1. Whether a dependent has to file a return generally depends on

A. The amount of the dependent's earned and unearned income.
B. Whether the dependent is married.
C. Whether the dependent is age 65 or older, or is blind.
D. Any of the above.

2. If a dependent's spouse itemizes deductions on a separate return, the dependent must file a return if the dependent has ________ of gross income (earned and/or unearned).

A. $5 or more.
B. $5,700 or more.
C. $5,800 or more.
D. At least $1.

3. Helena is 17. Her father claims an exemption for her on his income tax return. She worked part time and earned $6,100 in wages. She did not have any unearned income. Helena

A. Does not need to file a return.
B. Must file a return because her earned income and total income is more than $5,700.
C. Must file a return because her total income is more than $5.
D. Must file a return because her total income is more than $950.

4. A single dependent who has only unearned income under 65 years old and is not blind must file a return if the total is more than

A. $950.
B. $5,700.
C. $5.
D. $7,900

5. Mark is 17 and single. His parents can claim an exemption for him on their income tax return. He received $990 of taxable interest and dividend income. He did not work during the year. He must file a return because

A. His earned income is more than $950.
B. His unearned income and total income is more than $950.
C. His income is more than $5.
D. None of the above because his total income is not more than $2,350.

6. A parent of a child under age ______ may be able to elect to include the child's interest and dividend income on the parent's return.

A. 19.
B. 24 if a full-time student.
C. Either A or B above.
D. 14

7. Harry is 19, not blind, and a full-time college student. He does not provide more than half of his own support, and his parents claim an exemption for him on their income tax return. He received $250 taxable interest income and earned income of $2,445 from a part-time job. He has to file a return.

True False

8. Some dependents may have to file a tax return even if their income is less than the amount that would normally require them to file a return.

True False

9. A dependent must file a tax return if he or she owes

A. Alternative minimum tax.
B. Social security and Medicare taxes on tips not reported to his or her employer.
C. Social security and Medicare taxes on wages received from an employer who did not withhold these taxes.
D. Any of the above.

10. A dependent must file a tax return if he or she

A. Received any advanced earned income credit payment from his or her employers in 2010.
B. Had wages of $68 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.
C. Had net earnings from self-employment of at least $200.
D. Any of the above.

11. Even if a dependent is not obligated to file a return he or she

A. Can file only if his or her parents will not claim an exemption for him or her.
B. Income tax was withheld from his or her income.
C. Does not qualify for the earned income credit, additional child tax credit, health coverage tax credit or other credits.
D. Is not due a refund.

12. If a child cannot file his or her own return for any reason, such as age,

A. The child's parent or guardian is responsible for filing a return on his or her behalf.
B. The child should send the return unsigned.
C. The child should not file the return.
D. None of the above.

13. For federal income tax purposes, the income a child received for his or her personal services is the child's, even if the parent is entitled to and receives that income. The following is a correct statement.

A. If the child does not pay the tax due on the income, the child is not liable for the tax.
B. Deductions for payments that are made out of a child's earnings are the parent's if the payments are made by the parent.
C. If the child does not pay the tax on the income, the parent may be liable for the tax.
D. Payments you make on your child's behalf out of a child's earnings can be deducted only on your return.

14. The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to

A. $950.
B. The individual's earned income plus $300, but not over the standard deduction amount.
C. The larger of A and B above.
D. the smaller of A and B above.

15. Employers generally withhold federal income tax, social security tax, and Medicare tax from an employee's wages. If the employee claims exemption from withholding on Form W-4, the employer will not withhold

A. Social security tax.
B. Federal income tax.
C. Medicare tax.
D. Any of the above.

16. An employee can claim exemption from withholding for 2011 only if

A. For 2010, the employee had a right to a refund of all federal income tax withheld because he or she had no tax liability.
B. For 2011, the employee expects a refund of all federal income tax withheld because he or she expects to have no tax liability.
C. He or she meets both A and B above.
D. The employee's total income will be more than $950.

