Answer 20 simple tax questions and you will have answer on the question: "Do I have to have my taxes done by specialist or am I able to do my own taxes?"
HERE IS YOUR QUIZ
GOOD LUCK!
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1. Joe is 37 years old. His wife died during the tax year and he has not remarried. His deceased wife had no income. He has two minor children living with him. Joe paid all of the costs for keeping up his home for the tax year and he has paid for all of the support of his wife and these children. The filing status with the lowest tax rate which Joe qualifies for is:
A. Qualifying widower with dependent child.
B. Married filing separately.
C. Head of household.
D. Married filing jointly.
2. If a taxpayer has capital gin dividends, but has no other capital gain:
A. Capital gain distributions must be put on Schedule B
B. No Schedule D is required and the amount is put directly on the Form 1040.
C. Dividends and capital gains dividends may be added together on Schedule B.
D. It must be combined with interest on the Schedule B.
3. You incurred the following expenditures in connection with your rental property. Which of them should be capitalized?
A. New roof
B. Install new cabinets.
C. Pave driveway
D. All of the above
4. You purchased a heating, ventilating and air conditioning (HVAC) unit for your rental property on December 15th. It was delivered on December 28th and was installed and ready for use on January 2nd. When should the HVAC unit be considered placed in service?
A. December 15th
B. December 28th
C. December 31st
D. January 2nd
5. Mary and Fred filed a joint tax return. They have a son Fred, jr and daughter Joan who are both teenagers and live at home. Fred Jr. has interest income of $400 and Joan has interest income of $600. Mary's widowed mother has lived with them for the entire year. Mary's mother receives a pension of $3,000, interest income of $2,000 and dividends of $1,000. Mary and Fred fully support Mary's mother with the exception of her clothing, the balance of her income she invests. How many exemptions can Mary and Fred claim on their joint tax return?
A. 2
B. 3
C. 4
D. 5
6. Don and Joyce have adjusted gross income of $85,000. Their two children Mary, age 14, and David, age 20 (completed his education in the prior year), lived with them all year. Mary had interest income of $300. David had interest income of $600 and wages of $6,500. The parents provided over 50% of the support of both children. How many exceptions can Don and Joyce claim?
A. 2
B. 3
C. 4
D. 1
7. John, a single taxpayer, received interest income of $40,000 consisting of the following: certificate of deposit $6,000 (which is reinvested), saving account $4,000, City of Glendale Municipal Bond $8,000, mortgage note $12,000, Cobb County Municipal Bond $7,000, and corporate bond $3,000. What is the amount of taxable interest income he will report on his Form 1040?
A. $40,000
B. $25,000
C. $19,000
D. $33,000
8. To meet the dependency test of "Gross Income", the taxpayer had to consider the following income received by his mother who was 81 years of age: Social Security $3,600, municipal bond interest $2,200, corporate bond interest $1,200, stock dividends $900, rental income $1,200, rental expenses $200, and wages $600. The mother lived with the taxpayer the entire year. What is correct gross income of the mother for this test?
A. $9,700
B. $2,900
C. $5,100
D. $3,900
9. John and Mary had a pipe burst in the basement of Your rental home. They were unable to reach you on vacation. They had the plumber come out and repair the pipe and damage. They paid the plumber $575. They deducted $575 from their rent of $5,000. How much rent should be considered income that month?
A. $5,000
B. $4,425
C. $5,575
D. $5,745
10. You own a vacation home on Amelia Island, Florida, which you rented for 10 days in 2004. In 2004 , rental expenses were $2,000 and rental income was $5,000. How much of the rental income should be reported on the tax return?
A. $5,000
B. $3,000
C. $0
D. $7,000
11. John, who is 63 years of age and single, has wages of $10,000, interest income of $3,000, dividends of $2,000, municipal bond interest of $3,000, state unemployment compensation of $4,000 and Social Security benefits of $4,000. What is John's adjusted gross income?
A. $26,000
B. $22,400
C. $22,000
D. $19,000
12. During the year 2004, Dan had these expenses for his rental house:
1. Replaced a screen in the storm door.
2. Replaced the heating system
3. Sowed grass seed in some bare spots on the lawn
4. Built a detached two-car garage.
5. Installed a new dishwasher.
6. Bought a welcome mat for the front door.
Which of these items must be depreciated rather than deducted as an expense on his Schedule E?
A. 1,3,4, and 5
B. 2,4,5, and 6
C. 2,4, and 5
D. 3,4, and 6
13. Generally, the taxpayer may deduct the cost of medical expenses on Schedule A for which of the following?
A. Doctor prescribed birth control pills
B. Controlled substances like marijuana that are in violation of federal law.
C. Trips for general health improvement
D. Marriage counseling
14. To qualify for a medical expense deduction as your dependent, a person must be your dependent either at the time the medical services were provided or at the time you paid the expenses. A person generally qualifies as your dependant for purposes of the medical expense deduction if:
A. The person would qualify as a dependant except for the amount of gross income
B. The person was a foreign student staying briefly at your home.
C. The person is your sibling's unmarried adult child
D. The person is the unrelated caregiver for your elderly parents.
15. Which of the following costs are deductible on Form 1040, Schedule A as taxes?
1. Personal property tax on an airplane.
2. Garbage pickup itemized on the real estate bill
3. Real estate tax on property owned in Canada
4. Sales tax paid on the purchase of your personal car.
A. None of above
B. 1 and 3
C. 2 and 4
D. All of the above
16. Which of the following organizations qualify for deductible contributions (not dues)?
A. A Public Library in your city
B. Salvation Army
C. Churches
D. All of the above
17. Which of the following expenses are deductible, but subject to the 2% limitation on Form 1040, Schedule A, Job Expenses and Most Other Miscellaneous Itemized Deductions?
A. License of a self-employed plumber
B. Appraisal fees on the sale of your personal residence
C. Uniforms for a UPS delivery person
D. The cost of hauling tools to work in the trunk of your car.
18. Hollie filed as head of household and would like to take the child tax credit for Amanda in 2004. Which of the following statements is incorrect regarding the child tax credit?
A. Amanda must be under 18 at the end of the tax year
B. Hollie must claim Amanda as a dependent
C. All or part of the child tax credit may be refundable
D. If Hollie's adjustment gross income is above $75,000, her credit will be reduced or eliminated.
19. Which of the following is earned income for earned income tax credit purposes?
A. Unemployment compensation
B. Alimony
C. The wages of a minister who has an exemption from self-employment tax
D. The wages of an inmate working in the prison laundry.
20. Clyde, a single person, sold his principal residence for $700,000. He purchased his home in 1995 for $150,000 and lived there until he sold it. He paid for capital improvements of $75,000, paid real estate commissions of $36,000 and other settlement costs of $4,000. How much taxable gain must Clyde report?
A. None
B. $185,000
C. $435,000
D. $225,000
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