Question 1

Which of the following best describes the manner in which self-employed taxpayers may deduct self-employment taxes?

Accepted Answer

A) Deduct employer portion from AGI. 
B) Deduct entire amount from AGI. 
C) Deduct employer portion for AGI. 
D) Deduct entire amount for AGI. 
E) No deduction. 
A) Deduct employer portion from AGI. 
B) Deduct entire amount from AGI. 
C) Deduct employer portion for AGI. 
D) Deduct entire amount for AGI. 
E) No deduction.

Question 2

Montague (age 15)is claimed as a dependent by his parents,Matt and Mary.In 2019,Montague received $5,000 of qualified dividends,and he received $800 from a part-time job.What is his taxable income for 2019?

Accepted Answer

A) $0 
B) $3,900 
C) $4,650 
D) $4,750 
A) $0 
B) $3,900 
C) $4,650 
D) $4,750

Question 3

Which of the following statements regarding FICA taxes is true?

Accepted Answer

A) Low-income employees are not required to pay FICA taxes. 
B) An employee who has two different employers during the year may be entitled to a tax credit for overpaid FICA taxes. 
C) The maximum amount of Medicare taxes an employee is required to pay is capped each year but the maximum amount of Social Security taxes is not. 
D) The wage base limit for Social Security taxes depends on the taxpayer's filing status. 
A) Low-income employees are not required to pay FICA taxes. 
B) An employee who has two different employers during the year may be entitled to a tax credit for overpaid FICA taxes. 
C) The maximum amount of Medicare taxes an employee is required to pay is capped each year but the maximum amount of Social Security taxes is not. 
D) The wage base limit for Social Security taxes depends on the taxpayer's filing status.

Question 4

Clarissa's gross tax liability for 2019 is $1,300.She has a $1,500 nonrefundable personal tax credit,a $750 business tax credit,and a $400 refundable personal tax credit.Her employer withheld $1,000 from her pay for taxes.What is her net tax due or refund for this year?

Accepted Answer

Refund of

Question 5

Kaelyn's mother,Judy,looks after Kaelyn's four-year-old twins so Kaelyn can go to work (she drops off and picks up the twins from Judy's home every day).Since Judy is a relative,Kaelyn made sure,for tax purposes,to pay her mother the going rate for child care ($6,300 for the year).What is the amount of Kaelyn's child and dependent care credit if her AGI for the year was $36,000? (Exhibit 8-9)

Accepted Answer

A) $1,440 
B) $2,100 
C) $6,000 
D) $0 
A) $1,440 
B) $2,100 
C) $6,000 
D) $0

Question 6

What is the underpayment penalty rate that taxpayers pay when they underpay their estimated taxes?

Accepted Answer

A) Federal short-term interest rate 
B) Federal short-term interest rate plus 3 percentage points 
C) Federal long-term interest rate plus 6 percentage points 
D) Zero.The government does not pay interest on overpayments 
A) Federal short-term interest rate 
B) Federal short-term interest rate plus 3 percentage points 
C) Federal long-term interest rate plus 6 percentage points 
D) Zero.The government does not pay interest on overpayments

Question 7

Carolyn has an AGI of $38,000 (all from earned income)and two qualifying children and is filing as a head of household.What amount of earned income credit is she entitled to? (Exhibit 8-10)

Accepted Answer

A) $0 
B) $1,833 
C) $3,526 
D) $3,995 
E) $5,828 
A) $0 
B) $1,833 
C) $3,526 
D) $3,995 
E) $5,828

Question 8

Taxpayers are generally allowed to carry back and/or carry forward unused business credits.

Accepted Answer

A) True 
 B)False

Question 9

Tax rate schedules are provided for use by (relatively)higher-income taxpayers,while the tax tables are provided for use by (relatively)lower-income taxpayers.

Accepted Answer

A) True 
 B)False

Question 10

Cassy reports a gross tax liability of $1,000.She also claims $400 of nonrefundable personal credits,$700 of refundable personal credits,and $200 of business credits.What is Cassy's tax refund or tax liability due after applying the credits?

