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In which, if any, of the following situations may the individual not be claimed as a dependent of the taxpayer?
 
a. A former spouse who lives with the taxpayer (divorce took place last year).
b. A stepmother who does not live with the taxpayer.
c. A married daughter who lives with the taxpayer.
d. A half-brother who does not live with the taxpayer and is a citizen and resident of Canada.
e. A cousin who does not live with the taxpayer.
   
During 2014, Lisa (age 66) furnished more than 50% of the support of the following persons:
 
a. Lisa's current husband who has no income and is not claimed by someone else as a dependent.
b. Lisa's stepson (age 19) who lives with her and earns $6,000 as a dance instructor. He dropped out of school a year ago.
c. Lisa's exhusband who does not live with her. The divorce occurred two years ago.
d. Lisa's former brotherinlaw who does not live with her.
   
A qualifying child cannot include:
 
a. A nonresident alien.
b. A married son who files a joint return.
c. A daughter who is away at college.
d. A brother who is 28 years of age and disabled.
e. A grandmother.
   
Ellen, age 12, lives in the same household with her father, grandfather, and uncle.
The cost of maintaining the household is provided by her grandfather (40%) and her uncle (60%).
Disregarding tie-breaker rules, Ellen is a qualifying child as to:
 
a. Only her father.
b. Only her grandfather and uncle.
c. Only her uncle.
d. All parties involved (i.e., father, grandfather, and uncle).
e. None of these.
   
Millie, age 80, is supported during the current year as follows:
 
Percent of Support
Weston (a son)                                                  20%
Faith (a daughter)                                             35%
Jake (a cousin)                                                   25%
Brayden (unrelated close family friend)   20%
 
During the year, Millie lives in an assisted living facility. Under a multiple support agreement,
indicate which parties can qualify to claim Millie as a dependent.
 
a. Weston and Faith.
b. Faith.
c. Weston, Faith, Jake, and Brayden.
d. Faith, Jake, and Brayden.
e. None of these.
   
The Hutters filed a joint return for 2014. They provide more than 50% of the support of Carla,
Melvin, and Aaron. Carla (age 18) is a cousin and earns $2,800 from a part-time job. Melvin
(age 25) is their son and is a full-time law student. He received from the university a $3,800
scholarship for tuition. Aaron is a brother who is a citizen of Israel but resides in France. Carla
and Melvin live with the Hutters. How many personal and dependency exemptions can the Hutters
claim on their Federal income tax return?
 
a. Two
b. Three
c. Four
d. Five
e. None of these
   
Which of the following characteristics correctly describes the procedure for the phaseout of exemptions?
 
a. The threshold amounts are different and depend on filing status (e.g., joint return, single).
b. The threshold amounts are indexed for inflation each year.
c. The phaseout procedure is known as a "stealth tax."
d. For the phaseout procedure to be applied, a taxpayer's AGI must
exceed the threshold amount.
e. All of these.
   
Regarding the rules applicable to filing of income tax returns, which, if any, of the following is an incorrect statement:
 
a. Married persons who file joint returns cannot later (after the due date of the return) substitute separate returns.
b. Married persons who file separate returns can later (after the due date of the return) substitute a joint return.
c. The usual test as to when a taxpayer must file a return is based on the total of the following: personal exemption
     + basic standard deduction + both additional standard deductions.
d. Special filing requirement rules exist for taxpayers who are claimed as dependents of another.
e. None of these.
   
Kyle, whose wife died in December 2011, filed a joint tax return for 2011. He did not remarry
but has continued to maintain his home in which his two dependent children live.
What is Kyle's filing status as to 2014?
 
a. Head of household
b. Surviving spouse
c. Single
d. Married filing separately
e. None of these
   
Emily, whose husband died in December 2013, maintains a household in which her dependent
mother lives. Which (if any) of the following is her filing status for the tax year 2014?
(Note: Emily is the executor of her husband's estate.)
 
a. Single
b. Married, filing separately
c. Surviving spouse
d. Head of household
e. Married, filing jointly
   
Which of the following taxpayers may file as a head of household in 2014?
Ron provides all the support for his mother, Betty, who lives by herself in an apartment in Fort
Lauderdale. Ron pays the rent and other expenses for the apartment and properly claims his
mother as a dependent.
 
Tammy provides over one-half the support for her 18-year old brother,
Dan. Dan earned $4,200 in 2014 working at a fast food restaurant and is saving his money to
attend college in 2015. Dan lives in Tammy's home.
 
Joe's wife left him late in December of 2013. No legal action was taken and Joe has not heard
from her in 2014. Joe supported his 6-year-old son, who lived with him throughout 2014.
 
a. Ron only
b. Tammy only
c. Joe only
d. Ron and Joe only
e. Ron, Tammy, and Joe
   
Nelda is married to Chad, who abandoned her in early June of 2014. She has not seen or communicated
with him since then. She maintains a household in which she and her two dependent children live.
Which of the following statements about Nelda's filing status in 2014 is correct?
 
a. Nelda can use the rates for single taxpayers.
b. Nelda can file a joint return with Chad.
c. Nelda can file as a surviving spouse.
d. Nelda can file as a head of household.
e. None of these statements is appropriate.
d
 
Arnold is married to Sybil, who abandoned him in 2013. He has not seen or communicated with her since
April of that year. He maintains a household in which their son, Evans, lives. Evans is age 25 and earns
over $6,000 each year. For tax year 2014, Arnold's filing status is:
 
a. Married, filing jointly.
b. Head of household.
c. Married, filing separately.
d. Surviving spouse.
e. Single.
c
 
Regarding the Tax Tables applicable to the Federal income tax, which of the following statements is correct?
 
a. For any one year, the Tax Tables are issued by the IRS after the Tax Rate Schedules.
b. The Tax Tables will always yield the same amount of tax as the Tax Rate Schedules.
c. Taxpayers can elect as to whether the use the Tax Tables or the Tax Rate Schedules.
d. The Tax Tables can be used by an estate but not by a trust.
e. No correct answer given.
a
 
In which, if any, of the following situations will the kiddie tax not apply?
 
a. The child is married but does not file a joint return.
b. The child has unearned income of $2,000 or less.
c. The child has unearned income that exceeds more than half of his (or her) support.
d. The child is under age 24 and a full-time student.
e. None of these.
b
   
Leslie and Devin own a beach cottage that they rented 30 days for $4,500.
They used the cottage for personal use for 45 days during the year.
The allocated expenses related to the cottage total $6,000, resulting in a net loss
of $1,500 for this rental activity.
What is the proper tax treatment of these amounts by Leslie and Devin?
 
A) Report net income of $4,500 on Schedule E.
B) Report net loss of $1,500 on Schedule E.
C) None of the amounts have to be reported.
D)
   
Report income and expenses on Schedule E but expenses cannot exceed income.
 
Colin and Megan own a cabin in the Mammoth Mountains, California. During the
year, they rented it for 45 days for $10,000 and used it 12 days for
personal use. The expenses for the cabin included $7,000 in mortgage interest,
$3,000 in property taxes, $1,200 in utilities, $400 in
maintenance, and $3,000 in depreciation. What is their net income or loss from
the cabin (without considering the passive loss limitation)?
Use the IRS method for allocation of expenses.
 
A) $0.
B) $1,526 net loss.
C) $7,632 net loss.
D) $10,000 net income.
   
Royalties can be earned from allowing others the right to use:
 
A) Building.
B) Equipment.
C) Furniture.
D) Copyrighted material.
   
Jeremiah is a full-time professor of psychology at the University of Washington and an author
of a psychology textbook. The royalty income he receives from the publisher should be reported on:
 
A) Schedule C.
B) Schedule K-1.
C) Form 1099-MISC.
D) Schedule E.
   
Which of the following is not considered a flow-through entity?
 
A) Limited liability company.
B) Sole proprietorship.
C) Partnership.
D) S corporation.
   
Roger, Ellen, Drew and Cindy are equal partners in a local pub. The pub reports the following items for the current year:
Each partner receives a Schedule K-1 with one-fourth of the preceding items reported to him her.
How must each individual report these results on his/her Form 1040?
 
A) $192,500 on Schedule E $40,000 on Schedule A.
B) $257,667 on Schedule E $40,000 on Schedule A.
C) $385,000 on Schedule E $40,000 on Schedule A.
D) $770,000 on Schedule E $160,000 on Schedule A.
A) $192,500 on Schedule E $40,000 on Schedule A.
   
Rental income may be reported on a Schedule A or a Schedule C.
 
A) True
B) False
   
All rental properties are depreciated using the straight-line method over 39 years.
 
A) True
B) False
   
If a tenant provides service for the rental property in lieu of rental payment, the fair market value of the service is considered rental
income and must be reported as income.
 
A) True
B) False
   
Rental properties that are also used as vacation homes fall under one of two categories: (1) primarily rental or (2) primarily personal.
 
A) True
B) False
   
In the case of a primarily personal property, a taxpayer may report a net loss as long as the correct allocation method was used.
 
A) True
B) False
   
The two methods that may be used to allocate expenses between personal
and rental use of properties are the IRS method and the Tax Court method.
 
A) True
B) False
   
A primarily rental property may report its income and expenses on a Schedule E.
 
A) True
   
Royalty income is income received from the use of books, stories, plays, copyrights, trademarks, etc.
owned by the taxpayer.
 
A) True
B) False
   
When royalties are paid, the amount paid is reported to the recipient by the payer on a Form 1099-MISC.
 
A) True
B) False
   
Flow-through entities include, but are not limited to, LLCs, S Corporations, trusts and estates.
 
A) True
B) False
   
On October 1 of the current year, Jose and Joyce purchased a rental beach house for $1,300,000.
Of that amount, $800,000 was for the land value. How much depreciation deduction can Jose
and Joyce take in the real estate professional, the income and expenses of the rental activity should
be reported on:
 
A) Schedule E
B) Schedule C
C) Either Schedule E or C
D) Niether Schedule E or C
   
Janet and Jason own a four-plex in Santa Monica, California. They rent out 3 units and live in the fourth.
Their income and expenses for the four-plex are as follows:
 
mortgage interest                                           $11,200
property taxes                                                 $9,000
insurance                                                         $3,500
utilities                                                            $1,500
repairs and maintenance                               $3,000
depreciation on the entire complex of           $8,000
rental income of                                              $36,000.
 
What amount of net rental income or loss should Janet and Jason report on their tax return?
 
A) $200 net loss.
B) $8,850 net income.
C) $15,800 net income.
D) $36,000 net income.
   
A property that has been rented for 180 days and used for personal use for 16 days should be categorized as:
 
A) primarily rental
B) primarily personal
C) personal/rental
D) all of the above are correct
   
Katie and Mike own a home in Newport Beach, California. During the year, they rented the house for 80 days for $24,000
and used it for personal use for 30 days. The expenses for the house included $20,000 in mortgage interest,
$8,500 in property taxes, $6,000 in utilities, $2,000 in maintenance, and $12,000 in depreciation.
What is the deductible loss for the rental of their home (without considering the passive loss limitation)?
Use the IRS method for allocation of expenses.
 
A) $0.
B) $5,000 net income.
C) $17,414 net loss.
D) $27,500 net loss.
   
Lois and Benjamin own a chalet in New Mexico and rented it for 12 days for $6,000.
The rest of the year, the chalet was used by them and their friends and family.
What is the proper tax treatment of the $6,000 income?
 
A) none of the rental income needs to be reported as part of gross income .
B) the amount should be reported on Schedule E.
C) the amount should be reported on Schedule C.
D) the amount should be reported as other income.
   
Which of the following statements is true concerning vacation home properties?
 
A) A property rented for 15 days or more and used for personal use for no more than 14 days
     is categorized as primarily rental.
B) A property rented for 15 days or more and used for personal use more than 14 days.
C) A property categorized as primarily personal is one rented for zero days.
D) Report all income and expenses and net income or net loss.
   
Which of the following expense items is (are) deductible as rental expense?
 
A) Property taxes.
B) Depreciation.
C) Insurance.
D) All are deductible rental expenses.
   
Elizabeth rented her personal residence for 12 days to summer vacationers for $4,800.
The rest of the year, she and her family used the home as their personal residence.
She has AGI of $105,000, excluding the year include the following:
What is Elizabeth's AGI after taking into consideration the rental income and related expenses for her home?
$105,000
   
Robert and Melissa own a home in Big Bear Lake, California. During the year, they
rented it for 55 days for $11,000 and used it for 12 days for personal use.
The expenses for the house included $12,000 in mortgage interest, $2,000 in property
taxes, $1,000 in utilities, $600 in maintenance,
and $4,000 in depreciation. What is their income or loss from their cabin;
(without considering the passive loss limitation)? Use the IRS method for allocation of expenses.
 
A) $0.
B) $2,947 net loss.
C) $5,090 net loss.
D) $11,000 net income.
   
Royalties can be earned from allowing others the right to use:
 
A) patents.
B) plays.
C) songs.
D) all of the above.
   
When royalty income is received, the recipient (tax payer) generally reports the income on which form?
 
A) Schedule D.
B) Schedule K-1.
C) 1099-MISC.
D) Schedule E.
   
Darlene is a full-time author and recently published her third romance novel.
The royalty income she receives from the publisher this year should be reported on what schedule?
 
A) Schedule C.
B) Schedule K-1.
C) 1099-MISC.
D) 1099-INT.
   
Paul is a 45- year- old stockbroker. When he was in his 20s, he was a member of a band called the Zombies
and wrote several hit songs.
Paul should report the royalty income he receives in the current year from his songs on what schedule?
 
A) Schedule E.
B) Schedule D.
C) Schedule A.
D) Schedule C.
   
Royalties can NOT be earned from which of the following:
 
A) oil wells.
B) patents.
C) coal mines.
D) stocks.
   
Which of the following entity(ies) is (are) considered flow-through entity(ies)?
 
A) C corporation.
B) sole proprietorship.
C) non- profit corporations.
D) estates.
   
Earl and Sandra own and operate a restaurant as an S corporation. Each is a 50% owner.
The business reports the following results for the year: How do Earl and Sandra report these
items for tax purposes on each of their individual returns?
 
A) $41,000 income on Schedule E; $16,000 investment expense on Schedule A.
B) $41,000 income on Schedule E; $32000 investment expense on Schedule A.
C) $82,000 income on Schedule E; $32,000 investment expense on Schedule A.
D) $480,000 income on Schedule E; $16,000 investment expense on Schedule A.
   
Pension plan distributions are reported to taxpayers on a Form 1099-D.
 
A) True
B) False
   
The expected return on an annuity contract that will last for a specified amount of time is determined
with reference to the life expectancy tables published by the IRS.
 
A) True
B) False
   
Which of the following is not an employer-sponsored retirement plan?
 
A) Roth IRA.
B) SIMPLE.
C) 401(k).
D) Qualified pension plan.
   
Which of the following statements is incorrect?
 
A) Tax-deferred plans have an accumulation period and a distribution period.
B) Normally, if a retirement plan is funded with dollars that have already been taxed, the distributions will be taxed.
C) During the accumulation period of a qualified retirement plan, no taxes are due on the earnings from the plan investments.
D) Contributions to retirement plans are often limited in amount.
   
What are the tax consequence(s) related to a qualified pension plan?
 
A) Employer contributions are deductible when made.
B) Earnings on the contributions are taxable.
C) Employees are not taxed until distributions are received from the plan.
D) Only A. and C.
   
In 2012, the maximum annual contribution to a SIMPLE pension plan for an employee under the age of 50 is:
 
A) $5,000
B) $11,500
C) $17,000
D) $50,000
   
For 2012, the maximum annual contribution to a Simplified Employee Pension (SEP) plan for an employee under the age of 50 is:
 
A) $5,000
B) $11,500
C) $17,000
D) $50,000
   
Employees age 50 or over can contribute an additional per year to a 401(k) plan.
 
