Individual Taxpayer Data Flashcards
7 cards from real IRS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Individual Taxpayer Data flashcards as text
A taxpayer receives $1,200 in Social Security benefits and has no other income. What portion of these benefits is included in federal gross income?
Answer: $0
If a taxpayer's combined income is below the base threshold ($25,000 for single filers), none of their Social Security benefits are taxable.
A taxpayer forgives a $10,000 personal loan they made to a friend. The friend had no ability to repay. What is the tax treatment for the lender-taxpayer?
Answer: Deductible as a nonbusiness bad debt, treated as a short-term capital loss
A worthless nonbusiness bad debt is treated as a short-term capital loss, deductible in the year it becomes totally worthless.
A taxpayer's dependent child (age 16) earned $2,000 in wages and received $1,500 in unearned income in 2023. Under the kiddie tax rules, which income may be taxed at the parent's marginal rate?
Answer: Only the $1,500 in unearned income above the threshold
The kiddie tax applies to a dependent child's net unearned income above the threshold (~$2,500 for 2023); only the unearned portion exceeding the threshold is taxed at the parent's rate.
Which of the following expenses is deductible as a miscellaneous itemized deduction subject to the 2% AGI floor for 2023?
Answer: None of the above
The Tax Cuts and Jobs Act (2017) suspended miscellaneous itemized deductions subject to the 2% AGI floor through 2025, so none apply in 2023.
A taxpayer uses their car 60% for business and 40% for personal use. The car's actual expenses for the year total $10,000. What is the deductible business portion using the actual expense method?
Answer: $6,000
Under the actual expense method, the deductible portion is the business-use percentage (60%) multiplied by total expenses: 60% × $10,000 = $6,000.
A taxpayer receives employer-provided group-term life insurance coverage of $75,000. What amount of coverage is excludable from the employee's gross income?
Answer: Up to $50,000
Under IRC §79, the cost of the first $50,000 of employer-provided group-term life insurance is excluded from the employee's gross income; coverage above $50,000 creates imputed income.
A calendar-year taxpayer discovers an error on their 2020 federal return that resulted in overpayment of tax. What is the deadline to file an amended return and claim a refund?
Answer: April 15, 2024
The statute of limitations for a refund claim is generally 3 years from the original filing due date, which for a 2020 return (due April 15, 2021) would be April 15, 2024.