Accepted Answer

A) $1,000 taxes payable 
B) $0 refund or taxes payable 
C) $700 refund 
D) $300 refund 
A) $1,000 taxes payable 
B) $0 refund or taxes payable 
C) $700 refund 
D) $300 refund

Question 11

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 12

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold.This threshold is generally the ________.

Accepted Answer

A) applicable standard deduction amount 
B) AMT exemption amount 
C) twice the applicable standard deduction amount 
D) applicable standard deduction amount plus the personal exemption amount 
A) applicable standard deduction amount 
B) AMT exemption amount 
C) twice the applicable standard deduction amount 
D) applicable standard deduction amount plus the personal exemption amount

Question 13

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)
   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 14

Generally,income from an active trade or business is subject to the 3.8 percent net investment income tax.

Accepted Answer

A) True 
 B)False

Which of the following best describes the manner in which self-employed taxpayers may deduct self-employment taxes?

Montague (age 15)is claimed as a dependent by his parents,Matt and Mary.In 2019,Montague received $5,000 of qualified dividends,and he received $800 from a part-time job.What is his taxable income for 2019?

Which of the following statements regarding FICA taxes is true?

Clarissa's gross tax liability for 2019 is $1,300.She has a $1,500 nonrefundable personal tax credit,a $750 business tax credit,and a $400 refundable personal tax credit.Her employer withheld $1,000 from her pay for taxes.What is her net tax due or refund for this year?

What is the underpayment penalty rate that taxpayers pay when they underpay their estimated taxes?

Carolyn has an AGI of $38,000 (all from earned income)and two qualifying children and is filing as a head of household.What amount of earned income credit is she entitled to? (Exhibit 8-10)

Taxpayers are generally allowed to carry back and/or carry forward unused business credits.

Tax rate schedules are provided for use by (relatively)higher-income taxpayers,while the tax tables are provided for use by (relatively)lower-income taxpayers.

Cassy reports a gross tax liability of $1,000.She also claims $400 of nonrefundable personal credits,$700 of refundable personal credits,and $200 of business credits.What is Cassy's tax refund or tax liability due after applying the credits?

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.)

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold.This threshold is generally the ________.

Generally,income from an active trade or business is subject to the 3.8 percent net investment income tax.

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 Deductions

Investments

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation,reorganization,and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 8: Individual Income Tax Computation and Tax Credits

Which of the following best describes the manner in which self-employed taxpayers may deduct self-employment taxes?

Montague (age 15)is claimed as a dependent by his parents,Matt and Mary.In 2019,Montague received $5,000 of qualified dividends,and he received $800 from a part-time job.What is his taxable income for 2019?

Which of the following statements regarding FICA taxes is true?

Clarissa's gross tax liability for 2019 is $1,300.She has a $1,500 nonrefundable personal tax credit,a $750 business tax credit,and a $400 refundable personal tax credit.Her employer withheld $1,000 from her pay for taxes.What is her net tax due or refund for this year?

What is the underpayment penalty rate that taxpayers pay when they underpay their estimated taxes?

Carolyn has an AGI of $38,000 (all from earned income)and two qualifying children and is filing as a head of household.What amount of earned income credit is she entitled to? (Exhibit 8-10)

Taxpayers are generally allowed to carry back and/or carry forward unused business credits.

Tax rate schedules are provided for use by (relatively)higher-income taxpayers,while the tax tables are provided for use by (relatively)lower-income taxpayers.

Cassy reports a gross tax liability of $1,000.She also claims $400 of nonrefundable personal credits,$700 of refundable personal credits,and $200 of business credits.What is Cassy's tax refund or tax liability due after applying the credits?

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.)

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold.This threshold is generally the ________.

Generally,income from an active trade or business is subject to the 3.8 percent net investment income tax.

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 Deductions

Investments

Business Income,deductions,and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation,reorganization,and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Ustaxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters