Question

1.       All of the following individuals can file as head of household EXCEPT_______

·         Kathy is an unmarried taxpayer who pays all of the costs to maintain her home and provides more than half the support for her five-year old son with whom she lives.

·         Daniel is married taxpayer who lives with and provides more than half the support for his seven-ear old daughter. He also provided more than half the costs of maintaining their household. Daniel’s wife moved to Colorado in April and do not with Daniel or their during the remainder of the year.

·         Charlotte is a married taxpayer who lives with her mother-in-law Emalyn and her ten-year old daughter in Emalyn’s home. Charlotte provides ore than half the cost of maintaining the household and provides more than half of her daughters support. Charlotte’s husband is in the military and has been deployed all year.

·         Nelson is a married father who lives with and provides all of the support for his children ages 7 and 8. Nelson and his estranged wife have not lived in the same residence for at least two years.

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1.       The best description of gross income is ____

·         All worldwide income derived from whatever source, unless excluded taxation by law.

·         Self-employment income received less expenses.

·         Income received for service performed, including wages, commissions, tips and generally, farming and other business income.

·         Income that is received for the investment of money or other property.

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1.       What is the age requirement, if any, to contribute to a Roth IRA?

·         Taxpayers must be at least age 18, and less than age 70 1/2

·         There is no age requirement if the taxpayer meets the compensation requirements.

·         The taxpayer must be at least age 18, but there is no maximum age.

·         The taxpayer must be at least 18 but less than 70 ½, and meet the compensation requirements.

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1.       Which of the following best describes earned income?

·         All worldwide income from whatever source derived, unless excluded from taxation by law.

·         Gross income less reductions that are allowable, regardless of whether personal deductions are itemized.

·         Income received for services performed including wages, commissions, tips and generally farming and other business income.

·         Income that is received from the investment of money and other property.

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1.       The contribution that does NOT qualify an employee to claim the retirement savings contributions credit (Saver’s Credit) is _____

·         A contribution to Roth IRA

·         An employer’s matching contribution to an employee’s 401K plan

·         A nondeductible contribution to a traditional IRA.

·         A voluntary contribution to 403b tax-sheltered annuity.

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1.       All of the following are additional requirements for taxpayer without a qualifying child to claim EITC, EXCEPT the taxpayer ______

·         Must reside in the U.S for more than half the year.

·         Cannot be dependent of another taxpayer

·         Must earn their income as an employee. They cannot be self-employed.

·         Must be between the ages of 25 and 65.

2.       Herman, who is not a dependent, states he wishes to EITC this year for his 35-year-old dependent child. Both reside in the U.S. Herman states that the child lives with him, is not married, is disabled, and has not worked during the year. What should Herman’s Tax Professional do to determine if the child can qualify Herman for EITC?

·         Enter Herman’s child on his tax return and identify him as a disabled qualifying child.

·         Advise the client of the tax definition of disabled, and apply sound judgement and common sense to see if the definition is met.

·         Ask for proof of the child’s income

·         Explain for Herman that a 35-year old child is too old to be a qualifying child for EITC.

3.       For a taxpayer with a qualifying child, which statement is NOT a requirement to claim EITC?

·         Must be at least 25 years old, but younger than age 65, on January 1, 2018

·         Have a child who is not claimed by more than one person for EITC.

·         Have a qualifying child who meets the relationship, age, residency, and joint return test.

·         Must not be a qualifying child of another person.

1.       Which taxpayer is required to file a federal income tax return for 2017?

·         Head of household (58), with a gross income $11,800

·         Married filing jointly (72 and 68) with a gross income $21,850

·         Married filing jointly (72 and 63) with a gross income $22,900

·         Married filing separately (72) with a gross income of $4,000

2.       Which of the following is included in federal gross income?

·         Qualified clergy housing allowances

·         Compensation for personal injuries

·         Interest on sale and local bends

·         Unemployment compensation

1.       An unmarried dependent taxpayer of another taxpayer is required to file a 2017 federal income tax return if they are not blind and age ____ with gross income of _____

·         2; $1,075 (all from interest)

·         16; $1,000 ($800 from wages: $200 from interest)

·         17; $1075 ($700 from wages: $375 from interest)

·         18; $6,300 (all from wages)

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Answer 1

(1) All of the following individuals can file as head of household EXCEPT

-Charlotte is a married taxpayer who lives with her mother-in-law Emalyn and her ten-year old daughter in Emalyn’s home. Charlotte provides ore than half the cost of maintaining the household and provides more than half of her daughters support. Charlotte’s husband is in the military and has been deployed all year.

Reason :This is because even if the spouse lived in separate homes due to a temporary circumstance, such as military service, business trips, a stay in a medical treatment facility, or attendance at college, the IRS still considers you married for that tax year. So here charlotte will be considered married and cannot file as head of household

(2) The best description of gross income

- All worldwide income derived from whatever source, unless excluded taxation by law.

(3)  What is the age requirement, if any, to contribute to a Roth IRA?

- There is no age requirement if the taxpayer meets the compensation requirements.

(4) Which of the following best describes earned income?

-Income received for services performed including wages, commissions, tips and generally farming and other business income.

(5)  The contribution that does NOT qualify an employee to claim the retirement savings contributions credit (Saver’s Credit) is

- An employer’s matching contribution to an employee’s 401K plan

(6)  All of the following are additional requirements for taxpayer without a qualifying child to claim EITC, EXCEPT the taxpayer

-Must earn their income as an employee. They cannot be self-employed

(7)  Herman, who is not a dependent, states he wishes to EITC this year for his 35-year-old dependent child. Both reside in the U.S. Herman states that the child lives with him, is not married, is disabled, and has not worked during the year. What should Herman’s Tax Professional do to determine if the child can qualify Herman for EITC?

- Advise the client of the tax definition of disabled, and apply sound judgement and common sense to see if the definition is met.

(8) For a taxpayer with a qualifying child, which statement is NOT a requirement to claim EITC?

- Must be at least 25 years old, but younger than age 65, on January 1, 2018

(9) Which taxpayer is required to file a federal income tax return for 2017?

-  Married filing jointly (72 and 63) with a gross income $22,900

Reason: You’re required to file a return for 2017 if you have a gross income of $ 22050 , married filing jointly and  1 spouse is 65 or older.

(10) Which of the following is included in federal gross income?

- Unemployment compensation

(11) An unmarried dependent taxpayer of another taxpayer is required to file a 2017 federal income tax return if they are not blind and age ____ with gross income of _____

-  $1,075 (all from interest)

Reason: A dependent unmarried taxpayer , under 65 years and not blind ,whose gross income is only unearned income like interest and dividend must file a return if the gross income is more than $1050