1. Look at the Form 1040 you prepared for Rodolfo and Anna Ramirez. What is the amount on Form 1040, Line 38?

a. $ 32,143.
b. $ 19,059.
c. $ 13,084. 
d. $ 1,233.

2. Look at the Form 1040 you prepared. What is the amount on Form 1040, Line 40?

a. $ 32,143.
b. $ 19,059.
c. $ 13,084. 
d. $ 1,233.

3. Look at the Form 1040 you prepared. What is the amount on Form 1040, Line 74a?

a. $ 2,461.
b. $ 1,228.
c. $ 12,259. 
d. $ 1,233.

4. You may benefit from itemizing your deductions on Schedule A (Form 1040) if you had large uninsured casualty or theft losses.

True False

5. The standard deduction for most taxpayers who do not itemize their deductions on Schedule A of Form 1040 is higher is 2007 than it was in 2006.

True False

6. Some of your itemized deductions may be limited if your adjusted gross income is more than

a. $ 117,300.
b. $ 156,400.
c. $ 234,600. 
d. $ 195,500.

7. You must determine your filing status before you can determine your filing requirements,

a. and correct exemptions.
b. and health insurance deduction.
c. standard deduction and correct tax. 
d. and itemized deductions.

8.  Both you and your spouse must include all of your income, exemptions, and deductions on your return. In some cases, one spouse may be relieved of joint liability for tax, interest, and penalties on a joint return. The type of relief available is   

a. innocent spouse relief.
b. separation of liability or equitable relief.
c. relief from liability arising from community property law. 
d. all of the above.

9. Larry, 46, and Donna, 33, are filing a joint return for 2007. Neither is blind. They decide not to itemize their deductions. Their standard deduction  is

a. $ 5,350.
b. $ 7,850.
c. $ 10,700. 
d. $ 3,400.

 10. Stanley, 48, and Rosalind, 39, are filing a joint return for tax year 2007. Stanley is blind at the end of 2007. Their standard deduction is

a. $ 5,350.
b. $ 11,750.
c. $ 10,700. 
d. $ 7,850.

11. If you elect to deduct state and local general sales taxes, you must check box b on line 5 of Schedule A (Form 1040). To figure your deduction, you can use

a. your actual expenses.
b. the optional sales tax tables.
c. the percentages at the end of Schedule A. 
d. both A  or B are correct.

12.  The option to deduct state and local general sales taxes instead of the state and local income taxes was extended through 2009.

True False

13. If you checked the "yes" box and your local general sales tax rate changed during 2007, figure the rate to enter on line 3 by

a. adding all the rates that were in effect for the whole year.
b. multiplying the last tax rate that was in effect by a fraction.
c. multiplying each tax rate for the period it was in effect by a fraction. 
d. dividing each tax rate for the period it was in effect by the total number of days in the year (365 days).

14.  In you calculation of actual state and local general sales tax you include sales taxes paid on items used in your trade or business.

True False

15. Use Schedule A (Form 1040) to figure your itemized deductions. In most cases, your federal income tax will be less if you take the larger of your itemized deductions or your standard deductions

True False

16. If you itemize, you can deduct a part of your medical and dental expenses and un-reimbursed employee business expenses.

True False

17. Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions. A dollar amount that depends on your filing status, whether you are 65 or older or blind, and whether an exemption can be claimed for you by another taxpayer and reduces the amount of income on which you are taxed is

a. A standard deduction.
b. An itemized deduction.
c. A credit. 
d. A general deduction.

18. If you do not itemize deductions, you are entitled to a higher standard deduction if you are 65 or older at the end of the year. You are considered 65 on the day before your 65th birthday. Therefore, you can take a higher standard deduction for 2007 if you were born before

a. January 2, 1942.
b. January 2, 1943.
c. January 2, 1944.  
d. January 2, 1948.

19. The standard deduction for an individual for whom an exemption can be claimed on another person's tax return is generally limited to

a. At least $850.
b. The individual's earned income for the year plus $300 (but not more than the regular standard deduction amount).
c. $5,350.  
d. Both A or B are correct.

20. Marvin is married to Clara and for 2007, due to some marital problems, they will file married filing separate. Clara will itemize her deductions of $11,000 because she had qualifying car expenses. Marvin wants to use the standard deduction on his return, because his total itemized deductions amount is only $4,100 for 2007 and it is less than the standard deduction. Since Clara will itemize her deductions

a. Marvin has to use the standard deduction amount of $5,350.
b. Marvin also has to itemize his deductions using the $4,100 amount.
c. Marvin can use his $5,350 standard deduction amount.  
d. Marvin should not file a return.

21. Lucy will itemize her deductions for tax year 2007. She was single for all of 2007. Her adjusted gross income (Form 1040 line 38) was $150,000. Her total itemized deductions are $11,978 of which are for the following amounts from federal Schedule A: line 5 $668.00, line 6 $950, line 8 $500, and line 14 $9,860.  What are her total itemized deductions allowed for Federal? 

a. $11,978.
b. $11,313.
c. $11,856.
d. $10,943.  

22. You may be subject to a limit on some of your itemized deductions if your adjusted gross income (AGI) is more than

a. $100,000 ($50,000 if you are married filing separately). 
b. $80,000 ($40,000 if you are married filing separately).
c. $145,950 ($72,975 if you are married filing separately).
d. $156,400 ($78,200 if married filing separately).

23. What is the Federal standard deduction amount for a dependent who earned $4,000 from her job?

a. $4,300.
b. $850.
c. $4,000.
d. $5,350.

24. Joseph, a 22-year-old full-time college student, is claimed on his parents' 2007 tax return. Joseph has $6,000 of wage income. He has no itemized deductions. What is Joseph's standard deduction amount for 2007?

a. $5,350.
b. $4,000.
c. $6,000.
d. $850.

