Question 1

The disabled access credit is computed at the rate of 50% of all access expenditures incurred by the taxpayer during the year.

Accepted Answer

A) True 
 B)False

Question 2

Roger is considering making a $6,000 investment in a venture that its promoter promises will generate immediate tax benefits for him.Roger, who does not anticipate itemizing his deductions, is in the 30% marginal income tax bracket.If the investment is of a type that produces a tax credit of 40% of the amount of the expenditure, by how much will Roger's tax liability decline because of the investment?

Accepted Answer

A) $0 
B) $1,800 
C) $2,200 
D) $2,400 
E) None of these. 
A) $0 
B) $1,800 
C) $2,200 
D) $2,400 
E) None of these.

Question 3

A taxpayer may qualify for the credit for child and dependent care expenses if the taxpayer's dependent is under age 17.

Accepted Answer

A) True 
 B)False

Question 4

Cardinal Corporation hires two persons who are certified to be eligible employees for the work opportunity tax credit under the general rules (e.g., food stamp recipients), each of whom is paid $9,000 during the year.As a result of this event, Cardinal Corporation may claim a work opportunity credit of:

Accepted Answer

A) $1,440. 
B) $2,880. 
C) $4,800. 
D) $7,200. 
A) $1,440. 
B) $2,880. 
C) $4,800. 
D) $7,200.

Question 5

Both education tax credits are available for qualified tuition expenses, and in certain instances, also may be available for room and board.

Accepted Answer

A) True 
 B)False

Question 6

Bob and Sally are married, file a joint tax return, report AGI of $120,000, and have two children.Del is beginning her freshman year at State College during fall 2019, and Owen is beginning his senior year at Southwest University during fall 2019.Owen completed his junior year during the spring semester of 2018 (i.e., he took a "leave of absence" during the 2018-2019 school year).Both Del and Owen are claimed as dependents on their parents' tax return. Del's qualifying tuition expenses and fees total $5,000 for the fall semester and Owen's qualifying tuition expenses were $6,100 for the fall 2019 semester.Del's room and board costs were $3,200 for the fall semester.Owen did not incur room and board costs because he lived with his aunt and uncle during the year.
Full payment is made for the tuition and related expenses for both children at the beginning of each semester.In addition to the children's college expenses, Bob also spent $3,000 on professional education seminars during the year in order to maintain his license as a practicing dentist.Bob attended the seminars during July and August 2019.Compute the available education tax credits for Bob and Sally for 2019.

Accepted Answer

A) $3,100 
B) $5,000 
C) $5,480 
D) $5,600 
A) $3,100 
B) $5,000 
C) $5,480 
D) $5,600

Question 7

A LIFO method is applied to general business credit carryovers, carrybacks, and utilization of credits earned during a particular year.

Accepted Answer

A) True 
 B)False

Question 8

Refundable tax credits include the:

Accepted Answer

A) Foreign tax credit. 
B) Tax credit for rehabilitation expenses. 
C) Credit for certain retirement plan contributions. 
D) Earned income credit. 
E) None of these credits are refundable. 
A) Foreign tax credit. 
B) Tax credit for rehabilitation expenses. 
C) Credit for certain retirement plan contributions. 
D) Earned income credit. 
E) None of these credits are refundable.

Question 9

All taxpayers are eligible to take the basic research credit.

Accepted Answer

A) True 
 B)False

Question 10

If an employee holds two jobs during the year, an overwithholding of FICA tax always results.

Accepted Answer

A) True 
 B)False

Question 11

Nonrefundable credits are those that reduce the taxpayer's tax liability but are not paid when the amount of the credit (or credits) exceeds the taxpayer's tax liability.

Accepted Answer

A) True 
 B)False

Question 12

The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

Accepted Answer

A) True 
 B)False

Question 13

Child and dependent care expenses include amounts paid for general household services.

Accepted Answer

A) True 
 B)False

Question 14

The maximum child tax credit under current law is $1,500 per qualifying child.

Accepted Answer

A) True 
 B)False

Question 15

In terms of the withholding procedures, which statement does not reflect current rules?

