Tax Returns Answers

Who should fill out the W-2 form?a.the taxpayer’s employerb.the taxpayerc.a qualified tax professionald.the IRS

What is the difference between a tax credit and a tax deduction?a.A tax credit represents money owed to you, while a tax deduction represents money you owe.b.A tax credit reduces the amount of money you must pay, while a tax deduction reduces your taxable income.c.A tax credit is owed money that collects interest, while a tax deduction is money that you do not have to pay.d.A tax credit occurs if you underpaid during the year, and a tax deduction occurs if you overpaid.

You have a gross income of $117,151 and are filing your tax return singly. You claim one exemption and can take a deduction of $2,713 for interest on your mortgage, an adjustment of $2,791 for business losses, an adjustment of $1,346 for alimony, a deduction of $2,086 for property taxes, a deduction of $2,376 for contributions to charity, and an adjustment of $1,091 for contributions to your retirement fund. The standard deduction for a single filer is $5,700, and exemptions are each worth $3,650. What is the difference between your adjusted gross income and your taxable income?a.$16,053b.$9,350c.$10,825d.$14,475

Brian is calculating his tax deductions. He finds that he can deduct $1,225 as a result of money given to charity, $4,391 from interest paid on his mortgage, and $2,821 from what he paid in state and local taxes. What is Brian’s total deduction?a.$8,437b.$8,383c.$6,414d.$5,700

Tax returns filed manually have a 20% chance of containing errors, while tax returns filed electronically have a 0.05% chance of containing the same. If 2.7 million tax returns are filed each way, how many more erroneous manually filed returns will there be than erroneous electronically filed returns?a.270,675b.538,650c.541,350d.269,325

Mr. and Mrs. Nedage are filing a joint tax return. While listing their deductions, they find that they can deduct $2,150 from medical bills, $826 from state taxes, $3,133 from charitable donations, and $1,331 from interest on their mortgage. The standard deduction for married couples filing jointly is $8,350. How does the standard deduction compare to the Nedages’ deductions?a.The Nedages’ deductions are $1,740 better than the standard deduction.b.The Nedages’ deductions are $7,440 better than the standard deduction.c.The standard deduction is $910 better than the Nedages’ deductions.d.The standard deduction is $9,260 better than the Nedages’ deductions.

Bianca and Dave are a married couple filing a joint tax return. They have a combined gross income of $81,031 and claim four exemptions. They can make an adjustment of $2,914 for business expenses, an adjustment of $1,939 for business losses, a deduction of $4,140 for medical expenses, an adjustment of $4,825 for contributions to their retirement fund, and a deduction of $2,420 for charitable donations. If exemptions are worth $3,650 apiece and the standard deduction for a joint return is $8,350, what is their total taxable income?a.$50,193b.$41,843c.$48,403d.$52,793

Bianca and Dave are a married couple filing a joint tax return. They have a combined gross income of $81,031 and claim four exemptions. They can make an adjustment of $2,914 for business expenses, an adjustment of $1,939 for business losses, a deduction of $4,140 for medical expenses, an adjustment of $4,825 for contributions to their retirement fund, and a deduction of $2,420 for charitable donations. If exemptions are worth $3,650 apiece and the standard deduction for a joint return is $8,350, what is their total taxable income?a.$50,193b.$41,843c.$48,403d.$52,793

What is the difference between a tax credit and a tax deduction?a.A tax credit represents money owed to you, while a tax deduction represents money you owe.b.A tax credit reduces the amount of money you must pay, while a tax deduction reduces your taxable income.c.A tax credit is owed money that collects interest, while a tax deduction is money that you do not have to pay.d.A tax credit occurs if you underpaid during the year, and a tax deduction occurs if you overpaid.

Which of these can be listed as benefits of filing your tax return online?I. Allows you to claim a larger number of deductionsII. Allows for faster receipt of any refunds dueIII. Allows for greater accuracy when filinga.I and IIb.III onlyc.II and IIId.I, II, and III