Tax Consulting Income Tax Knowledge 2 — Questions and Answers
Question 1: For the 2025 tax year, what is the standard deduction for a single filer under age 65?
- $13,850
- $14,600
- $15,000 (Correct answer)
- $27,700
Correct answer: $15,000
The 2025 standard deduction for single filers is $15,000.
Question 2: Which form does an employer use to report an employee's annual wages and withheld taxes?
- Form 1099-NEC
- Form W-2 (Correct answer)
- Form W-4
- Form 1040
Correct answer: Form W-2
Form W-2 reports an employee's wages and the taxes withheld for the year.
Question 3: A taxpayer's filing status is determined as of what date?
- January 1 of the tax year
- The last day of the tax year (Correct answer)
- The filing deadline
- The first day they had income
Correct answer: The last day of the tax year
Marital and filing status is generally determined on the last day of the tax year, December 31.
Question 4: What is the maximum capital loss a taxpayer can deduct against ordinary income in a single year?
- $1,500
- $3,000 (Correct answer)
- $5,000
- Unlimited
Correct answer: $3,000
Net capital losses are deductible against ordinary income up to $3,000 per year, with the excess carried forward.
Question 5: Which of the following is generally NOT taxable income?
- Tips received
- Gifts received (Correct answer)
- Unemployment compensation
- Interest from a savings account
Correct answer: Gifts received
Gifts received are excluded from the recipient's gross income.
Question 6: What does AGI stand for on a federal tax return?
- Annual Gross Income
- Adjusted Gross Income (Correct answer)
- Aggregate Gross Income
- Average Gross Income
Correct answer: Adjusted Gross Income
AGI is Adjusted Gross Income, gross income minus specific above-the-line adjustments.
Question 7: A self-employed individual must pay self-employment tax to cover which programs?
- Social Security and Medicare (Correct answer)
- Federal income tax only
- Unemployment insurance
- State disability
Correct answer: Social Security and Medicare
Self-employment tax funds the Social Security and Medicare contributions normally split with an employer.
Tax Consulting Income Tax Knowledge 2
For the 2025 tax year, what is the standard deduction for a single filer under age 65?