Multiple Choice Questions
1. Which amount represents the standard deduction for a taxpayer who is 43 years old and claiming head of household status?
a. $8,700.
b. $9,100.
c. $8,950.
d. $6,200.
2. A married couple, both of whom are under 65 years old, decided to file as married filing separately. One of the spouses is going to itemize deductions instead of taking the standard deduction. What is the standard deduction permitted to the other spouse when she files her tax return?
a. $12,400.
b. $9,100.
c. $6,200.
d. $0.
3. Employers are required to withhold social security taxes from wages paid to employees. What is the amount of the social security wage limitation for 2014?
a. $117,000.
b. $110,100.
c. $113,700.
d. $106,800.
4. What is the amount of the tax liability for a married couple with taxable income of $135,500?
a. $33,875.
b. $25,588.
c. $20,325.
d. $19,418.
5. What is the percentage of interest the IRS was charging on assessment (amount of unpaid tax liability) during March 2014? You might want to do this research by going to the IRS Web site (www.irs.gov).
a. 6%.
b. 5%.
c. 3%.
d. 4%.
6. When there is negligence on a return, the IRS charges a penalty of ________of the tax due.
a. 25%.
b. 20%.
c. 18%.
d. 10%.
7. When there is fraud on a return, the IRS charges a penalty of ________ on any portion of understatement of tax that is attributable to the fraud.
a. 20%.
b. 25%.
c. 75%.
d. 100%.