C239 - Advanced Tax Concepts (Ch.9) test with 100% correct answers.docx, Exams of Biology

Download C239 - Advanced Tax Concepts (Ch.9) test with 100% correct answers.docx and more Exams Biology in PDF only on Docsity! C239 - Advanced Tax Concepts (Ch.9) test with 100% correct answers Dependency exemptions - answer The tax law provides an exemption for each individual taxpayer and an additional exemption for the taxpayer's spouse if a joint return is filed. An individual may also claim a dependency exemption for each dependent, provided certain tests are met. The TCJA of 2017 suspended the deduction for exemptions for tax years after 2017 (and through 2025). E-file - answer The electronic filing of a tax return. The filing is either direct or indirect. In direct filing, the taxpayer goes online using a computer and tax return preparation software. Indirect filing occurs when a taxpayer utilizes an authorized IRS e-file provider. The provider often is the tax preparer. Filing status - answer Individual taxpayers are placed in one of five filing statuses each year (single, married filing jointly, married filing separately, surviving spouse, or head of household). Marital status and household support are key determinants. Filing status is used to determine the taxpayer's filing requirements, standard deduction, eligibility for certain deductions and credits, and tax liability. Head of household - answer An unmarried individual who maintains a household for another and satisfies certain conditions set forth in § 2(b). This status enables the taxpayer to use a set of income tax rates that are lower than those applicable to other unmarried individuals but higher than those exemption for each dependent, provided certain tests are met. The TCJA of 2017 suspended the deduction for exemptions for tax years after 2017 (and through 2025). Qualifying child - answer An individual who, as to the taxpayer, satisfies the relationship, abode, and age tests. To be claimed as a dependent, such individual must also meet the citizenship and joint return tests and not be self-supporting. §§ 152(a)(1) and (c). Qualifying relative - answer An individual who, as to the taxpayer, satisfies the relationship, gross income, support, citizenship, and joint return tests. Such an individual can be claimed as a dependent of the taxpayer. §§ 152(a)(2) and (d). Standard deduction - answer The individual taxpayer can either itemize deductions or take the standard deduction. The amount of the standard deduction depends on the taxpayer's filing status (single, head of household, married filing jointly, surviving spouse, or married filing separately). For 2021, the amount of the standard deduction ranges from $12,550 (for single) to $25,100 (for married, filing jointly). Additional standard deductions of either $1,350 (for married taxpayers) or $1,700 (for single taxpayers) are available if the taxpayer is blind or age 65 or over. Limitations exist on the amount of the standard deduction of a taxpayer who is another taxpayer's dependent. The standard deduction amounts are adjusted for inflation each year. § 63(c). Surviving spouse - answer When a husband or wife predeceases the other spouse, the survivor is known as a surviving spouse. Under certain conditions, a surviving spouse may be entitled to use the income tax rates in § 1(a) (those applicable to married persons filing a joint return) for the two years after the year of death of his or her spouse. § 2(a). Tax Rate Schedules - answer Rate schedules that are used by upper-income taxpayers and those not permitted to use the tax table. Separate rate schedules are provided for married individuals filing jointly, heads of households, single taxpayers, estates and trusts, and married individuals filing separate returns. § 1. Tax Table - answer A table that is provided for taxpayers with less than $100,000 of taxable income. Separate columns are provided for single taxpayers, married taxpayers filing jointly, heads of households, and married taxpayers filing separately. § 3. Unearned income - answer Income received but not yet earned. Normally, such income is taxed when received, even for accrual basis taxpayers.