17. An employee who is a dependent ordinarily can claim exemption from withholding if

A. The employee's total income will be more than $950, the minimum standard deduction for 2011.
B. The employee's unearned income will be more than $300.
C. Both A and B are true.
D. None of the above.

18. A person who can be claimed as a dependent on another taxpayer's return can claim his or her own exemption if the other taxpayer does not actually claim the exemption.

True False

19. The standard deduction for a married dependent filing a separate return whose spouse itemizes deductions is

A. $950.
B. Zero.
C. $300.
D. $5,700.

20. To claim exemption from withholding, an employee must enter "Exempt" in the space provided on Form W-4, line 7. An exemption from withholding is good for only one year. To continue the exemption, an employee must file a new Form W-4 by

A. February 15 of each year.
B. March 15 o each year.
C. April 15 of each year.
D. December 31 of each year.

21. The following is true regarding the tax on the investment income of certain children.

A. If a child's interest and dividend income (including capital gain distributions) total less than $15,900, the child's parent may be able to choose to include that income on the parent's tax return rather than file a tax return for the child.
B. If the child's interest, dividends, and other investment income total more than $1,900, part of that income may be taxed at the parent's tax rate instead of the child's tax rate.
C. If a child's parents are married to each other and file a joint return, use the child's return to figure the tax on the child's investment income and then transfer the figures to the parent's tax return.
D. All of the above.

22.You may be able to elect to include your child's interest and dividend income on your tax return. If you do, your child not have to file a tax return. The following is not one of the conditions that must be met in order to make the election.

A. Your child was under age 19 (or under age 24 if a full-time student) at the end of the year.
B. The child's gross income was more than $9,500.
C. The child is required to file a return unless your make this election.
D. No federal income tax was taken out of your child's income under the back up withholding rules.

23. You may be able to elect to include your child's interest and dividend income on your tax return. Make this election by attaching ______ to your Form 1040 or Form 1040NR for each child for whom you make the election.

A. Form 8814.
B. Form 2555.
C. Form 8615.
D. Form W-4.

24. If your child received qualified dividends or capital gain distributions, you may pay up to $95 more tax if you make this election instead of filing a separate tax return for the child. However, if you file a separate return or the child, the tax rate may be as low as zero percent because

A. The tax rate on the child's income is 10% if you make this election.
B. Preferential tax rates for qualified dividends and capital gain distributions.
C. Of itemized deductions such as child's investment expenses.
D. You may increase certain deductions or credits on your tax return.

25. By making the Form 8814 election, you cannot take

A. The additional standard deduction for a blind child.
B. The deduction for a penalty on an early withdrawal of your child's savings.
C. Itemized deduction (such as your child's investment expenses or charitable contributions).
D. Any of the above.

26. If you use Form 8814, your child's investment income is

A. Considered his investment income.
B. Considered your investment income.
C. Not taxable to you.
D. Taxable to your child only.

27. If you use Form 8814, your increased adjusted gross income

A. May reduce certain deductions or credits on your tax return.
B. May increase certain deductions or credits on your tax return.
C. May disqualify you from certain deductions or credits on your tax return.
D. Any of the above.

28. Use Form 8814, Part II, to figure the tax on the $1,900 or your child's interest and dividends that you do not include in your income. This tax is added to the tax figured on your income. The additional tax is

A. 10% of your child's gross income minus $950.
B. $95.
C. The smaller of A or B above.
D. 20% of your child's gross income.

29. If a child's interest, dividends, and other investment income total more than $1,900,

A. All of that income will be taxed at the child's tax rate.
B. Part of that income may be taxed at the parent's tax rate instead of the child's tax rate.
C. Use Form 8814 to figure the child's tax.
D. None of the above.

30. A child may be subject to the Alternative minimum tax (AMT) if he or she has certain items given preferential treatment under the tax law.

True False