A) $17,000
B) $6,000
C) $5,500
D) $5,000
  Paulette is age 32, single, and reported AGI of $64,000 in tax year 2012.
She is an active participant in her employer's pension plan.
What amount of deductible IRA contribution is disallowed in 2012?
 
A) $0.
B) $2,000.
C) $3,000.
D) $5,000.
   
Which of the following statements regarding Individual Retirement Accounts (IRA) is incorrect?
 
A) Contributions to a conventional IRA may be tax-deductible while contributions to a Roth IRA are never tax-deductible.
B) Excess contributions to an IRA are subject to an excise tax.
C) Because IRA contributions are based on compensation, a non-working spouse cannot make a contribution to an IRA.
D) Once a taxpayer reaches age 70½, deductible contributions cannot be made to a conventional IRA.
   
Gwen is age 51, married, and reported AGI of $95,000 in tax year 2012.
She is an active participant in her employer's pension plan.
What amount of deductible IRA contribution is disallowed in 2012?
 
A) $750.
B) $900.
C) $1,800.
D) $4,200.
  DJ is age 27, single, and reported AGI of $67,000 in tax year 2012. He is an active participant
in his employer's pension plan. What is the maximum deductible IRA contribution he can make in 2012?
 
A) $0.
B) $500.
C) $4,500.
D) $5,000.
   
Patrick is age 30, single, and has AGI of $101,000. He would like to contribute to a Coverdell Education Savings Account
(CESA) for his niece, Eileen. Eileen's father has already contributed $500 to a CESA in 2012.
What is the maximum CESA contribution Patrick can make for Eileen in 2012?
 
A) $0.
B) $1,200.
C) $1,500.
D) $2,000.
   
Chandelle and Treymane are married and have combined AGI of $215,000.
They would like to contribute to a Coverdell Education Savings Account for their grandson.
What is the maximum contribution they can make in 2012?
 
A) $2,000.
B) $1,667.
C) $333.
D) $0.
   
Which of the following statements regarding a Coverdell Education Savings Account (CESA) is correct?
 
A) An individual can be the beneficiary of multiple CESAs.
B) Annual contributions are limited to $2,000 per beneficiary, per contributor.
C) A contributor cannot make a contribution for himself/herself.
D) For single taxpayers, permitted contributions begin to be phased out when AGI reaches $90,000.
   
Which of the following statements is incorrect?
 
A) Roth IRA distributions are never taxable.
B) Taxpayers can roll over plan assets from one plan to another tax-free if certain rules are followed.
C) If distributions from a Coverdell Education Savings Account are used for qualified education expenses, the distributions are tax-free.
D) For traditional IRA distributions, the date on which minimum payments must begin is April 1 of the calendar year following the year
     in which the taxpayer reaches age 70½.
   
Distributions from a retirement plan are not subject to a 10% additional tax in each of the following instances except when
 
A) The distribution is made to pay an IRS tax levy on the plan.
B) The distribution is paid to an employee to be used to pay health insurance premiums.
C) The distribution is used to pay for medical expenses above the 7.5% AGI threshold.
D) The distribution is made to an employee or retiree on or after age 59 ½.
   
Mark is single and must start making distributions from his traditional IRA beginning April 1, 2012.
At the end of 2011 when Mark was 71 years old, the IRA had a balance of $110,000.
What amount must Mark take as a distribution from the IRA by April 1, 2012?
 
A) $4,151.
B) $4,297.
C) $6,748.
D) $7,190.
   
At the end of 2010, Erin was 73 years old and her traditional IRA had a balance of $200,000.
She properly withdrew $8,403 from her IRA in 2011, the first year she took a withdrawal.
In 2011, her IRA assets earned $25,000. What amount must Erin take as a distribution from her IRA in 2012?
 
A) $8,733.
B) $9,458.
C) $9,825.
D) Some other amount.
   
