Question 1

A person who qualifies for the foreign earned income exclusion can exclude $16,624 of paid housing costs from income.

Accepted Answer

A) True 
 B)False

Question 2

What factors are used to determine if a person performing a task is self-employed or is an employee?

Accepted Answer

Although there is a 20-factor test in Re

Question 3

Carl, age 44, wants to contribute the maximum allowed to a Roth IRA. He is single and his AGI is $124,000. How much can he contribute to the Roth IRA?

Accepted Answer

A)  $5,500 
B)  $4,033 
C)  $2,000 
D)  $1,467 AGI Phase-Out Ranges for 2018 IRAs
  
A)  $5,500 
B)  $4,033 
C)  $2,000 
D)  $1,467 AGI Phase-Out Ranges for 2018 IRAs

Question 4

Kaylee is a member of the U.S. Armed Forces on active duty who moved because of a permanent change in station. She incurred the following moving expenses:   Kaylee's employer reimburses her $3,300 for the above expenses. Assuming that Kaylee meets all other requirements, how much income does Kaylee have as a result of this reimbursement of her moving expenses?

Accepted Answer

A)  0 
B)  $900 
C)  $1,100 
D)  $2,000 
A)  0 
B)  $900 
C)  $1,100 
D)  $2,000

Question 5

Jan has a company car for both business and personal use. Which of the following statements is correct regarding the use of the car?

Accepted Answer

A)  The company can never deduct full depreciation on the car because Jan uses it for personal trips. 
B)  The company only has to charge Jan 30 cents per mile for any of her personal mileage. 
C)  If the car cost less than $15,000, the company does not have to charge Jan anything for her personal use. 
D)  If Jan lives in a high-crime area and only uses the car for commuting to work, she has income equal to $1.50 per one-way trip. 
A)  The company can never deduct full depreciation on the car because Jan uses it for personal trips. 
B)  The company only has to charge Jan 30 cents per mile for any of her personal mileage. 
C)  If the car cost less than $15,000, the company does not have to charge Jan anything for her personal use. 
D)  If Jan lives in a high-crime area and only uses the car for commuting to work, she has income equal to $1.50 per one-way trip.

Question 6

All of the following are retirement plans that can be offered by a corporation except:

Accepted Answer

A)  401(k) 
B)  Keogh Plan 
C)  A SEP 
D)  Defined contribution plan 
A)  401(k) 
B)  Keogh Plan 
C)  A SEP 
D)  Defined contribution plan

Question 7

All of the following expenditures qualify for reimbursement under an educational reimbursement plan except:

Accepted Answer

A)  Tuition 
B)  Private tutoring 
C)  Fees 
D)  Books 
A)  Tuition 
B)  Private tutoring 
C)  Fees 
D)  Books

Question 8

George drives 10,000 personal miles on his company-owned car that cost $20,000. The standard mileage rate is 54.5¢ per mile for 2018 and the lease value of a car that cost $20,000 is $5,600. Under the cents-per-mile method, how is included in George's taxable compensation for 2018 for his personal use of the car?

Accepted Answer

Using the standard mileage rat

Question 9

The contribution limit for a defined contribution plan for 2018 is:

Accepted Answer

A)  $5,500 
B)  $18,500 
C)  $55,000 
D)  $220,000 
A)  $5,500 
B)  $18,500 
C)  $55,000 
D)  $220,000

Question 10

All employee fringe benefits are tax free

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not a purpose of a per diem allowance?

Accepted Answer

A)  Eliminate the substantiation requirement for business expenses. 
B)  Reduce the amount an employer must reimburse for employee business expenses. 
C)  Eliminate paper work for certain employee business expenses. 
D)  Reduce reimbursement disagreements between employer and employee. 
A)  Eliminate the substantiation requirement for business expenses. 
B)  Reduce the amount an employer must reimburse for employee business expenses. 
C)  Eliminate paper work for certain employee business expenses. 
D)  Reduce reimbursement disagreements between employer and employee.

Question 12

Which of the following is a reason a person would prefer to be an independent contractor?

Accepted Answer

A)  An independent contractor pays only 7.65 percent FICA tax. 
B)  An independent contractor can deduct expenses directly from business income. 
C)  An independent contractor can deduct his or her health insurance directly from business income. 
D)  An independent contractor can always participate in the retirement plan of the business for which he or she is performing work. 
A)  An independent contractor pays only 7.65 percent FICA tax. 
B)  An independent contractor can deduct expenses directly from business income. 
C)  An independent contractor can deduct his or her health insurance directly from business income. 
D)  An independent contractor can always participate in the retirement plan of the business for which he or she is performing work.

Question 13

A sole proprietor never has to pay employment taxes on income earned by any of his or her children who work for the business.

Accepted Answer

A) True 
 B)False

Question 14

An independent contractor pays self-employment taxes instead of FICA taxes.

Accepted Answer

A) True 
 B)False

Question 15

ABC Corporation awarded John 1,000 options in 2014; each option allows him to purchase one share of ABC Corporation stock for $20. The ABC stock is selling for $18 per share at the grant date. In 2016, John exercises the options when the stock's selling price was $40 per share. In 2018, John sells the stock for $50 per share. What is ABC Corporation's deduction if they are incentive stock options?