Accepted Answer

A) Penalties can be imposed for filing false information with respect to wage withholding. 
B) An employer need not verify the number of exemptions claimed by an employee on Form W-4 (Employee's Withholding Allowance Certificate). 
C) An employee may claim fewer than the number of withholding allowances allowed but not more. 
D) In preparing the income tax return for the year, the employee is bound by the number of exemptions claimed for withholding purposes. 
A) Penalties can be imposed for filing false information with respect to wage withholding. 
B) An employer need not verify the number of exemptions claimed by an employee on Form W-4 (Employee's Withholding Allowance Certificate). 
C) An employee may claim fewer than the number of withholding allowances allowed but not more. 
D) In preparing the income tax return for the year, the employee is bound by the number of exemptions claimed for withholding purposes.

Question 16

Amber is in the process this year of renovating the office building (placed in service in 1976) used by her business. Because of current Federal Regulations that require the structure to be accessible to handicapped individuals, she incurs an additional $11,000 for various features, such as ramps and widened doorways, to make her office building more accessible.The $11,000 incurred will produce a disabled access credit of what amount?

Accepted Answer

A) $0 
B) $5,000 
C) $5,125 
D) $5,500 
A) $0 
B) $5,000 
C) $5,125 
D) $5,500

Question 17

Only self-employed individuals are required to make estimated tax payments.

Accepted Answer

A) True 
 B)False

Question 18

Certain high-income individuals are subject to three additional Medicare taxes on wages, unearned income, and tax credits claimed.

Accepted Answer

A) True 
 B)False

Question 19

The components of the general business credit include all of the following except:

Accepted Answer

A) Credit for employer-provided child care. 
B) Disabled access credit. 
C) Research activities credit. 
D) Tax credit for rehabilitation expenditures. 
E) All of these are components of the general business credit. 
A) Credit for employer-provided child care. 
B) Disabled access credit. 
C) Research activities credit. 
D) Tax credit for rehabilitation expenditures. 
E) All of these are components of the general business credit.

Question 20

The low-income housing credit is available to low-income tenants who reside in qualifying low-income housing.

Accepted Answer

A) True 
 B)False

The disabled access credit is computed at the rate of 50% of all access expenditures incurred by the taxpayer during the year.

A taxpayer may qualify for the credit for child and dependent care expenses if the taxpayer's dependent is under age 17.

Both education tax credits are available for qualified tuition expenses, and in certain instances, also may be available for room and board.

A LIFO method is applied to general business credit carryovers, carrybacks, and utilization of credits earned during a particular year.

Refundable tax credits include the:

All taxpayers are eligible to take the basic research credit.

If an employee holds two jobs during the year, an overwithholding of FICA tax always results.

Nonrefundable credits are those that reduce the taxpayer's tax liability but are not paid when the amount of the credit (or credits) exceeds the taxpayer's tax liability.

The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

Child and dependent care expenses include amounts paid for general household services.

The maximum child tax credit under current law is $1,500 per qualifying child.

In terms of the withholding procedures, which statement does not reflect current rules?

Only self-employed individuals are required to make estimated tax payments.

Certain high-income individuals are subject to three additional Medicare taxes on wages, unearned income, and tax credits claimed.

The components of the general business credit include all of the following except:

The low-income housing credit is available to low-income tenants who reside in qualifying low-income housing.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Property Transactions: Determination of Gain or Loss and Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Exam 13: Tax Credits and Payment Procedures

The disabled access credit is computed at the rate of 50% of all access expenditures incurred by the taxpayer during the year.

A taxpayer may qualify for the credit for child and dependent care expenses if the taxpayer's dependent is under age 17.

Both education tax credits are available for qualified tuition expenses, and in certain instances, also may be available for room and board.

A LIFO method is applied to general business credit carryovers, carrybacks, and utilization of credits earned during a particular year.

Refundable tax credits include the:

All taxpayers are eligible to take the basic research credit.

If an employee holds two jobs during the year, an overwithholding of FICA tax always results.

Nonrefundable credits are those that reduce the taxpayer's tax liability but are not paid when the amount of the credit (or credits) exceeds the taxpayer's tax liability.

The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

Child and dependent care expenses include amounts paid for general household services.

The maximum child tax credit under current law is $1,500 per qualifying child.

In terms of the withholding procedures, which statement does not reflect current rules?

Only self-employed individuals are required to make estimated tax payments.

Certain high-income individuals are subject to three additional Medicare taxes on wages, unearned income, and tax credits claimed.

The components of the general business credit include all of the following except:

The low-income housing credit is available to low-income tenants who reside in qualifying low-income housing.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Property Transactions: Determination of Gain or Loss and Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters