What is meant by compensation for services? Give some examples.
> Explain the three tests associated with deductibility of moving expenses.
> What are the qualifications to be eligible for a Health Savings Account (HSA) deduction?
> Explain the limitations associated with the deductibility of student loan interest.
> Juan, who is single, is a self-employed carpenter and is also an employee of Frame It, Inc. His self-employment net income is $35,000, and he received a W-2 from Frame It for wages of $25,000. He is covered by his employer’s pension plan, but his emplo
> Who is eligible to take an above-the-line AGI deduction for educator expenses and what is the maximum amount of the permitted deduction?
> On July 1, 2017, Rene, a cash-basis taxpayer, purchased $500,000 of the newly issued bonds of Acce Corporation for $452,260. The 10-year bonds carry an interest rate of 8% and were sold to yield 9.5%. What amount of interest income must Rene report in
> Concerning the exemption for U.S. Savings Bond interest used for education expenses, what are the lower and upper income limitations for married taxpayers, and how is the exemption determined when taxpayer income falls between the limitation amounts?
> The interest imputation rules indirectly use a market rate of interest. What is meant by a market rate of interest?
> Why were the interest imputation rules created?
> A preparer tax identification number must be obtained by Only CPA’s, attorneys, and enrolled agents. Only individuals who are not CPA’s, attorneys or enrolled agents. Any individual who is paid to prepare a tax return. d. Only individuals who prepare
> A paid preparer must: Ignore a conflict of interest when representing a client before the IRS. Charge a contingent fee. Sign all tax returns he or she prepares. d. Provide records requested by the IRS in all circumstances.
> A paid preparer must not Cash a client’s IRS check. Charge a reasonable fee. Inform a client if the preparer makes a mistake on the client’s tax return. d. Provide a client with a copy of his or her return.
> Which of the following is (are) primary sources of tax authority? Statutory sources. Administrative sources. Judicial sources. All of the above.
> Which of the following trial court(s) hear tax cases? U.S. Tax Court. U.S. district courts. U.S. Court of Federal Claims. All of the above.
> Are the moving expenses of other people besides the taxpayer deductible and, if so, what are the requirements for deductibility?
> Which of the following refers to an income tax regulation? Reg. §1.162-5. Reg. §20.2032-1. Reg. §25.2503-4. Reg. §31.3301-1.
> Which of the following types of IRS Regulations have the greatest strength of authority? General or Final Regulations. Legislative Regulations. Proposed Regulations. Temporary Regulations.
> Which of the following is a statutory source of tax authority? Internal Revenue Code. Regulations. Revenue Rulings. Tax Court decision.
> A tax rate that decreases as the tax base increases is an example of what kind of tax rate structure? Progressive. Proportional Regressive. Recessive.
> Wanda and Austin are under the age of 65 and they file their tax return as married filing jointly. They had qualifying health coverage for three months during 2017. They were not eligible for an exemption. Their household income was $77,760. What is
> Benito is age 29 and single. During all of 2017, he did not have qualifying health coverage nor was he eligible for an exemption. His household income was $47,650. What is the amount of shared responsibility payment he must report on his 2017 income
> Arno and Bridgette are married and have combined W-2 income of $75,612. They paid $344 when they filed their taxes. How much income tax did their employers withhold during the year? $7,635. $7,291. $6,947. d. The answer cannot be determined with the
> Eddie, a single taxpayer, has W-2 income of $38,189. Using the tax tables, he has determined that his tax liability is: $5,283. $3,909. $3,700. d. $3,234.
> A married taxpayer has taxable income of $47,861. You have calculated tax liability using the tax tables and using the tax rate schedules. What can you say about the two figures? Tax liability determined using the tax tables will be more than tax liab
> Sandra, a single taxpayer, has taxable income of $79,238. Using the tax tables, she has determined that her tax liability is: $11.284. $14,059. $15,545. d. $15,625.
> Fabian, a single account executive, was employed and resided in New Mexico. On July 1, 2017, his company transferred him to Florida. Fabian worked full-time for the entire year. During 2017, he incurred and paid the following expenses related to the m
> Elizabeth determined that her tax liability was $3,492. Her employer withheld $3,942 from her paychecks during the year. Elizabeth’s tax return would show: a refund of $450. a refund of $3,492. tax due of $450. d. tax due of $3,942.
