Taxpro Basic Income Tax Quiz! Trivia
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Questions and Answers
- 1.
Please explain your answer from Question 22 (Whether Bob should/should not file a tax return)
- 2.
What is Adjusted Gross Income?
- A.
Your after-tax income
- B.
Your taxable income after deductions
- C.
Your taxable income before deductions
- D.
None of the above
Correct Answer
C. Your taxable income before deductionsExplanation
Adjusted Gross Income refers to an individual's taxable income before any deductions are made. It is the total income earned from all sources, such as wages, salaries, investments, and business profits, minus specific deductions like student loan interest, self-employment tax, and contributions to retirement plans. This amount is used to determine an individual's eligibility for certain tax benefits, credits, and deductions. Therefore, the correct answer is "Your taxable income before deductions."Rate this question:
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- 3.
Which of the following is NOT an itemized deduction?
- A.
The cost of utilities such as gas and water
- B.
Medical Expenses
- C.
Real Estate Taxes
- D.
Church Donations
Correct Answer
A. The cost of utilities such as gas and waterExplanation
The cost of utilities such as gas and water is not an itemized deduction because it is considered a personal expense and not directly related to the production of income or business expenses. Itemized deductions are expenses that can be subtracted from a taxpayer's adjusted gross income to reduce their taxable income. Medical expenses, real estate taxes, and church donations are all examples of itemized deductions that can be claimed on a tax return.Rate this question:
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- 4.
Which of the following is NOT a reason to file an amendment?
- A.
You want to choose a different preparer
- B.
You chose the wrong filing status
- C.
You forgot to add a dependent
- D.
You did not include a taxable source of income (W2, interest,etc)
Correct Answer
A. You want to choose a different preparerExplanation
One of the reasons to file an amendment is if you want to correct a mistake or error on your tax return. However, wanting to choose a different preparer is not a valid reason to file an amendment. The choice of preparer does not impact the accuracy or completeness of the tax return itself.Rate this question:
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- 5.
Which form does your employer need to know about your tax-related allowance information?
- A.
W-2
- B.
W-4
- C.
W-10
- D.
1099-G
Correct Answer
B. W-4Explanation
The correct answer is W-4. The W-4 form is used by employees to provide their employer with information about their tax withholding allowances. This form helps the employer determine how much federal income tax to withhold from the employee's paycheck. It includes details such as the employee's filing status, number of dependents, and any additional income or deductions. By filling out the W-4 form accurately, employees can ensure that the correct amount of taxes is withheld from their wages throughout the year.Rate this question:
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- 6.
A taxpayer is considered Single if, on the last day of the tax year, the taxpayer was either:
- A.
Never Married
- B.
Legally Separated or Divorced
- C.
Spouse decides to file separate return
- D.
Both A&B
Correct Answer
D. Both A&BExplanation
The correct answer is Both A&B. A taxpayer is considered Single if, on the last day of the tax year, they were either never married or legally separated or divorced. This means that if the taxpayer has never been married or if they were married but legally separated or divorced by the last day of the tax year, they can file their taxes as Single.Rate this question:
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- 7.
Taxable income is any income that is subject to federal income tax. All taxable income must be reported on a tax return unless the amount is so small that the individual is not required to file a return. Most employment compensation is taxable, including
- A.
Tips and compensation for personal services
- B.
Wages and Salaries
- C.
Bonuses and Commissions
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
All of the options listed (tips and compensation for personal services, wages and salaries, bonuses and commissions) are forms of employment compensation, which is generally considered taxable income. Therefore, all of the options are correct and must be reported on a tax return unless the individual's income is below the filing threshold.Rate this question:
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- 8.
Self Employment income or losses are reported on which form?
- A.
Schedule C-EZ , Net Profit or Loss from Business
- B.
Schedule C, Net Profit or Loss from business
- C.
Either A or B
- D.
None of the above
Correct Answer
C. Either A or BExplanation
Self-employment income or losses are reported on either Schedule C-EZ or Schedule C, which both pertain to the net profit or loss from a business. Both forms are used to report income and expenses related to self-employment activities. Therefore, the correct answer is either A or B.Rate this question:
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- 9.
The standard deduction can be taken on Forms.
- A.
1040
- B.
1040EZ
- C.
