Multiple Choice Questions

1. Walters, an individual, received the following in 2016:

W-2 income .........................................................................$10,000

Federal tax refund for 2015 ....................................................... 1,250

Scholarship stipend, in return for teaching assistant duties performed ...... 25,000

Cash inheritance from deceased great-uncle ..................................... 5,000

Considering only the above, what is Walters' 2016 gross income?

a. $35,000

b. $36,250

c. $15,000

d. $16,250

2. Smith, an individual, is required to pay Goode yearly alimony of $6,000 and yearly child support of $18,000. Smith paid Goode $20,000 in 2016. Smith's 2016 W-2 income was $50,000. Considering only the foregoing facts, what should Smith's adjusted gross income be for 2016?

a. $30,000

b. $45,000

c. $48,000

d. $50,000

3. Pierce, a married individual, received the following in 2016:

Worker's compensation award .........................................$25,000

W-2 income ............................................................... 20,000

Unemployment compensation ........................................... 4,800

Damages awarded for emotional distress

experienced as a result of workplace bodily injury ................... 10,000

Considering only the above, what is Pierce's 2016 gross income?

a. $49,800

b. $34,800

c. $30,000

d. $24,800

4. Kellye, a teacher, volunteers for eight hours per week at a school for high-risk children, a qualified charitable organization. Kellye's normal rate for teaching is $30 per hour. Kellye's out-of-pocket costs in 2016 were $250 for supplies, and she spent $20 each week in transportation getting to and from the school. Kellye made no cash contributions to charity in 2016. If Kellye volunteered every week in 2016, what is her charitable contribution deduction?

a. $0

b. $250

c. $1,290

d. $13,770

5. Aaron, age 55, has an adjusted gross income in 2016 of $30,000. His expenses are as follows:

Non-prescription medicine ....................................$ 100

Prescription medicine .......................................... 500

Doctor visits ..................................................... 500

Weekly meal preparation for a diet plan .....................2,000

Removal of a benign facial mole ............................. 400

Contact lenses ................................................... 500

Eyeglasses ........................................................ 200

Dental services ................................................... 300

6. What is Aaron's itemized deduction for medical expenses?

a. $0

b. $1,500

c. $2,000

d. $4,500

6. Which of the following deductions for taxes paid may be taken in the same year?

a. Real estate taxes, state income taxes, state sales taxes

b. Real estate taxes, property taxes, state income taxes

c. Property taxes, state income taxes, state sales taxes

d. Real estate taxes, property taxes, state income taxes, state sales taxes