Exam 8: Individual Income Tax Computation and Tax Credits

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500.Given just this information,what is her alternative minimum tax liability for the year?

Which of the following items is not added back to regular taxable income in computing alternative minimum taxable income?

Which of the following statements regarding the child and dependent care credit is true?

Selene made $54,300 in 2019 working at the local burger joint,Moon Café.How much should her employer withhold from her paycheck for FICA taxes if the calculation is made correctly?

Assume Georgianne underpaid her estimated tax liability by $150 in the first quarter,$500 in the second quarter,$400 in the third quarter,and $200 in the fourth quarter.Calculate her underpayment penalty for the year,assuming the federal short-term interest rate is 5 percent.

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

The taxable income levels in the married filing jointly tax rate schedule are ________ those in the married filing separately schedule.

Linda is a qualifying widow in 2019.In 2019,she reports $80,000 of taxable income (all ordinary).What is her gross tax liability using the tax rate schedules? (Tax rate schedules.)

Angelena files as a head of household.In 2019,she reported $53,450 of taxable income,including a $10,000 qualified dividend.What is her gross tax liability,rounded to the nearest whole dollar amount? (Use the Tax rate schedules,long-term capital gains tax brackets.)

What happens if the taxpayer owes an underpayment penalty,but does not compute it on Form 2210?

If both spouses of a married couple earn roughly equivalent high levels of wages,the couple is likely to pay a marriage penalty due to the nature of the tax rate schedules.

The late payment penalty is based on the amount of tax owed and the number of days that the tax is not paid.The maximum amount of the penalty is unlimited.

A marriage penalty occurs when a couple pays more taxes by filing a joint tax return than they would have paid had they filed married filing separately.

Long-term capital gains,dividends,and taxable interest income are all taxed at preferential rates.

Wolfina's twins,Romulus and Remus,finished their first year of school at an accredited university in 2019.She paid $10,000 in qualified educational expenses for Romulus and $2,000 of qualifying expenses for Remus.Wolfina is a head of household with an AGI of $85,000.What amount of American opportunity credit may she claim?

To qualify for the earned income credit,the taxpayer must have a qualified dependent.

The Olympians have three children.The kiddie tax applies to unearned income received by which of the following children?

An 80-year-old taxpayer with earned income and no dependent children could qualify for the earned income credit.

For alternative minimum tax purposes,taxpayers are required to add back the regular tax standard deduction amount for their filing status whether or not they itemized deductions for regular tax purposes.

Atlas earned $17,300 from his sole proprietorship in 2019.This was his only source of income.How much in self-employment taxes will Atlas be able to deduct?