1040A
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
The standard deduction can be taken on Forms 1040, 1040EZ, and 1040A. This means that individuals can claim a standard deduction on their tax returns regardless of which form they use to file their taxes. The standard deduction is a fixed amount that reduces the taxpayer's taxable income, resulting in a lower tax liability. By offering the standard deduction on multiple forms, the IRS aims to simplify the tax filing process for individuals with different financial situations and filing requirements.Rate this question:
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- 10.
For purposed of the Earned Income Credit, a taxpayer has a qualifying child if the child meets certain tests including
- A.
Relationship & Residency Test
- B.
School Test
- C.
Spousal Support Test
- D.
Luxury Car Test
Correct Answer
A. Relationship & Residency TestExplanation
The correct answer is Relationship & Residency Test. In order for a taxpayer to claim the Earned Income Credit, they must have a qualifying child who meets certain tests. One of these tests is the Relationship & Residency Test, which requires that the child be the taxpayer's son, daughter, stepchild, foster child, or a descendant of any of these, and that the child has lived with the taxpayer for more than half of the year. This test ensures that the taxpayer has a close relationship with the child and that the child is a resident of the taxpayer's household.Rate this question:
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- 11.
To meet the Earned Income Credit Age Test, the child must be:
- A.
Under Age 19 at the end of the year
- B.
Full Time Student under age 24 at the end of the year
- C.
Permanently and totally disabled regardless of age
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
The Earned Income Credit Age Test requires the child to meet one of the following criteria: be under age 19 at the end of the year, be a full-time student under age 24 at the end of the year, or be permanently and totally disabled regardless of age. Therefore, the correct answer is "All of the above".Rate this question:
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- 12.
To qualify for the American Opportunity or Lifetime Learning Credit, a taxpayer must have paid higher education expenses that qualify as tuition and related expenses. Tuition expense are tuition and fees required for enrollment or attendance at an eligible educational institution. Related expensed can include fee for
- A.
Course related books
- B.
Course related supplies and equipment
- C.
Student activity fees
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
The correct answer is "All of the above" because all of the listed expenses - course-related books, course-related supplies and equipment, and student activity fees - qualify as related expenses for the American Opportunity or Lifetime Learning Credit. These expenses are considered part of the overall cost of education and can be used to claim the tax credits.Rate this question:
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- 13.
Dependency exemptions involve individuals other than the taxpayer or spouse. A dependent is a person other than the taxpayer or spouse who entitles the taxpayer to claim a dependency exemption. Some examples of dependents include:
- A.
Child, Stepchild, Brother, Sister, Family Friend
- B.
Child, Stepchild, Brother, Sister, Parent
- C.
Child, Stepchild, Brother, Sister, Bingo Buddy
- D.
Child, Stepchild, Brother, Sister, Long-Time Pet
Correct Answer
B. Child, Stepchild, Brother, Sister, ParentExplanation
The correct answer is "Child, Stepchild, Brother, Sister, Parent". Dependency exemptions can be claimed for individuals who are not the taxpayer or their spouse, such as children, stepchildren, siblings, and parents. These individuals must meet certain criteria to qualify as dependents, including living with the taxpayer for a certain period of time and receiving financial support from the taxpayer.Rate this question:
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- 14.
To meet the Support Test:
- A.
A child cannot have provided more than 20% of his or her own support during the tax year
- B.
A child cannot have provided more than 45% of his or her own support during the tax year
- C.
A child cannot have provided more than 50% of his or her own support during the tax year
- D.
All of the above
Correct Answer
C. A child cannot have provided more than 50% of his or her own support during the tax yearExplanation
To meet the Support Test, a child cannot have provided more than 50% of his or her own support during the tax year. This means that the child must rely on others for at least 50% of their financial needs. If the child provided more than 50% of their own support, they would not meet the criteria for being claimed as a dependent for tax purposes.Rate this question:
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- 15.
A non-refundable credit is a credit in which taxpayers receive a credit in the form of a payment.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
A non-refundable credit is a credit that taxpayers receive in the form of a reduction in their tax liability, rather than as a payment. Unlike refundable credits, which can result in a payment to the taxpayer if the credit exceeds their tax liability, non-refundable credits can only reduce the amount of tax owed to zero. Therefore, the statement that a non-refundable credit is a credit in which taxpayers receive a credit in the form of a payment is false.Rate this question:
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- 16.
Federal income tax withheld is reported to the taxpayer on:
- A.
Forms W2
- B.
Forms 1099-INT
- C.
