Tax Chapter 1 - Filing Information

1. Filing a federal income tax return

A. Depends on how many jobs you had.
B. Depends on how many Forms W-2 you received.
C. Depends on how many states you lived in. 
D. None of the above.

2. If you don't report all of your self-employment income, your

A. Social security benefits may be lower when you retire.
B. Your employer may be obligated to terminate you.
C. Filing status may be affected. 
D. None of the above.

3. Kathy, a U.S. citizen, is 22 and correctly files as single. In 2011, she had net self-employment income of $550 after expenses. She had no other income or any tax payments. She does not have to file a federal income tax return for the tax year 2011.

True False

4. Which of the following statements is true regarding the filing of a Form 4868, Application for an Automatic Extension of Time to File, your 2011 tax return?

A. Interest is not accessed on any income tax due if a Form 4868 is filed.
B. Form 4868 provides the taxpayer with an automatic 4 months extension to file.
C. Even though you file Form 4868, you will owe interest and may be charged a late payment penalty on the amount you owe if you do not pay the tax due by the regular due date.  
D. A U.S. citizen, who is out of the country on April 17, will be allowed an additional 12 months to file as long as "Out of the country" is written across the top of Form 4868.  

5. Maria is age 18 and single. Her only income in 2011 was $600 of self employment income from selling cosmetics. Maria is not required to file for tax year 2011.

True False

6. To obtain an automatic extension of time to file an individual tax return for tax year 2011, Form 4868, Application for Automatic Extension of time to file U.S. Individual Income Tax Return, must be filed by March 15, 2010.

True False

7. Ms. Garcia owns an apartment complex. She received $5,000 in December 2011 to cover the January rents for tenants who will be on vacation January 15, 2012 when the rent is due. Although she is a cash basis taxpayer for purposes of filing her return, she uses the accrual method of accounting to maintain her books on the rental property. Since she uses the the accrual method of accounting, she should report the $5,000 in 2012.

True False

8. Interest was credited to Jane's savings account on December 31, 2010. As long as Jane leaves the interest in the account and does not withdraw it, the interest in NOT taxable to her.

True False

9. Generally, if an unmarried dependent child earns $4,200 in wages during the summer, has no tips, has $200 in interest and no income tax withheld, he would not be required to file a tax return for 2011.

True False

10. Rebecca, age 88, and Charles, age 90, are married, live together, and file jointly. During 2011, they received interest income of $3,000, dividend income of $1,500, a pension of $10,000 and Social Security of $17,000. Rebecca and Charles are NOT required to file a tax return.

True False

11. You can claim the child-care credit on Form 1040EZ.

True False

12. Which of the following would be considered a fiscal tax year?

A. 02/15/10 - 03/15/11.
B. 08/01/10 - 07/31/11.
C. 04/01/10 - 04/30/11.
D. 01/01/11 - 12/31/11.

13. In which of the following situations is NO return required to be filed for 2011?

A. Single, filing status single, under age 65, gross income $10,000.
B. Married, joint filing status, both spouses under age 65, gross income $33,000.
C. Single, filing status single, age 70, gross income $8,000.
D. Married, Separate filing status, age 65, gross income $5,000.

14. Which of the following statements regarding extensions of time to file is correct?

A. An automatic 2-month extension can be obtained by filing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.
B. An additional automatic 6-month extension can be obtained by filing Form 2688, Application for additional Extension of Time to File U.S. Individual Income Tax Return.
C. A penalty for late payment may still be charged even if an extension is granted.
D. A extension request for a 2011 individual income tax return must be filed by April 17, 2012.

15. If your spouse if a nonresident alien, your spouse must have either an SSN or an ITIN if

A. You file a joint return.
B. You file a separate return and claim an exemption for your spouse.
C. Your spouse is filing separate return.
D. Any of the above.

16. If you choose direct deposit of your refund, you

A. May be able to split the refund into two or three accounts.
B. May be able to deposit the refund in the account of any member of your family.
C. Have to have your funds deposited only in one account.
D. Have to wait three months to receive your refund in your bank account.

17. If you were due a refund but did not file a return, you generally must

A. File your return within 3 years from the date the return was due to get that refund.
B. File your return within 3 years from the date the tax paid to get that refund.
C. File your return before the end of the year to get that refund.
D. File your return before April 15, of the following year to get that refund.

18. Beginning in 2011, the following item or items are no longer in use or allowed.

A. Schedule L.
B. Schedule M.
C. Self-employed health insurance.
D. Both A and B above.

19. Identity theft occurs when someone uses your personal information such as your name, SSN, or other identifying information to commit fraud or other crimes. To reduce your risk

A. Protect your SSN.
B. Ensure your employer is protecting your SSN.
C. Be careful when choosing a tax preparer.
D. All of the above.

20. If you are a U.S. citizen or resident, whether you must file a return depends on

A. Your gross income.
B. Your filing status.
C. Your age.
D. All of the above.