25. You should itemize deductions if your total deductions are more than the standard deduction amount. Another reason why you should itemize your deductions is if you don't qualify for the standard deduction. Your standard deduction is zero if

a. You are filing a tax return for a short tax year because of a change in your annual accounting period. 
b. You are a nonresident or dual-status alien during the year.
c. You are married, filing a separate return, and your spouse itemizes her deductions.
d. All of the above.

26. The amount of the standard deduction for a decedent's final tax return is the same as it would have been had the decedent continued to live. The higher standard deduction for age

a. Cannot be claimed if the decedent was not 65 or older at the time of death.
b. Can be claimed if the decedent was not 65 or older at the time of death.
c. Applies as long as the decedent turns 65 by the time the return is due. 
d. Can be claimed if the decedent was 65 by the end of the year in which decedent died.

27. You many want to elect to itemize for state tax or other purposes. You may want to do this, for example, if the tax benefit of being able to itemize your deductions on your state tax return is greater that the tax benefit you lose on your federal return by not taking the standard deduction. To make this election, you

a. can call the IRS and let them know of your intentions. 
b.  write a letter to the IRS.
c. must check the box on line 30 of Schedule A.
d. Just do the return like that, you don't have to let them know. 

28.  I you do not itemize your deductions and later find that you should have itemized, or if you itemize your deductions and later find you should not have, you

a. can call the IRS and let them know that you changed your mind. 
b. can change your return by filing Form 1040X.
c. must check the box on line 29 of Schedule A.
d. Just do another return, they will know that this return is a fix-up.

29. Bill and Terry are filing a joint return for 2007, Both are over 65. Neither is blind. If they do not itemize deductions, their standard deductions is

a. $10,700.
b. $12,800.
c. $12,300.
d. $7,300.

30. Toby, age 25, is a single man. He will itemize his deductions for tax year 2007. His adjusted gross income was $199,000 (Form 1040, line 38). He takes care of his nephew and provided all the support for him and meets all the tests to qualify for the head of household filing status. His total itemized deductions are $27,591 and they are the following amounts from federal Schedule A: line 5 $1,221.00, line 6 $950, line 8 $500, line 10 $10,000,line 13 $450, line 14 $10,450, line 19 $3,000, and line 26 $1,020.  What are his total itemize deductions allowed for federal? 

a. $27,591.
b. $26,739.
c. $17,141.
d. None of the above.

31. Look at the Form 540 you prepared for Rodolfo and Anna Ramirez. What is the amount on Form 540, Line 18?

a. $ 262.
b. $ 13,084.
c. $ 12,663. 
d. $ 32,143.

32. Look at the Form 540 you prepared for Rodolfo and Anna Ramirez. What is the amount on Form 540, Line 66?

a. $ 197.
b. $ -0-.
c. $ 205. 
d. $ 1,233.

33. For California, married or an RDP and filing separate returns, you and your spouse/RDP must either both itemize your deductions or both must take the standard deduction.

True False

34. For California, decide whether to itemize your charitable contributions, medical expenses, interest paid, taxes, etc., or take the standard deduction. Your California income tax will be less if you take

a. your California itemized deductions.
b. your California standard deduction.
c. the larger of A or B above.
d. none of the above.

35. Lucy will itemize her deductions for tax year 2007. She was single for all of 2007. Her total adjusted gross income was $150,000. Her total federal itemized deductions were $11,978 of which are the following amounts from federal Schedule A: line 5 $668.00, line 6 $950, line 8 500, and line 14 $9,860.  What are her total itemize deductions allowed for California? 

a. $11,978.
b. $11,310.
c. $9,860.
d. $-0-.  

36. Miriam and her husband decide itemize in tax year 2007. Their total deductible itemized deductions totaled to $8,500. Their Federal standard deduction for MFJ is $10,700 but their California standard deduction is only $7,032. For them it is a better benefit to claim the standard deduction for federal and

a. Due to the conflict, not do a return for California at all.
b. Also claim the standard deduction for California.
c. Itemize their deductions for California.
d. None of the above.  

37. Jeff, 27, is a single man who earned $24,000 in tax year 2007. His itemize deductions amounts are the following: $346 in General sales tax calculation (based on his living LA county), $200 deductible DMV motor vehicle tax. He had a total of $5,654 in medical expenses and after the limit he can deduct only $3,854 in medical expenses. A total of $4,400 in itemize deductions. Jeff decides that its best for him to itemize his deductions on his California return but not on federal. What should he do?

a. Complete a federal Schedule A to calculate the results to enter on his Schedule CA (540). 
b. Attach federal Schedule A to the back of his California return.
c. He can use the standard deduction and also itemize his deductions, but not both. 
d. Both A and B are correct.

38. If you did not itemize your deductions on your federal income tax return but will itemize your deductions for your California Form 540/540A, first complete a sample federal Schedule A.

True False

39. Toby, age 25, is a single man. He will itemize his deductions for tax year 2007. His total adjusted gross income was $199,000. He takes care of his nephew and provided all the support for him and meets all the tests to qualify for the head of household filing status. His total itemized deductions are $27,591. The following amounts are from federal Schedule A: line 5 $1,221.00, line 6 $950, line 8 $500, line 10 $10,000,line 13 $450, line 14 $10,450, line 19 $3,000, and line 26 $1,020.  What are his total itemize deductions allowed for California? 

a. $ 27,591.
b. $ 26,370.
c. $ 2,048.
d. $ 24,322.

40. What is the California Standard deduction amount for a dependent who earned $4,000 from her job. 

a. $ 4,300.
b. $ 850.
c. $ 4,000.
d. $ 3,516.