Tom and Betsy, Who Are Married Filing Jointly, Reported a Standard

question 74

Multiple Choice

Tom and Betsy, who are married filing jointly, reported a standard deduction of $12,400 on their 2014 tax return. They paid $500 to the state for income taxes in 2014. In 2015, they received a $125 refund of state taxes paid in 2014. What is the amount that Tom and Betsy need to report on their 2015 tax return?

• A) $0.
• B) $125.
• C) $375.
• D)$500.

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Definitions:

Liabilities

Financial obligations or debts owed by a person, company, or entity to others, requiring the outflow of resources to settle.

Total Rate of Return

A profitability measure that accounts for the gains or losses from investments over a specific period, including interest, dividends, and capital gain.

Current Yield

The annual income (interest or dividends) divided by the current price of the security.

Yield to Maturity

The total return anticipated on a bond if the bond is held until the end of its lifetime.