Monica and Thomas

1.       Monica and Thomas, ages 32 and 36, are married and file a joint return. In addition, they have three dependent children. Monica and Thomas have adjusted gross income (AGI) of $90,000 and itemized deductions of $22,000. What is their taxable income for 2014?
a. $48,250
b. $56,150
c. $68,000
d. $90,000

Calculation: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

2.       In 2014, Jonathan, age 15 had $1,000 of interest from a certificate of deposit and $2,000 from working as a waiter. Assume Jonathan is claimed by his parents as a dependent. What is Jonathan’s standard deduction?
a. $6,200
b. $2,350
c. $1,350
d. $0

Calculation:

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3.       What is Dy’s Taxable Income for 2014? Assume she is 34 years old and is single and has no dependents. Assume further that Dy’s AGI is $75,000 and that she made a charitable contribution of $500 (which would be her only itemized deduction).

 a. $64,850

b. $70,550

c. $74,500

d. $75,000

Calculation:

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4.       What is Amy’s taxable income for 2014? Assume she is single and claimed two dependent children, Sagi and Damian. Assume further that Amy’s AGI is $44,000 and that her itemized deductions are

$10,000.

a. $22,150

b. $26,100

c. $34,000

d. $44,000

         Calculation:

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5.       A few years ago, Miranda and Mary formed a partnership called "M&Ms." Which of the following is most likely TRUE regarding the U.S. income taxation of Miranda, Mary and M&Ms?
a. The M&Ms entity is NOT required to file an informational tax return.
b. The M&Ms entity is NOT required to pay federal income taxes
c. The M&Ms entity will most likely be taxed like a corporation
d. Mary and Miranda will NOT be required to pay taxes on their respective shares of M&Ms’ income until M&Ms distributes its earnings to them