Question 1

If there is not enough gross tax liability to use the foreign tax credit, ________.

Accepted Answer

A) it expires unused 
B) it is carried back two years or forward 20 years 
C) it is carried back three years or forward five years 
D) it is carried back one year or forward 10 years 
A) it expires unused 
B) it is carried back two years or forward 20 years 
C) it is carried back three years or forward five years 
D) it is carried back one year or forward 10 years

Question 2

Depending on the year, the original (unextended)due date for an individual's tax return may be after April 15.

Accepted Answer

A) True 
 B)False

Question 3

Hera wants to reduce her income tax liability by shifting some of her income to her 10-year-old daughter (a dependent), Athena.Last year, Hera gifted corporate bonds to Athena.This year, Athena received $1,550 in interest income from the bonds.What amount of tax will Athena pay on the interest income?

Accepted Answer

$45.
The kiddie tax only potentially app

Question 4

Which of the following suggests that a working taxpayer is an independent contractor rather than an employee?

Accepted Answer

A) Works for more than one firm 
B) May realize a loss from business activities 
C) Sets own working hours 
D) Works somewhere other than on employer premises 
E) All of these suggest independent contractor status 
A) Works for more than one firm 
B) May realize a loss from business activities 
C) Sets own working hours 
D) Works somewhere other than on employer premises 
E) All of these suggest independent contractor status

Question 5

Trudy is Jocelyn's friend.Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work.During the year, Jocelyn paid Trudy $4,000 to care for her son.What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $30,000? (Exhibit 8-9)

Accepted Answer

A) $0 
B) $810 
C) $1,080 
D) $3,000 
A) $0 
B) $810 
C) $1,080 
D) $3,000

Question 6

During 2019, Jasmine (age 12)received $6,500 from a corporate bond.She also received $600 from a savings account established for her by her parents.Jasmine lives with her parents and she is their dependent.What is Jasmine's gross tax liability? (Use the Estates and trusts and Tax rate schedules.)

Accepted Answer

A) $0 
B) $110 
C) $812 
D) $922 
A) $0 
B) $110 
C) $812 
D) $922

Question 7

All else equal, a reduction in regular income tax rates would require more taxpayers to pay the alternative minimum tax.

Accepted Answer

A) True 
 B)False

Question 8

Hester (age 17)is claimed as a dependent by his parents, Charlton and Abigail.In 2019, Hester received $10,000 of qualified dividends, and he received $12,000 from a part-time job.What is his taxable income for 2019?

Accepted Answer

A) $22,000 
B) $20,900 
C) $9,800 
D) $9,650 
A) $22,000 
B) $20,900 
C) $9,800 
D) $9,650

Question 9

An individual could pay 100 percent of her tax liability by the due date of her tax return and still be subject to underpayment tax penalties.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Accepted Answer

A) An extension of time to file the tax return protects a taxpayer from late payment penalties as long as the tax is paid by the extended due date of the return. 
B) The penalty rate for late filing penalties is less than the penalty rate for late payment penalties. 
C) If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return, the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself. 
D) None of the choices are correct. 
A) An extension of time to file the tax return protects a taxpayer from late payment penalties as long as the tax is paid by the extended due date of the return. 
B) The penalty rate for late filing penalties is less than the penalty rate for late payment penalties. 
C) If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return, the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself. 
D) None of the choices are correct.

Question 11

Which of the following statements regarding credits is correct?

Accepted Answer

A) Business expenses are generally refundable credits. 
B) Business credits that are generated in one year but are not utilized in that year expire. 
C) Business credits that are generated in one year but are not utilized in that year may be carried forward to future years but not back to a prior year. 
D) Business credits that are generated in one year but are not utilized in that year may be carried back to the previous year and then forward to future years. 
A) Business expenses are generally refundable credits. 
B) Business credits that are generated in one year but are not utilized in that year expire. 
C) Business credits that are generated in one year but are not utilized in that year may be carried forward to future years but not back to a prior year. 
D) Business credits that are generated in one year but are not utilized in that year may be carried back to the previous year and then forward to future years.

Question 12

The tax rate schedules are set up to tax lower levels of income at higher tax rates than higher levels of income.

Accepted Answer

A) True 
 B)False

Question 13

Employees are not allowed to deduct FICA taxes they pay.

Accepted Answer

A) True 
 B)False

Question 14

Miley, a single taxpayer, plans on reporting $30,475 of taxable income this year (all of her income is from a part-time job).She is considering applying for a second part-time job that would give her an additional $10,000 of taxable income.By how much will the income from the second job increase her tax liability? (Use the Tax rate schedules.)

Accepted Answer

A) $1,000 
B) $1,200 
C) $1,300 
D) $2,400 
A) $1,000 
B) $1,200 
C) $1,300 
D) $2,400

Question 15

The earned income credit is sometimes referred to as a negative income tax.

Accepted Answer

A) True 
 B)False

Question 16

During all of 2019, Mr.and Mrs.Clay lived with their four children (all are under the age of 17).They provided over one-half of the support for each child.Mr.and Mrs.Clay file jointly for 2019.Neither is blind, and both are under age 65.They reported the following tax-related information for the year.(Use the tax rate schedules)
 $\begin{array}{llcc}
  \text {Salary income  } &\$125,000  \
 \text {Prize from local radio station  } &1,500\
 \text {Medical expenses (no health insurance)  } &4,000\
 \text {Real estate taxes  } &4,200\
 \text { Alimony paid by Mr. Clay (divorced in 2015) } &12,000\
 \text {State income taxes withheld in 2019  } &1,800\
  \text { State income taxes paid with 2019 tax return (return was filed in April  } &  \
 \text { 2020) } &1,500\
 \text {Federal incometax withholding  } &7,500\
 \text {Qualified home mortgage interest (acquisition debt of  \$ 300,000)   } &15,000\
 \text { Charitable contributions } &4,000\
\end{array}$
 1.What are the Clays' taxes payable or refund due? (Ignore the alternative minimum tax.)
2.What are the Clays' tentative minimum tax and alternative minimum tax?

