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RTRP Test Review
Test Review Course
| Question | Answer |
|---|---|
| You do not have to file a return if you do not earn wages. | FalseIf you owe any special taxes, or have net earnings from self‐employment of at least $400, you must file a return. |
| If you are self‐employed with no other income, you have to file a return if your net income from self‐employment is $400 or more. | True While you may not owe income tax you will owe self employment tax (SE tax) on self‐employment income over $400. |
| Generally, dependent children who meet the filing requirements have to file a tax return. | True There are a multiple conditions where a dependent must file a return. |
| A single person who has wages of $2,000 and federal withholding of $120 should file a return even if he or she is not required to file. | True While the $2,000 is below the requirement to file and there is no tax liability, by filing the taxpayer can received a refund of the $120 withheld from their wages. He/she may also qualify for a refundable credit. |
| Whether you are required to file a tax return depends only on the amount of income you receive. | False There are three factors that must be considered to determine whether you are required to file: gross income, filing status, and age. |
| A single person who is 68 during the tax year can have a higher amount of gross income before he or she must file than a single person who is 63. | True A single person 65 or older is required to file a return if there gross income is at least $10,950, whereas a single person under 65 must file a return if their gross income is at least $9,500. |
| You can file a 1040EZ if you are married filing separately. | False To file a 1040EZ filing status must be either single or married filing joint (under age 65 and not blind). |
| Interest from a savings account is an example of earned income. | False Unearned income includes interest, dividends, pensions, unemployment, and taxable social security benefits. |
| On Form 1040, taxable income is the same as the AGI. | False Taxable = Total Income ‐ Adjustments ‐ Deductions ‐ Exemptions |
| The total of all income minus any adjustments is called adjusted gross income. | True Adjustments are various items you are allowed to deduct from your total income. Total income minus adjustments is called adjusted gross income or AGI. |
| Jane’s filing status is qualifying widow with dependent child. She was 42 years old in 2011 and her gross income was $14,550. Jane is required to file a return. | False Since Jane’s gross income is less than $15,300 she is not required to file . However, if Jane had any withholding from wages, she will be able to receive that back if she files. She may also qualify for a refundable credit. |
| Dick and Sally are filing a married filing jointly tax return. Dick was 68 and Sally was 61 years old in 2011. Their gross income was $19,820. Dick and Sally must file a return. | False Dick and Sally’s gross income is under $20,150 which is the minimum amount to file a return if one spouse is 65 or over and the other under 65. However, they may have a refund if they had withholdings or qualify for a refundable credit. |
| Sonia (age 67 in 2011) is single, received nontaxable social security of $9,000 and made $750 net from selling Christmas ornaments at craft shows. Sonia must file a return. | True Because Sonia had more than $400 in self‐employment income, she is required to file even though her social security is nontaxable. |
| Barbara (single, age 16 ) can be claimed by her parents as a dependent. In 2011, Barbara earned wages of $680 as a dishwasher and $620 from her job as a clerk. She also had a savings account, which earned interest of $300. Barbara must file a return. | False Since Barbara is single, under 65, and not blind and her unearned income was less $950, her earned income less than $5,800, and her gross income not more than the larger of $950 or her earned income plus $300. |
| Jackie was married in 2011 but chose the filing status married filing a separate return. In 2011, she had a gross income of $3,750. Jackie must file a return. | True Since Jackie is filing separate and her gross income was at least $3,700, she must file a return. |
| Tracey spent $3,400 for food, shelter, and clothing for her four‐year‐old daughter. She received $2,900 from welfare for her daughter. The support test for a qualifying child is met. | True Tracy meets the support test because she provided over half of the support for her daughter. |
| Phil’s son, Tony, earned $3,750 last year. Tony is 21 years old and started college full time in September 2011. The age test for a qualifying child is met. | True While Tony is over 18, he is a full‐time college student under the age of 24. Joanne’s daughter, Adrienne, earned $3,750 last year. Adrienne is 20 years old and not in school. |
| Joanne can claim Adrienne as a dependent. | False Since Adrienne is not under the age of 19 or is not a full time student under the age of 24 she does not meet the age test so cannot be claimed as a dependent of Joanne. |
| Curly provided all of the support for his father, Larry, who lived with him all year. Larry’s only income is $3,750 of interest and social security of $1,200. Curly can claim Larry as a dependent. | False Since Larry’s gross income is more than $3,700 he does not meet the gross income test and Curly cannot claim him as a qualifying relative. |
| Myra can claim a person with a gross income of $3,700 as a qualifying relative. | False In order to claim a person as a qualifying relative, their gross income must be less than $3,700. |