> On a Form 1040EZ, the amount of the permitted deduction from income for taxpayers filing a joint return is: $1,500. $10,400. $20,800. $31,200.
> Interest income is reported to a taxpayer on a Form: W-2. W-2-INT. 1099-G. d. 1099-INT.
> Wage income is reported to a taxpayer on a Form: W-2. 1099-G. 1099-W. d. 1099-INT.
> The most complex individual income tax return is a Form: 1040. 1040A. 1040C. d. 1040EZ.
> Which of the following would disqualify a taxpayer from filing Form 1040EZ? The taxpayer is married. The taxpayer is age 66. The taxpayer received unemployment compensation. The taxpayer had adjusted gross income (line 4 of Form 1040EZ) of $101,000.
> Jennifer and Paul, who file a joint return, have taxable income of $94,625 and the following tax liability: $18,650 × 10%....................................... =$ 1,865.00 ($75,900 − $18,650) × 15%.................. = $8,587.50 ($94,625 − $75,900) × 2
> Jennifer and Paul, who file a joint return, have taxable income of $94,625 and the following tax liability: $18,650 × 10%.............................. =$ 1,865.00 ($75,900 − $18,650) × 15%...........= $8,587.50 ($94,625 − $75,900) × 25%............=$
> Which of the following is an example of a progressive tax? Federal income tax. State and local taxes levied on property. Sales tax. d. Social Security tax.
> Which of the following is an example of a regressive tax? Federal income tax. State and local taxes levied on property. Sales tax. d. Social Security tax.
> If an employer contributes to an HSA on behalf of an employee, a. Is the contribution deductible by the employee? b. Is the payment considered income to the employee?
> Margaret earned $15,000 and paid $1,500 of income tax; Mike earned $50,000 and paid $5,000 of income tax. The tax rate structure they are subject to is: Progressive. Proportional. Regressive. d. Recessive.
> Jake earned $15,000 and paid $1,500 of income tax; Jill earned $40,000 and paid $3,500 of income tax. The tax rate structure they are subject to is: Progressive. Proportional. Regressive. Recessive.
> Cameron is single and has taxable income of $84,192. Determine his tax liability using the Tax Tables and using the Tax Rate Schedule. Why is there a difference between the two amounts?
> When taxpayers file a tax return, they will either pay an additional amount or receive a refund of excess taxes paid. Briefly explain how this “settling up” process works. Why might a taxpayer pay too much during the year?
> What six criteria must a taxpayer meet in order to file Form 1040EZ?
> What is the Income Tax Formula, in simplified form?
> Xavier and his wife Maria have total W-2 income of $91,932. They will file their tax return married filing jointly. They had a total of $10,149 withheld from their paychecks for federal income tax purposes. Using the tax tables, determine the amount o
> What is the amount of the permitted deduction for single and married taxpayers who use Form 1040EZ?
> Explain why unemployment compensation is taxable.
> What federal tax forms do taxpayers normally receive to inform them of the amount of wages and interest they earned during the year?
> Discuss the characteristics of an eligible educational institution as it relates to the deductibility of student loan interest.
> What is the definition of interest?
> What type of tax rate structure is the U.S. federal income tax? Explain your answer.
> What is the definition of tax base, and how does it affect the amount of tax levied?
> Name the three types of tax rate structures and give an example of each.
> For tax year 2015 what proportion of individual income tax returns was filed on a Form 1040EZ, Form 1040A and Form 1040? What proportion was electronically filed?
> What is the most common way taxpayers pay their income tax liability during the year?
> Who must obtain a preparer tax identification number?
> IRS rules for paid tax preparers apply to what types of tax professionals?
> Define and compare these terms: average tax rate and marginal tax rate.
> Explain what is meant by regressive tax. Why the social security tax is considered a regressive tax?
> What type of tax is a sales tax? Explain your answer.
> What is a progressive tax? Why do you think the government believes it is a more equitable tax than, say, regressive tax or proportional tax?
