Question 1

The use of the earned income credit could result in a taxpayer receiving a refund even though he or she has not paid any income taxes.

Accepted Answer

A) True 
 B)False  True

Question 2

In 2019, Erin purchased a solar system to generate electricity for her home, at a cost of $5,000.
a. How much is her tax credit in 2019?
b. If she had purchased a solar heating system for her swimming pool at a cost of $3,500, how much could she claim as a tax credit?
c. If she had purchased a $5,000 solar electric system and a $4,500 solar heating system for her principal home (not for the swimming pool), how much could she claim as a tax credit?
d. If she had purchased the electric system for her principal residence and the solar heating system for a second residence, how much could she claim as a tax credit?

Accepted Answer

a. 30% of the cost of the improvement, or $1,500.
b. $0. Systems that heat swimming pools do not qualify for energy tax credits.
c. $1,500 for the electric system and $1,350 ($4,500 × 30%) for the solar heating system for a total of $2,850.
d. $2,850 ($1,500 + $1,350). Credits for purchases in these two categories can be claimed for both a principal and a second residence.

Question 3

To be eligible for the earned income credit for 2019, a taxpayer must have a "qualifying child."

Accepted Answer

A) True 
 B)False  False

Question 4

In 2019, Brady purchases a 2019 Nissan Leaf electric vehicle for his personal use. He is eligible to claim a credit of $7,500. He is in the 35 percent marginal tax bracket and his regular tax liability before credits is $14,800. What is the tax benefit Brady realizes from this purchase?

Accepted Answer

$7,500. The $7,500 c

Question 5

The child and dependent care provisions:

Accepted Answer

A) Apply only to children under age 15. 
B) Are available only to single parents. 
C) Are available for the care of spouses incapable of self-care. 
D) Are allowed only for taxpayers earning less than $43,000. 
A) Apply only to children under age 15. 
B) Are available only to single parents. 
C) Are available for the care of spouses incapable of self-care. 
D) Are allowed only for taxpayers earning less than $43,000.

Question 6

A taxpayer with earned income of $50,000 is not eligible to claim the credit for child and dependent care expenses.

Accepted Answer

A) True 
 B)False

Question 7

Marion has an 11-year-old daughter. Please calculate her child and dependent care credit prior to any tax liability limitation under these two alternatives:
a. Marion pays $4,000 a year in day care costs. Her salary is $32,000.
b. Marion pays $8,000 a year in day care costs. Her salary is $80,000.

Accepted Answer

a. $780, 26% of $3,0

Question 8

In 2019, the child tax credit available to married taxpayers filing jointly is phased out, beginning at:

Accepted Answer

A) $110,000 
B) $200,000 
C) $400,000 
D) $406,750 
A) $110,000 
B) $200,000 
C) $400,000 
D) $406,750

Question 9

Married taxpayers must generally file a joint tax return to claim the child and dependent care credit.

Accepted Answer

A) True 
 B)False

Question 10

An individual may claim both a credit and an exclusion from income in connection with the adoption of an eligible child, but may not claim both a credit and an exclusion for the same expense.

Accepted Answer

A) True 
 B)False

Question 11

Carla and Bob finalized an adoption in 2019. Their adoption fees totaled $9,500. They have AGI of $220,160 for 2019. What is their adoption credit?

Accepted Answer

A) $8,075 
B) $7,263 
C) $9,500 
D) $14,080 
A) $8,075 
B) $7,263 
C) $9,500 
D) $14,080

Question 12

Avery is a single, 26-year-old graduate student at State University with no children. She is a US citizen with a valid Social Security number. Her only income is from a part-time job on campus from which she earned wages of $6,000. Avery qualifies for the earned income credit.

Accepted Answer

A) True 
 B)False

Question 13

Robert and Mary file a joint tax return for 2019 with adjusted gross income of $34,000. Robert and Mary earned income of $20,000 and $14,000, respectively, during 2019. In order for Mary to be gainfully employed, they pay the following child care expenses for their 4-year-old son, John: Union Day Care Center $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\$ 1,700$
Wilma, baby sitter (Robert's mother) $\quad $ $\quad $ $\quad $$\$ 1,000$ What is the amount of the child and dependent care credit they should report on their tax return for 2019 (assume no tax liability limitation)?

