1. The cost of which of the following expenses is not deductible as a medical expense on Schedule A, before the 10 percent of adjusted gross income limitation?
a. A psychiatrist
b. Birth control prescriptions
c. Acupuncture
d. Marriage counseling
2. The cost of which of the following is deductible as a medical expense?
a. Travel to a warm climate
b. Birth control pills
c. A disability insurance policy that pays $200 for each day the taxpayer is in the hospital
d. Liposuction to reduce waist size
3. Which of the following is not considered a deductible medical expense?
a. Dental work
b. Eyeglasses
c. Acupuncture
d. Diet foods
4. Which of the following taxes may be deducted as itemized deductions for 2014?
a. State gasoline taxes
b. Fishing license fee
c. Federal income taxes
d. Social Security taxes
e. Local income taxes
5. Wilma had $3,100 in state income taxes withheld from her paychecks during 2014. In April of 2014, Wilma paid the $300 due for her 2013 state tax return. Wilma’s total tax liability on her state tax return for 2014 is $2,850. How much should Wilma deduct as an itemized deduction for state income taxes on her 2014 federal income tax return?
a. $3,400
b. $3,150
c. $3,100
d. $2,850
e. None of the above
6. Which of the following taxes are not deductible as an itemized deduction?
a. Property tax on land held for investment
b. State income taxes
c. Auto registration fees based on the value of the auto
d. Federal income taxes
7. Ramon, a single taxpayer, has adjusted gross income for 2014 of $164,000 and his itemized deductions total $19,000. The itemized deductions consist of $11,000 in state income taxes and $8,000 of charitable contributions. What amount of itemized deductions will Ramon be allowed to deduct in 2014?
a. $40
b. $10,133
c. $5,450
d. $18,959
e. $19,000
8. Which of the following is deductible as interest on Schedule A?
a. Loan fees that are not “points”
b. Service charges
c. Investment interest expense, subject to the net investment income limitation
d. Interest on loans to finance tax exempt bonds
e. None of the above are deductible as interest
9. Carrie finished her undergraduate degree using money from a student loan. She earned $36,000 her first year and paid $2,600 in interest. She can take a deduction for student loan interest in the amount of:
a. $2,600
b. $2,500
c. $1,500
d. $0
e. None of the above
10. Which of the following interest expense amounts is not deductible in the current year?
a. Education loan interest of $2,000, assuming the taxpayer has income of $30,000.
b. Home equity loan interest of $6,000, on a loan of $90,000, the proceeds of which were used to purchase a sports car and designer clothes.
c. Investment interest expense of $10,000, assuming the taxpayer has no investment income.
d. Qualified residence interest of $70,000 on a $1 million loan used to purchase a luxury apartment in downtown San Diego.