> Give a brief history of the income tax in the United States
> Explain how to calculate the shared responsibility payment under the Affordable Care Act.
> List at least five items that paid preparers must do to comply with Circular 230.
> List at least five items that paid preparers must not do to comply with Circular 230.
> In the case of a joint return, what is the treatment of educator expenses?
> What expenses qualify as deductible educator expenses?
> Why is it important to distinguish between a property settlement and alimony?
> Refer to Question 15. How does the tax code attempt to remedy this seeming inequity? Data from question 15: Explain why self-employed taxpayers generally pay double the amount of FICA taxes that regular wage earners do.
> In January 2017, Tran incurred $1,200 of moving expenses when he moved from Des Moines, IA, to Detroit, MI. When he moved, he had no job but found one a week after moving. He stayed on that job for two months, changed to another job for four months, and
> Rica quit her job in Austin TX and moved to Seattle WA, incurring $1,500 of moving expenses, none of which was reimbursed by her employer. Upon arriving in Seattle, she sought employment and found a position three weeks later. Without regard to the time
> What are the consequences of an employer contribution to an employee’s HSA?
> Explain the purpose of a health savings account (HSA).
> In 2013, Chara incurred a loan to pay for qualified higher education expenses for her 20-year-old daughter who was a dependent. In 2017, her granddaughter graduated from college, moved away to start a new job, and ceased to be a dependent on Chara’s tax
> For purposes of the student loan interest deduction, what is an eligible educational institution?
> For purposes of the student loan interest deduction, what is modified AGI, and how is it determined?
> What are qualified education expenses for purposes of the student loan interest deduction?
> What is a qualified education loan for purposes of the student loan interest deduction?
> Congress has chosen to exempt certain income from taxation, such as scholarships, gifts, life insurance proceeds, municipal bond interest, and employee fringe benefits. Given that one of the primary purposes of the IRC is to raise revenue for the governm
> Under what circumstances are social security benefits taxable to a single taxpayer?
> Under what circumstances is a state or local income tax refund included in the taxable income of a taxpayer?
> Under what circumstances is a dividend nontaxable to a shareholder recipient?
> How are dividends taxed?
> Interest on corporate bonds is taxable to the recipient whereas interest on municipal bonds is tax-free. Would you expect that the interest rate on a corporate bond would be higher or lower than the rate on a municipal bond of comparable quality and term
> What is meant by the concept of constructive receipt?
> Are there circumstances in which income is recognized even when a cash-basis taxpayer does not receive cash? Explain.
> Define and give examples of a de minimis employee fringe benefit.
> Give three examples of miscellaneous itemized deductions. How are miscellaneous itemized deductions limited?
> How is a personal casualty loss calculated? Include in your discussion how the determination of the loss is made and limits or floors placed on personal casualties, and any exceptions to those limits.
> Define personal casualty loss. Include in your discussion the concepts of sudden, unexpected, and unusual.
> Distinguish between the tax treatment for donations to charitable organizations of cash, ordinary income property, and capital gain property.
> What is a home equity loan? Is the interest tax deductible? Are there any limits to the deductibility of home equity loan interest?
> What is qualified residence interest? Are there any limits to the deductibility of acquisition loan interest?
> What options does the taxpayer who paid foreign taxes have when considering his or her tax treatment? Which option is usually more tax beneficial?
> For 2017, how can the amount of the sales tax deduction be determined?
> Can a taxpayer take a deduction for premiums paid for health insurance? How do reimbursements from health insurance policies affect the amount of the medical deduction? What happens if an insurance reimbursement for medical expenses is received in a subs
> What is the proper tax treatment for prescription drugs obtained outside the United States, such as Canada?
> When are travel costs deductible as medical costs? How are medical travel costs calculated?
> What are the general requirements for a medical expense to be considered deductible?
> Explain the treatment of itemized deduction limitations for high-income taxpayers in 2017.
> In May 2017, Regina graduated from USC with a degree in accounting and moved to Portland to look for work. Shortly after arriving in Portland, she obtained work as a staff accountant in a local CPA firm. In her move to Portland, Regina incurred the follo
