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2. Assume Henry can claim his mother, who doesn’t live with him, as a dependent.

ID: 2425052 • Letter: 2

Question

2. Assume Henry can claim his mother, who doesn’t live with him, as a dependent. Henry’s filing status is Head of Household with one dependent.

True

False

3.

Maria and her husband Jim both work. Maria works, earning $40,000 a year. Jim works earning $25,000 a year. Maria’s 18 year old daughter by a prior relationship moved in with the couple in August, 2015. The daughter had no income, having just graduated from high school in May, 2015. She had lived with and was supported by her grandparents before moving in with Jim and Maria. Which statement is true?

a Maria's daughter is the grandparents' dependent

b Maria's daughter is Jim and Maria's dependant.

c No one may claim the daughter

d None of the above

23 When working through a Form 1040, in what order are items addressed?

a Income, adjustments, deductions, non-refundable credits, otehr taxes, payments (including Earned Income Credit and Additional Child Tax Credit).

b Income, deductions, adjustments, payments (including Earned Income Credit and the Additional Child Tax Credit), other taxes, non-refundable credits

c Deductions, income, payments (including Earned Income Credit and the Additional Child Tax Credit), non-refundable credits, other taxes, adjustments

d Income, adjustments, deductions, payments (including Earned Income Credit and the Additional Child Tax Credit), non-refundable credits, other taxes

24 Which of the following are examples of non-taxable income?

a Workman's compensation

b Dividends

c Unemployment compensation

d Supplemental security income

e A and C only

f A and D only

a Workman's compensation

b Dividends

c Unemployment compensation

Explanation / Answer

Ans 2) TRUE (We assume he qualifies the remaining 2 conditions from the available information and assumption i.e. He is unmarried on the last day of tax year; he paid more than half the cost of 'keeping up a home')

Ans 24) Answer is 'f' A and D (Workmans compensation are normally not taxable with the lone exception when an individual also receives benefits through Social security disacbility insurance SSDI and Supplemental Security Income SSI.