Which of the following statements is incorrect?
 
A) An annuity is a series of payments under a contract.
B) Annuity payments are fixed in amount.
C) Annuity payments may be for a specified period of time or for the life of the contract holder.
D) The proportional amount of an annuity payment that is attributable to
the cost of the contract is tax-free.
   
Which of the following statements is incorrect?
 
A) The exclusion ratio represents the proportion of each annuity payment that will be tax-free.
B) If annuity payments are to be received for a fixed period, the taxpayer does not need to refer to the life expectancy tables provided by the IRS.
C) To determine the taxable amount of each annuity payment, the taxpayer must know the cost of the contract.
D) Once the cost of the annuity has been recovered, any remaining payments will be tax-free.
   
To calculate the taxable portion of an annuity payment, a taxpayer must determine all of the following except:
 
A) The cost of the annuity contract.
B) The year in which annuity payments were first received.
C) The expected return from the contract.
D) The amount and frequency of occurrence of the stream of annuity payments.
   
Taxes influence which of the following decisions?
 
A. Business decisions
B. Personal decisions
C. Political decisions
D. Investment decisions
E. All of the choices are correct.
   
Which of the following is considered a tax?
 
A. Tolls
B. Parking meter fees
C. Annual licensing fees
D. A local surcharge paid on retail sales to fund public schools
E. Entrance fees paid at national parks
   
Margaret was issued a $150 speeding ticket. This is:
 
A. a tax because payment is required by law.
B. a tax because the payment is not related to any specific benefit
received from the government agency collecting the ticket.
C. not a tax because it is considered a fine intended to punish illegal behavior.
D. a tax because it is imposed by a government agency.
E. not a tax because Margaret could have avoided payment if she did not
speed.
   
The ultimate economic burden of a tax is best captured by:
 
A. the marginal tax rate.
B. the effective tax rate.
C. the average tax rate.
D. the proportional tax rate.
E. None of the choices are correct.
   
Which of the following is not one of the basic tax rate structures?
A. Proportional
B. Equitable
C. Regressive
D. Progressive
E. All of these are different kinds of the basic tax rate structures
   
Which of the following is false?
 
A. A proportional tax rate structure imposes a constant tax rate while a
progressive tax rate structure imposes an increasing marginal rate
related to the tax base.
B. The average tax rate changes under a proportional tax rate structure, but it is static for a
     progressive tax rate system.
C. An example of a proportional tax is the tax on gasoline.
D. An example of a progressive tax is the federal tax on gifts.
E. None of the choices are correct.
   
Which of the following taxes represents the largest portion of U.S. Federal Tax revenues?
 
A. Employment taxes
B. Corporate income taxes
C. Individual income taxes
D. Estate and gift taxes
E. None of the choices are correct
   
Which of the following represents the largest percentage of state tax revenues?
 
A. Sales tax
B. Individual income tax
C. Corporate income taxes
D. Property tax
E. None of the choices are correct
   
Which of the following represents the largest percentage of local
(county) tax revenues?
A. Sales tax
B. Individual income tax
C. Corporate income taxes
D. Property tax
E. None of the choices are correct
   
Sin taxes are:
 
A. taxes assessed by religious organizations.
B. taxes assessed on certain illegal acts.
C. taxes assessed to discourage less desirable behavior.
D. taxes assessed to fund a specific purpose.
E. None of the choices are correct.
   
The state of Georgia recently increased its tax on a carton of cigarettes by $2.00. What type of tax is this?
 
A. A sin tax
B. An excise tax
C. It is not a tax; it is a fine
D. A sin tax and an excise tax are correct
E. None of the choices are correct
   
Which of the following statements is true?
 
A. Municipal bond interest is subject to explicit federal tax.
B. Municipal bond interest is subject to implicit tax.
C. Municipal bonds typically pay a higher interest rate than corporate
bonds with similar risk.
D. All of these statements are true.
   