Accepted Answer

A.Tax refund is $4,093.
Answer

Question 17

In 2019, John (52 years old)files as a head of household with one 18-year old dependent (qualifying)child.John is eligible to claim a $700 American opportunity credit for the year.John did not have any taxes withheld by his employer during the year and he did not make any estimated tax payments.After taking credits into account, what is the amount of John's taxes payable or refund, assuming that his AGI is $26,000 (all from salary)and his taxable income is $8,000?

Accepted Answer

Refund of $2,412.
Answer compu

Question 18

Maria and Tony are married.They are preparing to file their 2019 tax return.If they were to file as single taxpayers, Maria and Tony would report $40,000 and $60,000 of taxable income, respectively.On their joint tax return, their taxable income is $100,000.How much of a marriage penalty or benefit will Maria and Tony experience in 2019? (Use Tax rate schedules.)

Accepted Answer

No marriage penalty or benefit.
Answer c

Question 19

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Accepted Answer

A) Taxpayers who have paid their full tax liability by the original tax return due date are protected from underpayment penalties. 
B) Taxpayers who have paid their full tax liability by the extended tax return due date are protected from underpayment penalties. 
C) Taxpayers who have uneven income streams can pay estimated tax quarterly in uneven amounts and not be susceptible to underpayment penalties. 
D) Taxpayers who have paid their required amount of estimated tax, even though not on time, are protected from underpayment penalties. 
A) Taxpayers who have paid their full tax liability by the original tax return due date are protected from underpayment penalties. 
B) Taxpayers who have paid their full tax liability by the extended tax return due date are protected from underpayment penalties. 
C) Taxpayers who have uneven income streams can pay estimated tax quarterly in uneven amounts and not be susceptible to underpayment penalties. 
D) Taxpayers who have paid their required amount of estimated tax, even though not on time, are protected from underpayment penalties.

Question 20

If a married couple has one primary breadwinner, filing a joint return will likely result in a marriage penalty.

Accepted Answer

A) True 
 B)False

If there is not enough gross tax liability to use the foreign tax credit, ________.

Depending on the year, the original (unextended)due date for an individual's tax return may be after April 15.

Which of the following suggests that a working taxpayer is an independent contractor rather than an employee?

Trudy is Jocelyn's friend.Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work.During the year, Jocelyn paid Trudy $4,000 to care for her son.What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $30,000? (Exhibit 8-9)

During 2019, Jasmine (age 12)received $6,500 from a corporate bond.She also received $600 from a savings account established for her by her parents.Jasmine lives with her parents and she is their dependent.What is Jasmine's gross tax liability? (Use the Estates and trusts and Tax rate schedules.)

All else equal, a reduction in regular income tax rates would require more taxpayers to pay the alternative minimum tax.

Hester (age 17)is claimed as a dependent by his parents, Charlton and Abigail.In 2019, Hester received $10,000 of qualified dividends, and he received $12,000 from a part-time job.What is his taxable income for 2019?

An individual could pay 100 percent of her tax liability by the due date of her tax return and still be subject to underpayment tax penalties.

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Which of the following statements regarding credits is correct?

The tax rate schedules are set up to tax lower levels of income at higher tax rates than higher levels of income.

Employees are not allowed to deduct FICA taxes they pay.

The earned income credit is sometimes referred to as a negative income tax.

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

If a married couple has one primary breadwinner, filing a joint return will likely result in a marriage penalty.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual From Agi Deductions

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

Filters

Exam 8: Individual Income Tax Computation and Tax Credits

If there is not enough gross tax liability to use the foreign tax credit, ________.

Depending on the year, the original (unextended)due date for an individual's tax return may be after April 15.

Which of the following suggests that a working taxpayer is an independent contractor rather than an employee?

Trudy is Jocelyn's friend.Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work.During the year, Jocelyn paid Trudy $4,000 to care for her son.What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $30,000? (Exhibit 8-9)

During 2019, Jasmine (age 12)received $6,500 from a corporate bond.She also received $600 from a savings account established for her by her parents.Jasmine lives with her parents and she is their dependent.What is Jasmine's gross tax liability? (Use the Estates and trusts and Tax rate schedules.)

All else equal, a reduction in regular income tax rates would require more taxpayers to pay the alternative minimum tax.

Hester (age 17)is claimed as a dependent by his parents, Charlton and Abigail.In 2019, Hester received $10,000 of qualified dividends, and he received $12,000 from a part-time job.What is his taxable income for 2019?

An individual could pay 100 percent of her tax liability by the due date of her tax return and still be subject to underpayment tax penalties.

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Which of the following statements regarding credits is correct?

The tax rate schedules are set up to tax lower levels of income at higher tax rates than higher levels of income.

Employees are not allowed to deduct FICA taxes they pay.

The earned income credit is sometimes referred to as a negative income tax.

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

If a married couple has one primary breadwinner, filing a joint return will likely result in a marriage penalty.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual From Agi Deductions

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

Filters