1. Rick and Tina are married and filing a joint tax return for 2016. Their two children (Sarah, age 13 and Mike, age 10) and Tina’s mother lived with them all year. During 2016, Rick and Tina provided all the support for their children and more than half of the support for Tina's mother. The children each had interest income of less than $400. Tina's mother received $3,500 from a taxable pension, $2,500 of dividends, and $2,000 of interest income. How many exemptions can Rick and Tina claim on their 2016 tax return? a) 3 b) 4 c) 5 d) 6
2. Rubén and Jeanette’s 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Neither is required to file a tax return. They do not have a child and they meet all other tests. Taxes were taken out of their pay so they file a joint return only to get a refund of the withheld taxes. Additionally, Rubén and Jeanette provide more than half of the support for their son and daughter-in-law. How many exemptions can Ruben and Jeanette claim on their 2016 income tax return? a) 1 b) 2 c) 3 d) 4
3. Sally receives $300 each month for sick pay from her employer for the three months she is on sick leave. What amount will she need to include as income on her tax return? a) $0 b) $300 c) $600 d) $900
4. It is important to use the correct filing status when filing the taxpayer’s income tax return. It can impact the tax benefits he or she receives, the amount of his or her standard deduction and the amount of taxes he or she pays. All of the following statements regarding filing status are true except:
a) If more than one filing status fits the taxpayer, he or she should choose the one that allows him or her to pay the lowest taxes
b) If a married couple decides to file their returns separately, each person’s filing status would generally be Married Filing Separately
c) The Head of Household status generally applies if the taxpayer is not married and has paid more than half the cost of maintaining a home for him or herself and claims an exemption for a qualifying person
d) Qualifying Widow(er) with Dependent Child status only applies for the year the taxpayer’s spouse passes away and the taxpayer must have a dependent child and meet certain other conditions.