Exam 14: The Individual Tax Formula

Mr. and Mrs. Arlette spent $5,900 for child care for their 12-year-old daughter. Mr. Arlette's earned income was $178,000, Mrs. Arlette's earned income was $33,100, and the AGI on their joint return was $225,200. Calculate their dependent care credit.

Mr. and Mrs. Borem spent $1,435 for child care for their two dependent children, who are two and four years old. Mr. Borem's earned income was $55,870, Mrs. Borem had no earned income, and the AGI on their joint return was $66,210. Calculate their dependent care credit.

Which of the following statements is false?

Alice is an unmarried individual. She has $182,340 taxable income in 2020. Compute Alice's regular tax liability if she files as a single taxpayer and if she files as a head of household.

Mr. Andrews is age 58, legally blind, and files as a single taxpayer. His standard deduction for 2020 is $12,400.

Which of the following statements regarding the calculation of taxable income is false?

Which of the following statements concerning the individual alternative minimum tax (AMT) is true?

Mr. and Mrs. Liddy, ages 39 and 41, file a joint return and have no dependents for the year. Here is their relevant information: Standard Deduction Table. Salaries \4 7,000 Taxable interest income 5,000 Above-the-line deductions 1,800 Itemized deductions 16,250 Compute their adjusted gross income (AGI) and taxable income.

In determining the standard deduction, which of the following statements is true?

Every individual taxpayer is entitled to an AMT exemption, the amount of which varies with filing status.

Charlie is single and provides 100% of the financial support for his dependent mother, Angela, who lives with Charlie. Charlie's filing status is head of household.

Mr. and Mrs. Luang reported $1,417,900 ordinary taxable income for regular tax purposes and had $139,100 positive AMT adjustments and preferences. Compute their tentative minimum tax.

Mr. Jones and his first wife were legally divorced on February 19, 2020. Mr. Jones remarried the second Mrs. Jones on December 20, 2020. Which of the following describes Mr. Jones' filing status in 2020?

In order to be considered a dependent, an individual must be either a qualifying child or a qualifying relative.

Lennie and Margo spent $2,800 for child care for their 7-year-old son. Lennie's earned income was $41,000, Margo's earned income was $24,800, and the AGI on their joint return was $71,200. Calculate their dependent care credit.

Mrs. Lincoln was employed by GGH Inc. until October, when she accepted a new position with Murdock Inc. Mrs. Lincoln earned $145,000 compensation from GGH and $36,000 compensation from Murdock. Which of the following statements is false?

Leon died on August 23, 2017, and his wife Mary has not remarried. Since her husband's death, Mary has maintained a home for her two dependent children, who were ages 7 and 4 when their father died. Which of the following describes Mary's filing status for 2018, 2019, and 2020?

The majority of individual taxpayers take the standard deduction rather than itemizing their deductions.

The standard deduction is not deductible in the computation of alternative minimum taxable income.

Mr. and Mrs. Cox reported $490,000 AGI on their joint return. The couple has three dependent children under age 17. Compute their child tax credit.