Question

Markt Ashley is single and lives with Barney, her boyfriend, and Candy, his 8-year-old daughter Ashley paid all of the support for her household in 2018 Barney has earned income of $2.500 and had income tax withheld from his wages. He has no other income and is not required to file an income tax return. With one qualifying child. Bamey may claim an earned income credit Barney files an income tax return solely to obtain a refund of withheld income taxes and does not claim EIC. Because Barney does not have a fling requirement and fled only to obtain a refund or withheld income taxes, Candy is not considered the qualifying child of Bamey or any other taxpayer Based on the information provided, can Ashley claim Candy as a dependent? Choose one answer Ashley may not claim Candy as he qualifying relative even if the other requirements are met b. Ashley may claim Candy as her qualifying child provided all other requirements are met. c. Ashley may claim Candy as her qualifying relative provided all other requirements are met Ashley may not claim Candy as her qualifying child even if the other requirements are met O d An individual who provides services to your business, but is not an employee is considered to be Maks: 1 Choose one answer. O b A statutory employee An independent contractor c. Aleased employee A household employee O d

Answer 1

53. (C)

Explanation:-

The IRS requires four tests to be passed for a person to be classified as a qualifying relative.

1. The qualifying relative must not be a qualifying child of the taxpayer or of anyone else; no taxpayer can claim them on their tax return as a qualifying child.
2. The qualifying relative must either live in the taxpayer's household all year or be related to the taxpayer as a child, sibling, parent, grandparent, niece or nephew, aunt or uncle, certain in-law or certain step-relative. Someone who is not technically related to the taxpayer can become a qualifying relative by living with the taxpayer all year, and someone who is related to the taxpayer – but doesn’t live with them – can be a qualifying relative. A person who died during the year but lived with the taxpayer until death or who was born during the year and lived with the taxpayer for the rest of the year is considered a qualifying relative, even though that person didn’t live with the taxpayer for the full year.
3. The qualifying relative must have a gross income of less than $4,150 in 2018. This amount can increase every year.
4. The qualifying relative must have received more than half of their financial support for the year from the taxpayer.

54. (B) Independent Contractor

Explanation:-

A business may pay an independent contractor and an employee for the same or similar work, but there are important legal differences between the two. For the employee, the company withholds income tax, Social Security, and Medicare from wages paid. For the independent contractor, the company does not withhold taxes. Employment and labor laws also do not apply to independent contractors.