5 Written Questions
5 Multiple Choice Questions
- The additional tax liability that results for a married couple compared with what their tax liability would be if they were not married and filed separate returns.
- An unmarried individual who maintains a household for another and satisfies certain conditions set forth in § 2(b). Such status enables the taxpayer to use a set of income tax rates [see § 1(b)] that are lower than those applicable to other unmarried individuals [§ 1(c)] but higher than those applicable to surviving spouses and married persons filing a joint return [§ 1(a)]. See also tax rate schedules.
- Certain personal expenditures allowed by the Code as deductions from adjusted gross income. Examples include certain medical expenses, interest on home mortgages, state income taxes, and charitable contributions. Itemized deductions are reported on Schedule A of Form 1040. Certain miscellaneous itemized deductions are reduced by 2 percent of the taxpayer's adjusted gross income. In addition, a taxpayer whose adjusted gross income exceeds $100,000 ($50,000 for married filing separately) must reduce the itemized deductions by 3 percent of the excess of adjusted gross income over $100,000. For 2009, the indexed amount for the $100,000 is $166,800, and the indexed amount for the $50,000 is $83,400. Medical, casualty and theft, and investment interest deductions are not subject to the 3 percent reduction. The 3 percent reduction may not reduce itemized deductions that are subject to the reduction to below 20 percent of their initial amount. Beginning in 2006, this reduction is subject to partial phaseout. For 2009, two-thirds of the reduction is phased out, and for 2010 all of the reduction is phased out. §§ 63(d), 67, and 68.
- A tax table that is provided for taxpayers with less than $100,000 of taxable income. Separate columns are provided for single taxpayers, married taxpayers filing jointly, head of household, and married taxpayers filing separately. § 3.
- Rate schedules that are used by upper-income taxpayers and those not permitted to use the tax table. Separate rate schedules are provided for married individuals filing jointly, head of household, single taxpayers, estates and trusts, and married individuals filing separate returns. § 1.
5 True/False Questions
Kiddie tax → A tax table that is provided for taxpayers with less than $100,000 of taxable income. Separate columns are provided for single taxpayers, married taxpayers filing jointly, head of household, and married taxpayers filing separately. § 3.
Abandoned spouse → The joint return tax rates apply for a surviving spouse. Such rates apply for the two tax years after the tax year of the death of the spouse. To qualify as a surviving spouse, the taxpayer must maintain a household for a dependent child. § 2.
Unearned income → The abandoned spouse provision enables a married taxpayer with a dependent child whose spouse did not live in the taxpayer's home during the last six months of the tax year to file as a head of household rather than as married filing separately.
Multiple support agreement → A tax credit based solely on the number of qualifying children under age 17. The maximum credit available is $1,000 per child through 2010. A qualifying child must be claimed as a dependent on a parent's tax return in order to qualify for the credit. Taxpayers who qualify for the child tax credit may also qualify for a supplemental credit. The supplemental credit is treated as a component of the earned income credit and is therefore refundable. The credit is phased out for higher-income taxpayers. § 24.
Qualifying relative → An individual who, as to the taxpayer, satisfies the relationship, abode, and age tests. To be claimed as a dependent, such an individual must also meet the citizenship and joint return tests and not be self-supporting. §§ 152(a)(1) and (c). See also personal and dependency exemptions.