CPA Regulation (REG) : Selecting a Filing Status

Study concepts, example questions & explanations for CPA Regulation (REG)

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Example Questions

Example Question #1 : Selecting A Filing Status

In which of the following scenarios would the head of household filing status be available to the taxpayer?

Possible Answers:

A single taxpayer maintains a household that is the principal home for five months of the year for his disabled child.

A taxpayer with no dependents is the surviving spouse of an individual who died in the current year.

An unmarried taxpayer maintains a household with a 28-year-old son, who earned $10,000 during the tax year.

A single taxpayer maintains a separate home for his parent, who qualifies as a dependent.

Correct answer:

A single taxpayer maintains a separate home for his parent, who qualifies as a dependent.

Explanation:

Head of household is available to unmarried or legally separated taxpayers who maintain the principle residence of a qualifying dependent for at least half the year. The taxpayer’s parent does not have to live with the taxpayer, but the taxpayer must maintain the home of the parent. Individuals who do not qualify as children are subject to a gross income limitation of $4,300 to be considered a dependent. 

Example Question #2 : Selecting A Filing Status

Which of the following is (are) among the requirements to enable a taxpayer to be classified as a “qualifying widow(er)”?

 I.  A dependent has lived with the taxpayer for six months.
II. The taxpayer has maintained the cost of the principal residence for six months.

Possible Answers:

I only.

Neither I or II.

II only.

Both I and II.

Correct answer:

Neither I or II.

Explanation:

Requirements to file as a qualifying widow(er) are that the suriving spouse must pay over half the cost of maintaining a household where a dependent child lives for the whole taxable year. 

Example Question #3 : Selecting A Filing Status

Mike and Maggie met at a New Year’s Eve party held December 31, Year 12. They instantly bonded, fell madly in love, and were married at 11:49pm that night. Identify Maggie’s filing status for Year 12.

Possible Answers:

Married filing jointly

Single

Head of household

Surviving spouse

Correct answer:

Married filing jointly

Explanation:

For tax purposes, the taxpayer’s status as either single or married (if filing jointly) for a tax year is dependent upon the taxpayer’s status as of the end of the tax year. Since Maggie was married by the end of the tax year, the only applicable status from the options above is “married filing jointly.” 

Example Question #4 : Selecting A Filing Status

Jacob and Sarah are in the process of obtaining a divorce. While not legally separated yet, Jacob has moved out of the house by October of the current year. The couple’s children lived with Sarah in the family home for more than half of the tax year. What filing status can Sarah use to file her current year tax return?

Possible Answers:

Head of household

Surviving spouse

Married filing jointly/separately

Single

Correct answer:

Married filing jointly/separately

Explanation:

The two taxpayers are still married at year-end and can file as either joint or separate.

Example Question #5 : Selecting A Filing Status

Taylor, whose spouse had died during the prior year has not remarried. Taylor maintains a home for the dependent child. What is Taylor’s most advantageous filing status?

Possible Answers:

Married filing separately

Single

Qualifying widower with dependent child

Head of household

Correct answer:

Qualifying widower with dependent child

Explanation:

A qualifying widower is a taxpayer who may use the joint tax return standard deduction and rates for each of two taxable year following the death of a spouse unless he or she remarries.

Example Question #6 : Selecting A Filing Status

Can two taxpayers who were married but lived apart during the year file as married filing jointly?

Possible Answers:

Only if they have dependent children

Only if they live within the same state

No

Yes

Correct answer:

Yes

Explanation:

The criteria for married filing jointly is simply marriage. Distance, children, or any other factor do not play a role. If the couple was legally separated, they would not be able to file married filing jointly either.

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