Exam 8: Individual Income Tax Computation and Tax Credits

In 2017, Maia (who files as a head of household) reported regular taxable income of$115,000. She itemized her deductions, deducting $8,000 in charitable contributions and$3,000 in state income taxes. She claimed exemptions for herself and her son, Hermes, ($4,050 each). What is Maia's alternative minimum taxable income?

Parents may claim a child tax credit for a dependent child who is 22 years of age at the end of the year if the child is a full-time student.

Employee status is always better than independent contractor status for a taxpayerbecause the employee is responsible for paying the employee portion of the FICA taxes.

Which of the following is not a taxpayer filing status for purposes of determining the appropriate tax rate schedule?

Candace is claimed as a dependent on her parent's tax return. Her parents' ordinary income marginal tax rate is 33%. In 2017, Candace received $5,000 of interest income from corporate bonds she obtained several years ago. This is her only source of income. She is 15 years old at year-end. What is her gross tax liability?

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

For taxpayers who receive both salary as an employee and self-employment income as an independent contractor in the same year, which of the following statements regarding FICA and self-employment taxes is most accurate?

Which of the following statements best describes the deductions independent contractors may claim for valid business expenses?

The alternative minimum tax is the AMT base multiplied by the AMT rate.

Which of the following statement(s) concerning estimated tax payments and underpayment penalties for individuals is (are) true?

Looking at the following partial calendar for April, when will individual tax returns be due?121)

Business credits are generally refundable credits.

Paul and Melissa plan on filing jointly in 2017. For the year, the couple reported taxable income of$130,000. What is their gross tax liability? (Use Tax Rate Schedule.)

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

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

Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work. His AGI for the year was $37,500 (all earned income). What is the amount of his child and dependent carecredit?

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

Which of the following is not a barrier to income shifting among family members?

Self-employed taxpayers are allowed to deduct the full amount of the self-employment taxes they pay.

The amount of expenditures eligible for the child and dependent care credit is the least of three amounts. Which of the following is not one of those amounts?