and no dependents
e.
None of these choices are correct.
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