Which of the Following Statements Relating to the Standard Deduction

question 88

Multiple Choice

Which of the following statements relating to the standard deduction, if any, is correct?

• A)If a taxpayer dies during the year, his or her standard deduction must be prorated.
• B)If a taxpayer is claimed as a dependent of another, his or her additional standard deduction is allowed in full (i.e., no adjustment is necessary).
• C)If spouses file separate returns, both must claim the standard deduction (rather than itemize their deductions from AGI).
• D)If a taxpayer is claimed as a dependent of another, no basic standard deduction is allowed.
• E)None of these.

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the taxpayer's total income, representing the percentage of income paid in taxes.

Marginal Tax Rate

The tax rate applied to the last dollar of income, representing the percentage of tax paid on any additional dollar of income.

Taxable Income

The portion of an individual's or entity's income used to calculate how much tax they owe to the government, after deductions and exemptions.

Regressive

Relating to a tax system in which the tax rate decreases as the taxable amount increases, often considered less fair to lower-income individuals.