1040 Preparation and Planning 1: Fundamentals (2013 Edition)

The purpose of this series of courses is to bring the tax preparer "up-to-speed" in the most efficient way possible for the tax preparation season. It offers quick answers and hands-on help for tax return preparation that has become increasingly complex by several recently passed tax Acts. The first course in this series will introduce you to the fundamentals of federal income tax and will give you an overview of the general income tax structure.
Final Exam > Results Page

final exam score:
93%

Question 1
Correct
Which of the following tax forms cannot be used by a U.S. citizen?

Form 1040A

Form 1040EZ

Form 1040

(You Answered) (Correct Answer) Form 1040NR

Question 2
Correct
A head of household who is under age 65 (and not someone’s dependent) must file a return in 2012 if gross income exceeds (assume no self-employment income):

$9,750

(You Answered) (Correct Answer) $12,500

$13,950

$19,500

Question 3
Correct
In 2012, a married couple, both of whom are age 65, must file a return if their combined gross income exceeds:

$3,950

$19,500

$20,650

(You Answered) (Correct Answer) $21,800

Question 4
Correct
Regardless of income, a return must be filed if the taxpayer:

Is self-employed with net earnings of $400 or more

Owed any penalty taxes with respect to an IRA

Has liability for household employees

(You Answered) (Correct Answer) All of the above

Question 5
Incorrect
Which of the following expenses is not deductible from gross income?

One-half of self-employment tax

(Correct Answer) Charitable contributions

Alimony payments

Moving expenses

Question 6
Incorrect
Assuming spouses do not live apart for the entire year, joint filing is not a prerequisite to claiming:

Deduction for spousal IRA contributions

Earned income credit

(Correct Answer) Net operating losses

Dependent care credit

Question 7
Correct
A taxpayer seeking innocent spouse relief must do all of the following except:

Show that he did not know or have reason to know that there was an understatement of tax.

Meet one of three ways to obtain relief.

File for relief.

(You Answered) (Correct Answer) Prove that the understatement was substantial.

Question 8
Correct
Which of the following is not a requirement in determining whether a taxpayer who is legally married can be considered unmarried for head of household filing-status purposes?

An individual’s spouse must not have lived in his home for the last six months of the tax year.

An individual must maintain a household that, for more than one-half the year, was the principal residence of the taxpayer’s dependent child.

An individual must file a separate return.

(You Answered) (Correct Answer) An individual’s home must be, for the entire year, the main home of his child, stepchild, or adopted child whom he, or the noncustodial parent, can properly claim as a dependent.

Question 9
Incorrect
Malcolm and Glenda Jackson divorced on June 1, 2012. Their one minor child lived with Glenda all of 2012. Glenda worked all year to keep the home for herself and her minor child. The divorce decree awarded the exemption for the child to Malcolm. Glenda’s proper filing status is:

(You Answered) Single

(Correct Answer) Head of household

Married filing separately

Married filing jointly

Question 10
Correct
John and Linda Smith, a childless married couple, lived apart for all of 2012. On December 31, 2012, they were legally separated under a decree of separate maintenance. Based on these facts, which of the following is the only filing status choice available to them for 2012?

(You Answered) (Correct Answer) Single

Head of household

Married filing jointly

Married filing separately

Question 11
Correct
A married couple has one minor child. What is the maximum amount they can claim as a deduction for their exemptions in 2012?

$3,800

$7,600

(You Answered) (Correct Answer) $11,400

$15,200

Question 12
Incorrect
In figuring the support test for a dependent who is a qualifying relative, which item is not taken into account?

(Correct Answer) Life insurance premiums

Clothing

Dental care

Entertainment costs

Question 13
Correct
Three sisters contribute to the support of their elderly father as follows: Abigail, 5%; Betty, 30%; and Christine, 45%. Because they, in total, contribute more than half their father’s support, they can sign a multiple support obligation to assign one sister the right to claim the exemption for the father. Which statement is correct?

Only Christine, who contributed the most, can claim the exemption.

(You Answered) (Correct Answer) Only Betty or Christine can claim the exemption.

Any of the three sisters can claim the exemption.

None of the sisters can claim the exemption, because none contributed more than 50% of the father’s support.

Question 14
Correct
A qualifying child includes all of the following people except:

(You Answered) (Correct Answer) Taxpayer’s natural child who is age 26 and not permanently disabled

Taxpayer’s stepchild who is age 12

Taxpayer’s adopted child who is age 3

Taxpayer’s natural child who is age 15

Question 15
Correct
Under the definition of a qualifying child, which test differs from the tests applied for a dependent who is not a qualifying child?

(You Answered) (Correct Answer) Gross income test

Joint return test

Citizenship or residency test

Social Security number