Accepted Answer

A)  $0 
B)  $18,000 
C)  $20,000 
D)  $40,000 
A)  $0 
B)  $18,000 
C)  $20,000 
D)  $40,000

Question 16

An employee who receives a nonqualified stock option recognizes income when the option is received and when it is exercised regardless of the strike price.

Accepted Answer

A) True 
 B)False

Question 17

Tom, a calendar-year taxpayer, worked in Japan from July 1, 2017 through June 30, 2018. He earned $80,000 in 2017 and $90,000 in 2018 while in Japan. The maximum foreign earned income exclusion amount is $102,100 for 2017 and $103,900 for 2018. Which of the following statements is true?

Accepted Answer

A)  None of the income can be excluded in 2017 or 2018. 
B)  $51,950 can be excluded in both 2017 and in 2018. 
C)  No exclusion in 2017 but $90,000 can be excluded in 2018. 
D)  $51,950 can be excluded in 2018. 
A)  None of the income can be excluded in 2017 or 2018. 
B)  $51,950 can be excluded in both 2017 and in 2018. 
C)  No exclusion in 2017 but $90,000 can be excluded in 2018. 
D)  $51,950 can be excluded in 2018.

Question 18

Briefly contrast the FICA tax on an employee with the self-employment tax paid by an independent contractor.

Accepted Answer

An employee pays 6.2 percent [through wi

Question 19

Briefly explain the tax differences between a nonqualified stock option and an incentive stock option.

Accepted Answer

The recipient of a nonqualified stock op

Question 20

Which of the following fringe benefit does not impose a limit on the amount eligible as a tax-free benefit?

Accepted Answer

A)  A child and dependent care program 
B)  Group term life insurance premiums 
C)  Education assistance plan 
D)  Excess capacity services, 
E) g. unsold airplane seats 
A)  A child and dependent care program 
B)  Group term life insurance premiums 
C)  Education assistance plan 
D)  Excess capacity services, 
E) g. unsold airplane seats

A person who qualifies for the foreign earned income exclusion can exclude $16,624 of paid housing costs from income.

What factors are used to determine if a person performing a task is self-employed or is an employee?

Carl, age 44, wants to contribute the maximum allowed to a Roth IRA. He is single and his AGI is $124,000. How much can he contribute to the Roth IRA?

Jan has a company car for both business and personal use. Which of the following statements is correct regarding the use of the car?

All of the following are retirement plans that can be offered by a corporation except:

All of the following expenditures qualify for reimbursement under an educational reimbursement plan except:

The contribution limit for a defined contribution plan for 2018 is:

All employee fringe benefits are tax free

Which of the following is not a purpose of a per diem allowance?

Which of the following is a reason a person would prefer to be an independent contractor?

A sole proprietor never has to pay employment taxes on income earned by any of his or her children who work for the business.

An independent contractor pays self-employment taxes instead of FICA taxes.

An employee who receives a nonqualified stock option recognizes income when the option is received and when it is exercised regardless of the strike price.

Tom, a calendar-year taxpayer, worked in Japan from July 1, 2017 through June 30, 2018. He earned $80,000 in 2017 and $90,000 in 2018 while in Japan. The maximum foreign earned income exclusion amount is $102,100 for 2017 and $103,900 for 2018. Which of the following statements is true?

Briefly contrast the FICA tax on an employee with the self-employment tax paid by an independent contractor.

Briefly explain the tax differences between a nonqualified stock option and an incentive stock option.

Which of the following fringe benefit does not impose a limit on the amount eligible as a tax-free benefit?

Introduction to Taxation

The Tax Practice Environment

Determining Gross Income

Deductions for Individuals and Tax Determination

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Estates, Gifts, and Trusts

Filters

Exam 4: Employee Compensation

A person who qualifies for the foreign earned income exclusion can exclude $16,624 of paid housing costs from income.

What factors are used to determine if a person performing a task is self-employed or is an employee?

Carl, age 44, wants to contribute the maximum allowed to a Roth IRA. He is single and his AGI is $124,000. How much can he contribute to the Roth IRA?

Jan has a company car for both business and personal use. Which of the following statements is correct regarding the use of the car?

All of the following are retirement plans that can be offered by a corporation except:

All of the following expenditures qualify for reimbursement under an educational reimbursement plan except:

The contribution limit for a defined contribution plan for 2018 is:

All employee fringe benefits are tax free

Which of the following is not a purpose of a per diem allowance?

Which of the following is a reason a person would prefer to be an independent contractor?

A sole proprietor never has to pay employment taxes on income earned by any of his or her children who work for the business.

An independent contractor pays self-employment taxes instead of FICA taxes.

An employee who receives a nonqualified stock option recognizes income when the option is received and when it is exercised regardless of the strike price.

Tom, a calendar-year taxpayer, worked in Japan from July 1, 2017 through June 30, 2018. He earned $80,000 in 2017 and $90,000 in 2018 while in Japan. The maximum foreign earned income exclusion amount is $102,100 for 2017 and $103,900 for 2018. Which of the following statements is true?

Briefly contrast the FICA tax on an employee with the self-employment tax paid by an independent contractor.

Briefly explain the tax differences between a nonqualified stock option and an incentive stock option.

Which of the following fringe benefit does not impose a limit on the amount eligible as a tax-free benefit?

Introduction to Taxation

The Tax Practice Environment

Determining Gross Income

Deductions for Individuals and Tax Determination

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Estates, Gifts, and Trusts

Filters