Accepted Answer

A) $270 
B) $459 
C) $675 
D) $729 
E) None of these 
A) $270 
B) $459 
C) $675 
D) $729 
E) None of these

Question 14

Taxpayers are allowed two tax breaks for adoption expenses. They are allowed: Qualified Expenses
Paid personally $\quad$ $\quad $ $\quad $ Paid by employer

Accepted Answer

A) Credit Credit 
B) Exclusion Exclusion 
C) Credit Exclusion 
D) Exclusion Credit 
A) Credit Credit 
B) Exclusion Exclusion 
C) Credit Exclusion 
D) Exclusion Credit

Question 15

Edward takes a job in Canada working for an automobile manufacturer. He spends all of 2019 in Canada, earns $130,000 in wages, and is a bona fide resident of that country. How much foreign income exclusion can Edward claim?

Accepted Answer

The answer of Edward takes a job in Canada working...

Question 16

In determining the amount of the child and dependent care credit, there is a limit of $2,000 on the amount of qualified expenses for one dependent.

Accepted Answer

A) True 
 B)False

Question 17

Phillip and Naydeen Rivers are married with two dependent children. The family has household income of $40,160 in 2019. They paid $11,000 for health care for the year through the health care exchange. A designated silver plan would have cost $9,800. What is the Rivers' premium tax credit?

Accepted Answer

A) $0 
B) $7,941 
C) $8,033 
D) $11,000 
E) $9,800 
A) $0 
B) $7,941 
C) $8,033 
D) $11,000 
E) $9,800

Question 18

Sheila and Jerry are married taxpayers with $600 of foreign tax withholding from the dividends in a mutual fund. They have enough foreign income from the mutual fund to claim the full $600 as a foreign tax credit. They are in the 35% tax bracket and they itemize deductions. Should they claim the foreign tax credit on the Form 1040 or a deduction for foreign taxes on their Schedule A? Why?

Accepted Answer

Sheila and Jerry should claim the $600 a

Question 19

Fletch and Cammie Gates are married with three dependent children and household income of $52,956 in 2019. The Gates purchased health care insurance on their state's exchange for total premiums of $6,800. A designated silver plan for their family in their state costs $9,700. Calculate the Gates' premium tax credit.

Accepted Answer

$6,745. $52,956/$29,420 = 180% of the fe

Question 20

For the 2019 tax year, Sally, who is single, reported the following items of income: $$\begin{array} { l r } 
\text { Interest income } & \$ 600 \
\text { Wages } & \$ 4,100 \
\text { Earnings from self-employment } & \$ 3,000
\end{array}$$ She maintains a household for herself and her 1-year-old son who qualifies as her dependent. What is the earned income credit available to her for 2019, using the tables?

Accepted Answer

A) $503 
B) $1,369 
C) $2,423 
D) $529 
E) None of these is correct 
A) $503 
B) $1,369 
C) $2,423 
D) $529 
E) None of these is correct

The use of the earned income credit could result in a taxpayer receiving a refund even though he or she has not paid any income taxes.

To be eligible for the earned income credit for 2019, a taxpayer must have a "qualifying child."

In 2019, Brady purchases a 2019 Nissan Leaf electric vehicle for his personal use. He is eligible to claim a credit of $7,500. He is in the 35 percent marginal tax bracket and his regular tax liability before credits is $14,800. What is the tax benefit Brady realizes from this purchase?

The child and dependent care provisions:

A taxpayer with earned income of $50,000 is not eligible to claim the credit for child and dependent care expenses.

Marion has an 11-year-old daughter. Please calculate her child and dependent care credit prior to any tax liability limitation under these two alternatives: a. Marion pays $4,000 a year in day care costs. Her salary is $32,000. b. Marion pays $8,000 a year in day care costs. Her salary is $80,000.

In 2019, the child tax credit available to married taxpayers filing jointly is phased out, beginning at:

Married taxpayers must generally file a joint tax return to claim the child and dependent care credit.

