Question

Using 2017 tax law,indicate;The taxpayers correct and most favourable filling status.Their greatest number of personal and dependent exemptions allowed for 2017.Whether the taxpayer is eligible to claim and receive the earned income tax credit.

Remember each dependent must be qualifying child or qualifying relative,Numbers in parentheses indicate age.Unless otherwise stated,each prospective dependent is an unmarried US citizen who does not provide more than half their own support.In no case will more than one taxpayer attempt to claim the same qualifying child as a dependent.No one other than the persons listed lived in the home.Each taxpayer has only the income stated.The taxpayer is the first person named unless you determine that married filing joint is the correct filling status.

Jim(49)and Linda(50) are married.They have two children,Todd(20) and Traci(15),who both lived with their parents all year.Todd has a part-time job,and Traci is still in high school.Todd is not a student.Jim and linda provide more than 50% support for both children.Jims wages were $26500;Linda's wages were $16805;Todd's gross income was $5100;Traci's was$0.

1.What is the taxpayers correct and most favourable 2017 filing status?

a.Single

b.Married filling jointly

c.Married filing separately

d.Head of household

e.Qualifying widow(er)

2.What is his greatest number of personal and dependent exemptions allowed for 2017?

a.1

b.2

c.3

d.4

3.Is the taxpayer eligible to claim and receive the earned income tax credit?

a.Yes

b.No

Answer 1

1. According to the case, the taxpayers correct and most favorable 2017 filing status is Married filing jointly. This is because Jim (49) and Linda (50) are married and both are earning. They both have the dependents i.e. their children. As they are married and both are working hence single and head of the household cannot be correct option. Qualifying widow(er) can be answer when Linda husband is not live. Hence, the correct option is b.

2.The greatest number of personal and dependent exemptions allowed for 2017 is 2 in this case as they both have two children. According to the case, each dependent must be qualifying child or qualifying relative hence only two is the answer remaining all are incorrect options.

3.Yes, the taxpayer eligible to claim and receive the earned income tax credit.

This is because they have the dependent who are not much earning i.e. 50% or more.