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TEST YOUR INTRO TAX KNOWLEDGE

Accountants are lifelong students. The weekly quizzes are open
to everyone in the wonderful field of accounting, business
and the study of accounting. Good luck!

This week's quiz brought to you by:
Robert J. Walsh, Associate Professor of Accounting
University of Dallas
Irving, Texas



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1 - Arthur pays tax of $6,000 on taxable income of $30,000 while taxpayer Rob pays tax of $10,000 on $60,000. The tax is a:
Progressive tax
Proportional tax
Regressive tax
None of the above

2 - Which of the following steps, related to a tax bill, occurs first?
signature or veto by the President of the United States
consideration by the Senate Finance Committee
consideration by the House Ways and Means Committee
consideration by the Joint Conference Committee

3 - Which of the following individuals is most likely to be contacted by the IRS after filing their tax return?
Marvin has AGI of $40,000 from wages and uses the standard deduction
Marvella has a $145,000 net loss from her unincorporated business (a horse farm). She also received $150,000 salary as a CEO of a corporation.
Melvin fails to report $150 of dividends from a stock investment. His taxable income is $42,000 and he has no other unusually large itemized deductions or business expenses. A Form 1099 is reported to the IRS.
None of the above is likely to be selected

4 - BK filed her 2006 tax return on April 15, 2007. When is the last day the IRS could audit her return assuming no gross understatement of income or fraud?
April 15, 2010
April 15, 2013
The IRS can audit the return until her death
Cannot tell from the information provided

5 - Taxable income for an individual is defined as:
gross income reduced by itemized deductions
AGI plus personal and dependency exemptions
total income reduced by deductions for AGI
AGI reduced by deductions from AGI and personal and dependency exemptions

6 - A single taxpayer provided the following information for 2007:
  • Salary - $40,000
  • Interest on local government bonds - $4,000 (qualifies as a tax exclusion)
  • Allowable itemized deductions - $8,000


What is adjusted gross income?
$40,000
$44,000
$36,000
Cannot determine from the information provided

7 - All of the following items are deductions for adjusted gross income except:
alimony paid
unreimbursed employee business expenses
contributions to medical savings accounts
one-half of self-employment taxes paid

8 - Anita, who is divorced, maintains a home in which she and her 16 year old daughter live. Anita provides the majority of the support for her daughter and for a son, age 21, who is enrolled full-time at the university and lives in the dorm. The son also works in the campus bookstore and earns spending money of $3,600. How many personal and dependency exemptions may Anita claim?
1
2
3
4

9 - Tom and Britney were married on January 1, 2008 and were divorced on December 15, 2008. What is their filing status for 2008?
They file as single
They file as married joint or married separate
They file as single half the year and married the other half
They file as single for 16 days and married for 350 days

10 - Terri is age 21, single, and cannot be claimed as a dependent by another taxpayer. For 2007 she must file a federal income tax return if she had gross income of at least:
$400
$3,400
$5,350
none of the above

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