| The custodial parent can sign an agreement allowing the noncustodial parent to claim an exemption for their child. | True If a custodial parent signs a written declaration that he or she will not claim the child for the year, and the noncustodial parent attaches this statement to their return, the noncustodial parent can claim an exemption for their child. |
| Every person claimed as a dependent must have a social security number or other valid taxpayer identification number. | True Every person for which an exemption is claimed must have a social security number or other valid taxpayer identification number such as an ITIN . |
| If your spouse died during the year, you cannot claim his or her exemption on a joint return. | False If your spouse died during the year, you generally can claim the exemption for the deceased spouse if you file a joint return for yourself and your deceased spouse. |
| The custodial parent is the parent with whom the child lived the greater part of the year. | True The custodial parent is the parent with whom the child lived for the greater number of nights during the year. |
| An eligible foster child meets the relationship test for qualifying child. | True An eligible foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. |
| A person related to your spouse is not considered to meet the relationship test for you once you are divorced. | False False Any relationship established by marriage is not ended by death or divorce. |
| To file a joint return, both individuals must have income. | False When the filing status is married filing jointly both individuals do not have to have income. However, all the income of both spouses must be included in the return. |
| Under the Head of Household filing status, a qualifying person must be a child. | False For Head of Household filing status the qualifying person can be a qualifying child or a qualifying relative. |
| The qualifying widow(er) filing status has the same tax rate as the Married Filing Jointly. | True The Qualifying Widow(er) status allows you to use the same tax rate and standard deduction as for a MFJ return. |
| You are considered unmarried for the whole year if, on the last day of the tax year, you are unmarried or legally separated. | True If you are not married or legally separated on the last day of the tax year, you are considered unmarried for the whole year. |
| If your spouse died during the year and you did not remarry, you are considered married for the whole year for filing status purposes. | True If your spouse died during the year and you did not remarry, you are considered married for the whole year and eligible to file MFJ. |
| Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return. | True If you have filed a MFJ return with your spouse and you both want to change your filing status to MFS, you must file an amended return using 1040X by the original due date of the return. |
| Which of the following cannot use the single filing status? a. you were never married. | Incorrect. Always files single. |
| Which of the following cannot use the single filing status? b. you were divorced or legally separated under a separate maintenance decree. | Incorrect. Must file as single. |
| Which of the following cannot use the single filing status? c. you and your spouse can both file single since you lived apart for most of the year. | Correct. You cannot file single. You must file married filing separate. |
| Which of the following cannot use the single filing status? d. you were widowed before the last day of the tax year and have not remarried during the tax year. | Incorrect. Cannot file single. A person who is widowed during the year of tax filing files as married filing joint. |
| If you file MFS, you cannot take the earned income credit | This is true. |
| If you file MFS, you cannot use the tax tables to determine your tax. | False. The tax table can be used to determine your tax once you have determined your taxable income. |
| If you file MFS, you generally cannot claim the credit for child and dependent care expenses | This is true. |
| If you file MFS, you cannot claim the standard deduction if your spouse itemizes deductions. | This is true. |
| You may be eligible to file H/H even if your parent does not live with you if you pay more than half the cost of keeping up their home for the year and claim them as a dependent. | True If you pay over half the cost of keeping up the main home for your father or mother, and your father or mother qualifies as your dependent, you are eligible to file as Head of Household. |
| You may be eligible to file QW for 3 years following the year of death of your spouse. | False- A person filing as QW can file with this status for only 2 years following the death of their spouse. |
| Your brother is a qualifying person for filing HOH even if you cannot claim an exemption for him. | False- In order to claim a qualifying relative for HOH purposes, he/she must be your dependent. |
| For the purposes of qualifying for head of household, the cost of keeping up a home includes real estate taxes. | True RE taxes are part of the cost of keeping up a home. |
| For the purposes of qualifying for head of household, the cost of keeping up a home includes food consumed in the home. | False |
| For the purposes of qualifying for head of household, the cost of keeping up a home includes medical treatment. | True medical expenses are part of the cost of keeping up a home |
| For the purposes of qualifying for head of household, the cost of keeping up a home includes utilities. | True utilities are part of the cost of keeping up a home |
| For the purposes of qualifying for head of household, the cost of keeping up a home includes rent. | True rent is part of the cost of keeping up a home. |
Created by:
mark.mcauley