An individual may claim both a credit and an exclusion from income in connection with the adoption of an eligible child, but may not claim both a credit and an exclusion for the same expense.

Carla and Bob finalized an adoption in 2019. Their adoption fees totaled $9,500. They have AGI of $220,160 for 2019. What is their adoption credit?

Avery is a single, 26-year-old graduate student at State University with no children. She is a US citizen with a valid Social Security number. Her only income is from a part-time job on campus from which she earned wages of $6,000. Avery qualifies for the earned income credit.

Taxpayers are allowed two tax breaks for adoption expenses. They are allowed: Qualified Expenses Paid personally $\quad$ $\quad$ $\quad$ Paid by employer

Edward takes a job in Canada working for an automobile manufacturer. He spends all of 2019 in Canada, earns $130,000 in wages, and is a bona fide resident of that country. How much foreign income exclusion can Edward claim?

In determining the amount of the child and dependent care credit, there is a limit of $2,000 on the amount of qualified expenses for one dependent.

Phillip and Naydeen Rivers are married with two dependent children. The family has household income of $40,160 in 2019. They paid $11,000 for health care for the year through the health care exchange. A designated silver plan would have cost $9,800. What is the Rivers' premium tax credit?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses

Additional Income and the Qualified Business Income Deduction

Deductions for and From AGI

Accounting Periods and Other Taxes

Depreciation and Sale of Business Property

Payroll, Estimated Payments and Retirement Plans

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 7: Tax Credits

The use of the earned income credit could result in a taxpayer receiving a refund even though he or she has not paid any income taxes.

To be eligible for the earned income credit for 2019, a taxpayer must have a "qualifying child."

In 2019, Brady purchases a 2019 Nissan Leaf electric vehicle for his personal use. He is eligible to claim a credit of $7,500. He is in the 35 percent marginal tax bracket and his regular tax liability before credits is $14,800. What is the tax benefit Brady realizes from this purchase?

The child and dependent care provisions:

A taxpayer with earned income of $50,000 is not eligible to claim the credit for child and dependent care expenses.

Marion has an 11-year-old daughter. Please calculate her child and dependent care credit prior to any tax liability limitation under these two alternatives: a. Marion pays $4,000 a year in day care costs. Her salary is $32,000. b. Marion pays $8,000 a year in day care costs. Her salary is $80,000.

In 2019, the child tax credit available to married taxpayers filing jointly is phased out, beginning at:

Married taxpayers must generally file a joint tax return to claim the child and dependent care credit.

An individual may claim both a credit and an exclusion from income in connection with the adoption of an eligible child, but may not claim both a credit and an exclusion for the same expense.

Carla and Bob finalized an adoption in 2019. Their adoption fees totaled $9,500. They have AGI of $220,160 for 2019. What is their adoption credit?

Avery is a single, 26-year-old graduate student at State University with no children. She is a US citizen with a valid Social Security number. Her only income is from a part-time job on campus from which she earned wages of $6,000. Avery qualifies for the earned income credit.

Taxpayers are allowed two tax breaks for adoption expenses. They are allowed: Qualified Expenses Paid personally \quad \quad \quad Paid by employer

Edward takes a job in Canada working for an automobile manufacturer. He spends all of 2019 in Canada, earns $130,000 in wages, and is a bona fide resident of that country. How much foreign income exclusion can Edward claim?

In determining the amount of the child and dependent care credit, there is a limit of $2,000 on the amount of qualified expenses for one dependent.

Phillip and Naydeen Rivers are married with two dependent children. The family has household income of $40,160 in 2019. They paid $11,000 for health care for the year through the health care exchange. A designated silver plan would have cost $9,800. What is the Rivers' premium tax credit?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses

Additional Income and the Qualified Business Income Deduction

Deductions for and From AGI

Accounting Periods and Other Taxes

Depreciation and Sale of Business Property

Payroll, Estimated Payments and Retirement Plans

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Taxpayers are allowed two tax breaks for adoption expenses. They are allowed: Qualified Expenses Paid personally $\quad$ $\quad$ $\quad$ Paid by employer