income tax

scenario 6 13. Because Deborah only has Medicare Part A coverage, Matthew must make a shared responsibility payment.

True False

14. Matthew\'s most advantageous allowable filing status is Single.

True False

15. The amount Matthew paid for the meal plan is a qualified expense for the American opportunity credit.

True False

16. The amount of tuitionincluded as a qualified expense in the calculation of Matthew\'s 2014 American opportunity credit is $2,600.

True False

17. Matthew\'s cancelled debt from Form 1099-C is reported on Form 1040, line 7 as wages.

True False

18. Which exception can Matthew use to avoid the 10% additional tax on the early distribution from his IRA on Form 5329?

A. Distribution made for higher education expenses B. Distribution made for purchase of a first home C. Distribution due to total and permanent disability D. He does not qualify for an exception

scenario 7 19. Is Head of Household the most advantageous allowable filing status Kelly can use?

Yes No

20. Because Brian is disabled and meets the other tests, Kelly can claim him as a qualifying child for the earned income credit.

True False

21. What is Kelly\'s total federal income tax withholding?

A. $2,200 B. $2,380 C. $2,620 D. $2,800

22. What is the credit for child and dependent care expenses on Form 2441, line 11? $_______.

23. Kelly has three qualifying children for the child tax credit.

True False

24. Kelly must pay the 10% additional tax on the distribution from her 401(k) because she is under 59 1/2 years old and does not qualify for an exception.

True False scenario 8

25. What is the total taxable interest income shown on Line 8a of Form 1040?

A. $70 B. $95 C. $150 D. $245

26. How does the code Q on Elliot\'s Form 1099-R from Essex Bank affect the return?

A. The entire $4,500 distribution is taxable. B. Half of the $4,500 distribution is taxable. C. There is a 10% additional tax on the distribution. D. The entire $4,500 is not taxable.

27.What is the amount shown on Form 1040, Line 13 – Capital gain or loss?

A. A gain of $516 B. A gain of $1,239 C. A gain of $1,614 D. A gain of $1,689

28. How much of the $17,500 gross distribution reported on Form 1099-R is taxable in 2014? $ ________.

29. Is Elliot\'s social security income taxable?

A. No, because their total income is less than $32,000. B. No, social security benefits are never taxable. C. Yes, a portion of the social security income is taxable. D. Yes, all of the social security income is taxable

30. How should Elliot report his gambling winnings?

A. $2,500 should be reported on Form 1040, line 21. B. He does not need to report his winnings. C. He subtracts his Form W-2G withholding from winnings and reports $2,250 on Form 1040, line 21. D. He includes the W2-G amount on Form 1040, line 7.

31. What is the amount of the foreign tax credit on Form 1040, page 2? $ ________.

32. Are the Blackburns entitled to claim an earned income credit for 2014?

A. No, because their investment income exceeds the amount allowed to claim the credit. B. No, Elliot is over the age of 65. C. No, Carter is not a qualifying child for purposes of the EIC. D. Yes, they are eligible for the credit. scenario 9

33. Where should Enrique\'s cash income be reported?

A. Form 1040, Line 7 B. Schedule C-EZ or C C. Form 1040, Line 21 D. Cash income does not have to be reported

34. What is Enrique\'s mileage expense deduction (at the standard mileage rate) for his business as a personal trainer?

A. $420 B. $1,120 C. $1,540 D. $2,212

35. Which item cannotbe deducted by Enrique as a business expense?

A. Nutritional supplements B. Business liability insurance C. Tolls to get to his clients\' homes D. Business license

36. How does Enrique\'s self-employment tax affect his tax return?

A. Enrique\'s self-employment tax is not reported anywhere on Form 1040. B. A portion of the amount is deducted as a business expense on Schedule C-EZ or C. C. The self-employment tax is shown on Form 1040, Other Taxes section, and the full amount is deducted on Schedule A, Taxes You Paid section. D. The self-employment tax is shown on Form 1040, Other Taxes section, and the deductible part is an adjustment on Form 1040, page 1.

37. What is the amount Enrique can take as a student loan interest deduction?

A. $0 B. $1,373 C. $2,500 D. $2,745

38. What are Enrique’s total itemized deductions on Schedule A, line 29?

A. $6,706 B. $6,952 C. $7,906 D. $8,286

39. The amount of Enrique\'s retirement savings contributions credit in the Tax and Credits section of Form 1040 is $120.

True False

40. Enrique is not able to pay the entire balance due by April 15. What are his options?

A. He can submit a Form 9465 Installment Agreement Request. B. He can contact the IRS for a full pay 120-day agreement. C. He can pay using his credit card. D. Any of the above.

Attachments:

advanced-scen....PDF

13.docx