Question

Question 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 _________.

	a)2; $1,075 (all from interest).
	b)16; $1,000 ($800 wages plus $200 interest).
	c)17; $1,075 ($700 wages plus $375 interest).
	d)18; $6,300 (all from wages).

Question 2

Paul's unmarried daughter, Candace, lived with him in his home for the entire year. Paul is divorced. He owns his own home and pays all of the costs of upkeep for the home. Paul paid over one-half of the cost of support for Candace. Paul may file as head of household if Candace is __________.

	a)19 years old, not a full-time student, and earned $4,250 in wages.
	b)21 years old, a full-time student for five months, and earned $5,050 in wages.
	c)23 years old, a full-time student for four months, and earned $6,775 in wages.
	d)25 years old, a full-time student for six months, and earned $7,050 in wages.

Question 3

The IRA one-rollover-per-year limit applies to:

	a)Trustee-to-trustee transfers made in the one-year period that begins the day the taxpayer receives the IRA distribution.
	b)Failed financial institutions in the current tax year. c)All rollovers made in the current tax year.   d)Generally, all rollovers made in the one-year period that begins the day the taxpayer receives the IRA distribution.   Question 4 Jocelyn, a 55-year-old taxpayer, receives $20,000 in wages. The maximum contribution she may make to her 401(k) plan in 2017 is __________. a)$18,000   b)$20,000   c)$23,000   d)$24,000
	Question 5 Sonya Landrum (17) is a dependent of her parents. She had wages of $1,525 and earned $185 in interest from her savings account. The maximum amount she may contribute to a traditional or Roth IRA for 2017 is __________. a)$0   b)$1,525   c)$1,710   d)$5,500    Question 6 The expenses that qualify for an education credit in 2017 are __________. a)Tuition payments not offset by nontaxable scholarships, grants, or other benefits.   b)Fees for an optional student activity.   c)Costs for student health fees.   d)Tuition payments offset by nontaxable scholarships, grants, or other benefits. Question 7 Graduate-level classes taken at a local college qualify as a work-related expense if the classes __________. a) Are needed to meet the minimum educational requirements of the taxpayer's present trade.   b)Maintain or improve skills needed in the taxpayer's present work.   c)Qualify the taxpayer for a new trade or business.   d) Are taken during an absence from your job lasting up to 18 months.   Question 8 All of the following taxpayers are able to claim the Child and Dependent Care Credit EXCEPT __________. a)Darcie Castillo is divorced. Her daughter, Jalena (4), lived with her all year. Darcie would have been able to claim the dependency exemption for Jalena except that she signed a waiver allowing her ex-husband to do so. While she was working, Darcie sent her daughter to the Child's Play daycare center.   b)Mary Templeton's husband, Leonel, was disabled and unable to care for himself for the entire year. Mary hired a nurse to care for him in their home while she was at work. Mary and Leonel Templeton will file a joint return.   c)Shamar and Sierra McKinzy have a dependent daughter, Meghan (8). Shamar works full-time, and Sierra is extensively involved in charity work. They paid their church's daycare center to take care of Meghan while Sierra worked for various charitable organizations.   d)Jeremy and Martha Mason have two dependent children, Terrence (10) and Amanda (5). Jeremy worked all year. Martha looked for a job in July and worked from August through December. They paid a babysitter to care for the children from July through December. The Masons will file a joint return.   Question 9 Ethan filed an extension to file his 2016 return and paid 90% of his anticipated balance due of $800 on April 18, 2017. He paid $80 when he filed his 2016 Form 1040A on July 5, 2017. Ethan's failure-to-pay penalty is __________. a)$0   b)$80   c)$720   d)$800 Question 10 When the IRS offsets a married couple's joint refund because one spouse defaulted on a federally-guaranteed student loan, the __________. a)Non-defaulting spouse should request innocent spouse relief.   b)Taxpayers should submit a joint offer in compromise.   c)Defaulting spouse should request a certificate of non-attachment.   d)Non-defaulting spouse should request relief as an injured spouse.

Answer 1

Answer to question number 1 would be:

Option (A) - 2, $1075 (all from Interest). As Table 2 of Publication 501 says that in case of a dependent you would be required to file a federal income tax return where you're not 65 or blind and have unearned income more than $1050.

Answer to question number 2 would be:

Option (b) 21 years old, a full-time student for five months, and earned $5,050 in wages. As per rules to file as head of household, Paul must pay all of the costs of upkeep for the home and his qualifying child must live with him for more half of the year. A qualifying child is based on 5 tests, where he/ she must be less than 24 years of age and a full-time student (5 months student) and Paul must have paid for not less than half of her support cost.

Answer to question number 3 would be:

Option (b) Failed financial institutions in the current tax year, as trustee to trustee transfers are covered under an explicit exception to the one-year-roll-over rule.

Answer to question number 4 would be:

Option (d) $24000, The base rule is that maximum contribution allowable is $18000. However, to encourage participants older than age 50, a catch-up contribution of $6000 is allowable. Therefore, total maximum contribution allowable to Jocelyn (55) would be $24000