The concept of tax sufficiency:
 
A. suggests the need for tax forecasting.
B. suggests that a government should estimate how taxpayers will respond to changes in the current tax structure.
C. suggests that a government should consider the income and substitution effects when changing tax rates.
D. All of the choices are correct.
E. None of the choices are correct.
   
Which of the following federal government actions would make sense if a tax system fails to provide sufficient tax revenue?
 
A. Only issue treasury bonds.
B. Only cut funding to various federal projects.
C. Only increase federal spending.
D. Issue treasury bonds and cut funding to various federal projects but not increase federal spending.
E. None of the choices are correct.
   
Which of the following principles encourages the vertical equity concept?
 
A. Pay as you go.
B. Economy.
C. Income effects.
D. Ability to pay principle.
E. None of the choices are correct.
   
Which of the following would not be a failure of the horizontal equity concept?
 
A. Two taxpayers pay different amounts of tax because one taxpayer's income includes tax exempt interest.
B. Two taxpayers pay different amounts of property tax amounts on similar plots of land.
C. Two taxpayers pay different amounts of estate tax because one taxpayer's estate is worth significantly more.
D. All of the choices are correct.
E. None of the choices are correct.
   
Employers often withhold federal income taxes directly from worker's paychecks.
This is an example of which principle in practice?
 
A. Convenience.
B. Economy.
C. Certainty.
D. Equity.
E. None of the choices are correct.
   
Congress recently approved a new, smaller budget for the IRS.
What taxation concept evaluates the cost of administering our tax law?
 
A. Convenience.
B. Economy.
C. Certainty.
D. Equity.
E. None of the choices are correct.
   
Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an
investment in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2018,
how much federal tax will he owe? (Use tax rate schedule)
 
A. $13,200.00
B. $10,239.50
C. $9,139.50
D. $4,453.50
E. None of the choices are correct
 
$9,139.50 = 4,453.50 + 0.22(60,000 − 38,700)
   
Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in
interest from an investment in city of Birmingham Bonds. Using the U.S.
tax rate schedule for year 2018, what is his average tax rate (rounded)?
(Use tax rate schedule)
 
A. 15.23%
B. 12.00%
C. 7.42%
D. 22.00%
E. None of the choices are correct
 
15.23% = $9,139.50 / 60,000
   
Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in
interest from an investment in city of Birmingham Bonds. Using the U.S.
tax rate schedule for year 2018, what is his effective tax rate
(rounded)? (Use tax rate schedule)
 
A. 20.31%
B. 14.06%
C. 15.23%
D. 22.00%
E. None of the choices are correct
 
14.06% = $9,139.50/(60,000 + 5,000)
   
Marc, a single taxpayer, earns $60,000 in taxable income and $5,000 in
interest from an investment in city of Birmingham Bonds. Using the U.S.
tax rate schedule for year 2018, what is his current marginal tax rate?
(Use tax rate schedule)
 
A. 12.00%
B. 22.00%
C. 24.00%
D. 32.00%
E. None of the choices are correct
   
If Susie earns $750,000 in taxable income, how much tax will she pay as
a single taxpayer for year 2018? (Use tax rate schedule)
 
A. $216,879.00
B. $277,500.00
C. $243,189.50
D. $247,189.50
E. None of the choices are correct.
 
150,689.50 + 0.37(750,000 − 500,000) = 243,189.50
   
If Susie earns $750,000 in taxable income and files as head of household
for year 2018, what is Susie's average tax rate (rounded)? (Use tax rate
schedule)".
 
A. 32.24%
B. 33.85%
C. 35.00%
D. 37.00%
E. None of the choices are correct.
A
[$149,298 + 0.37($750,000 − $500,000)]/750,000 = 32.24%
   
Leonardo, who is married but files separately, earns $80,000 of taxable
income. He also has $15,000 in city of Tulsa bonds. His wife, Theresa,
earns $50,000 of taxable income.
 
How much money would Leonardo and Theresa save if they file jointly
instead of separately for year 2018? (Use tax rate schedule)
 
A. Nothing
B. $103.50
C. $309.75
D. $5,932.50
E. None of the choices are correct.
 
$20,479.00 both separate and joint = $0.