Form 1099-R
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
Federal income tax withheld is reported to the taxpayer on Forms W2, Forms 1099-INT, and Form 1099-R. Form W2 is used by employers to report wages, tips, and other compensation paid to employees, as well as the amount of federal income tax withheld from their pay. Form 1099-INT is used to report interest income earned, and Form 1099-R is used to report distributions from pensions, annuities, retirement plans, and IRAs. Therefore, all of the above forms report federal income tax withheld to the taxpayer.Rate this question:
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- 17.
Certain government payments, such as unemployment and state tax refunds, are reported on Form:
- A.
W2
- B.
1099 MISC
- C.
W2-G
- D.
1099-G
Correct Answer
D. 1099-GExplanation
Form 1099-G is used to report certain government payments, including unemployment compensation and state tax refunds. This form is issued by the government agency responsible for making the payments and is provided to the recipient to report the amount of income received. Therefore, the correct answer is 1099-G.Rate this question:
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- 18.
Taxpayers who bought their own health care policy under the Affordable Care Act requirements may be eligible for a tax credit. It's known as:
- A.
Medical Insurance Credit
- B.
Obamacare Assistance Credit
- C.
Premium Tax Credit
- D.
Marketplace subsidy
Correct Answer
C. Premium Tax CreditExplanation
The correct answer is Premium Tax Credit. Under the Affordable Care Act, taxpayers who purchased their own health care policy may be eligible for a tax credit known as the Premium Tax Credit. This credit helps to offset the cost of health insurance premiums for individuals and families with low to moderate incomes. It is designed to make health insurance more affordable and accessible for those who qualify.Rate this question:
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- 19.
If you have health insurance through your employer, you still need to enroll in health insurance provided by the government.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
If you have health insurance through your employer, you do not need to enroll in health insurance provided by the government. Employer-provided health insurance is considered as a form of private health insurance, which satisfies the requirement of having health coverage. Therefore, there is no need to enroll in government-provided health insurance if you already have coverage through your employer.Rate this question:
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- 20.
What is the website to the IRS?
- A.
Www.irs.gov
- B.
Www.taxes.irs.com
- C.
Www.taxes.com
- D.
Www.irs.taxes.gov
Correct Answer
A. Www.irs.govExplanation
The correct answer is www.irs.gov because the IRS (Internal Revenue Service) is a government agency responsible for collecting taxes in the United States, and their official website is www.irs.gov. The other options provided are not the official website of the IRS.Rate this question:
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- 21.
A taxpayer with no earned income can still qualify for earned income credit.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
The earned income credit is a tax credit designed to benefit low to moderate-income individuals and families. To qualify for this credit, the taxpayer must have earned income from employment or self-employment. Since the statement mentions that the taxpayer has no earned income, it means they do not meet the eligibility criteria for the earned income credit. Therefore, the correct answer is false.Rate this question:
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- 22.
Bob is 27 years old. No one can claim him as a dependent. His gross income was $17,000 during the tax year. Based only on this information, should Bob file a tax return.
- A.
Yes
- B.
No
- C.
Bob is not required to file a tax return
Correct Answer
A. YesExplanation
Based on the given information, Bob should file a tax return. Despite not being claimed as a dependent, the fact that his gross income was $17,000 during the tax year indicates that he earned an income above the minimum threshold set by the IRS for filing a tax return. Therefore, Bob is required to file a tax return.Rate this question:
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- 23.
What is the personal exemption amount for 2014?
- A.
$3500
- B.
$4000
- C.
$3950
- D.
$6,200
Correct Answer
C. $3950Explanation
The personal exemption amount for 2014 is $3950. This is the amount that individuals can deduct from their taxable income, reducing the amount of income that is subject to tax.Rate this question:
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- 24.
Freda, who is a clerk, received Form W-2, reporting federal income tax withholding of $1,000. She also received Form 1099-INT from her bank, which reflected federal income tax withholding of $50. The correct total withholding to report on her return is
- A.
$1000
- B.
$1050
- C.
$50
- D.
Not required to report withholding
Correct Answer
B. $1050Explanation
The correct total withholding to report on her return is $1050. This includes the federal income tax withholding of $1000 reported on Form W-2 and the additional federal income tax withholding of $50 reported on Form 1099-INT. Both amounts should be added together to get the total withholding amount to report on her return.Rate this question:
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Current Version
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Mar 22, 2023Quiz Edited by
ProProfs Editorial Team -
Jan 09, 2015Quiz Created by
TaxPro Financial
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