ACC 129 Ch 3 Review

What form is generally used to report interest income if it is paid by a financial institution?

• Form 1040

• Form 1099-INT

• Schedule B

• Schedule EE

Interest earned on bonds issued by any state, possession of the United States, or any political subdivision is considered:

• Taxable income

• Tax-exempt interest

• Dividend income

• Capital gains

For the tax year 2023, what is the taxable income threshold for married filing jointly below which qualified dividends are taxed at 0%?

• $89,250

• $64,625

• $553,850

• $276,900

In 2023, what is the tax rate on qualified dividends for taxable income above $492,300 for single taxpayers?

• 0%

• 15%

• 20%

• 25%

How much dividend income must a taxpayer receive before they are required to complete and file Schedule B?

• More than $1,000

• More than $1,500

• More than $2,000

• More than $2,500

If state or local taxes were deducted as an itemized deduction on Schedule A in the prior year, the taxpayer must report the refund as income.

• True

• False

Are federal and state unemployment compensation benefits taxable?

• Only federal unemployment compensation is taxable.

• Only state unemployment compensation is taxable.

• Both federal and state unemployment compensation benefits are taxable.

• Neither federal nor state unemployment compensation benefits are taxable.

What determines the taxability of Social Security benefits?

• The total amount of Social Security benefits received.

• The provisional income and filing status of the taxpayer.

• The age of the taxpayer.

• The number of years the taxpayer has received Social Security benefits.

How much of Social Security benefits is potentially taxable if provisional income exceeds certain thresholds?

• Up to 25% of Social Security benefits.

• Up to 50% of Social Security benefits.

• Up to 85% of Social Security benefits.

• 100% of Social Security benefits.

For a married filing jointly tax return, what is the lower limit of provisional income for Social Security benefits to be taxable?

• $25,000

• $32,000

• $34,000

• $44,000