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Multiple Choice Quiz
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1
Many deductions and credits are determined with reference to adjusted gross income (AGI).
A)True
B)False
2
A taxpayer must be married to claim Head of Household status.
A)True
B)False
3
Personal exemptions are for the taxpayer and spouse.
A)True
B)False
4
The amount of the standard deduction increases for people who are age 62 and have retired.
A)True
B)False
5
The accuracy-related penalty applies when negligence or any substantial understatement occurs.
A)True
B)False
6
A head of household taxpayer with a dependent child had wages of $45,700. Which is the simplest form this person can file?
A)1040ES
B)1040
C)1040EZ
D)1040A
7
The taxpayer's spouse died at the beginning of 2007. She has a qualifying child. Which status should the taxpayer select when filing her tax return for 2007?
A)Married Filing Jointly
B)Single
C)Head of Household
D)Qualifying Widow(er)
8
On December 31, 2007, a taxpayer received the notification that he was legally divorced. However, he lived with his spouse for 9 months during 2007. He has no dependent children. What status should he select when filing his tax return for 2007?
A)Head of Household
B)Single
C)Married Filing Jointly
D)Married Filing Separately
9
What is the total amount of personal exemptions a taxpayer and the spouse can claim for 2007?
A)$6,300
B)$6,600
C)$6,800
D)$6,500
10
Christopher, who is 20 years old and a full time student, is claimed by his parent as a dependent. However, in 2007, he earned $4,500. What is the amount of the personal exemption that he can claim on his tax return?
A)$3,300
B)$3,100
C)$ 0
D)$4,500
11
To be a qualifying child, the taxpayer must meet three general tests and five specific tests. Which one is not part of the three general tests?
A)Joint return test
B)Support test
C)Dependent taxpayer test
D)Citizen or resident test
12
To be a qualifying relative, the taxpayer must meet three general tests and four specific tests. Which one is part of the four specific tests?
A)Gross income test
B)Age test
C)Citizen or resident test
D)Residency test
13
A qualifying relative must earn less than $ _____ for the year 2007.
A)$ 5,000
B)$ 5,150
C)$ 3,300
D)$ 3,400
14
The basic standard deduction in 2007 for a single taxpayer who is 67 years old and not blind is:
A)$ 6,650
B)$ 5,350
C)$ 6,400
D)$ 7,850
15
The basic standard deduction in 2007 for a Head of Household taxpayer who is 43 years old and not blind is:
A)$ 9,150
B)$ 7,850
C)$ 7,550
D)$ 5,350
16
For a single taxpayer, personal and dependency exemptions are subject to phaseout when AGI exceeds:
A)$195,500
B)$178,550
C)$156,400
D)$278,900
17
What is the limit on the FICA amount for 2007?
A)$100,000
B)$ 84,200
C)$ 94,200
D)$ 97,500
18
The tax liability for a married couple with taxable income of $142,315 is:
A)$ 24,973
B)$ 28,841
C)$ 39,848
D)$ 28,426.
19
The tax liability for a single taxpayer with taxable income of $58,440 is:
A)$ 9,781
B)$ 8,766
C)$ 11,030
D)$ 14,610
20
The IRS can impose a ________ penalty on the tax due on a return where there is negligence.
A)20%
B)25%
C)5%
D)75%





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