DOMAIN 1 - PRELIMINARY WORK AND COLLECTING TAXPAYERS’ DATA
ANSWERS TO REVIEW QUESTIONS 3. Which of the following taxpayers MUST file an income tax return? Use Table I from the Annex to answer questions in this section Yes. Alex earned more than $5,800 Yes. John has unearned income higher than $950 Yes, Mary applied the gross income analysis. Her gross income $6,200 ($5,400+$ 800) is larger than the gross income limit, $5,500, plus $300. No. Steve has unearned income lower than $2,400. The $12,000 Social Security is not taxable. It may be taxable if individual incomes from all sources exceed a specified amount (MAGI); as much as 85% of the total amount of Social Security benefits received may be taxable and must be included in gross income. No. Leo unearned income is lower than the $950 limit and his earned income $3,200 plus $300 ($3,500) don’t reach $5,800 limit. Yes, Esther must file return because her unearned income is higher than $3,250 limit for married taxpayer age 65 older. No. Alex earned income is not higher than the $5,800 for earned income. No. John unearned income is $800 which is lower than the larger of $950 limit for unearned income. Yes. Louis received $1,800 of unearned income which is higher than the $950 limit. No. Limit amount of unearned income of single taxpayers under age 65 is $2,400 (for age 65 or older is $3,850). Steve is blind; his $1,200 of unearned income is lower than $2,400 6. Which of the following individuals may be or not be claimed as a dependent, assuming they meet the income tests? Use Table III, IV and V from the section to answer these questions a. Yes, can be claimed as dependent (qualified relative) b. Yes, can be claimed as dependent (qualified relative) c. Yes, can be claimed if the taxpayer is divorced from the former spouse for more than 2 years and the residence, support and income test are met.
Preliminary Work and Collecting Taxpayer Data: Domain 1 - IRS Test Specification Series www 1040examprep.com (C) Copyrighted 2012. All Rights Reserved
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