e.
Qualifying widow(er)
f.
Married filing joint or married filing separate
84. The taxpayer’s spouse died last year. The taxpayer's 13-year-old dependent daughter lives with her.
ANSWER:
e
85. The unmarried taxpayer supports his dependent mother, who lives next door in a separate apartment.
ANSWER:
d
86. The taxpayer is married, but her husband disappeared with a girlfriend while on vacation in March of the current year. The taxpayer has no dependents.
ANSWER:
c
87. The taxpayer is unmarried and is living with his girlfriend.
ANSWER:
a
88. After living together for 6 months, the couple married on December 31.
ANSWER:
f
89. The taxpayer who is unmarried legally adopted a child who lives with her.
ANSWER:
d
Subjective Short Answer
90. List two general objectives of the tax code.
ANSWER:
The tax code promotes social goals, economic goals, and raising revenue.
91. Mark a “Yes” to each of the following if it is an objective of the tax code. Otherwise mark with a “No.”
a. To provide a car to each American.
b. To promote giving to charities.
c. To encourage taxpayers to send their children to college.
d. To raise money to operate the government.
e. To promote the use of solar energy.
ANSWER:
a. No
b. Yes
c. Yes
d. Yes
e. Yes
92. Mark each of the following as a taxable entity, a reporting entity, or both:
a. Individuals
b. Corporations
c. Partnerships
ANSWER:
a. Taxable and reporting entity
b. Taxable and reporting entity
c. Reporting entity
93. List if a form is used for an individual, a corporation, or a partnership tax return.
a. Form 1065
b. Schedule A, Itemized Deductions
c. Form 1040
d. Form 1120
e. Schedule B, Interest and Dividends
ANSWER:
a. Partnership
b. Individual
c. Individual
d. Corporation
e. Individual
94. Barry is age 45 and a single taxpayer. In 2020, he has gross income of $17,000 and itemized deductions of $6,500. If Barry claims no dependents on his 2020 income tax return, calculate the following amounts:
a.
His personal exemption amount
b.
Barry's taxable income
ANSWER:
a.
$0. There are no personal exemptions in 2020
b.
$4,600= $17,000 − $12,400 standard deduction
95. What is the formula for computing taxable income, as summarized in the textbook?
ANSWER:
Gross income
− Deductions for adjusted gross income
Adjusted gross income
− Greater of itemized deductions or standard deduction
− Qualified business income deduction
Taxable income
96. Mary is age 33 and an unmarried taxpayer with adjusted gross income for 2020 of $29,400. Mary maintains a home for three dependent children and has itemized deductions of $3,000. Calculate the following amounts for Mary's 2020 income tax return:
a.
Mary's standard or itemized deduction amount
b.
Mary's taxable income
ANSWER:
a.
$18,650
b.
$10,750= $29,400 − $18,650
97. Kenzie is a research scientist in Tallahassee, Florida. Her spouse Gary stays home to take care of their house and two dogs. Kenzie's total wages for 2020 were $60,500 from which $5,900 of federal income tax was withheld.
Calculate the income tax due or income tax refund on Kenzie and Gary's 2020 individual income tax return. Use the tax formula for individuals and show your work.
ANSWER:
Gross income
$60,500
Deductions for adjusted gross income
0
Adjusted gross income
60,500
Standard deduction
(24,800)
Taxable income
$35,700
Gross tax liability (from tax table)
$3,892
Tax withheld
(5,900)
Refund due
$(2,008)
98. Melissa is a 35-year-old single taxpayer with adjusted gross income of $49,600. She uses the standard deduction and has no dependents.