Question 1

If there is not enough gross tax liability to use the foreign tax credit, _____.

Accepted Answer

A) it expires unused 
B) it is carried back two years or forward 20 years 
C) it is carried back three years or forward five years 
D) it is carried back one year or forward 10 years 
A) it expires unused 
B) it is carried back two years or forward 20 years 
C) it is carried back three years or forward five years 
D) it is carried back one year or forward 10 years

Question 2

Henry and Janice are married and file jointly. They have an AGI (and modified AGI)of $290,000, which includes $90,000 of salary, $170,000 of active business income, $10,000 of interest income, $15,000 of dividends, and $5,000 of long-term capital gains. What is Henry and Janice's net investment income tax liability this year? (Round your final answer to the nearest whole dollar amount.)

Accepted Answer

$1,140
The tax is 3.8 percent

Question 3

Maria and Tony are married. They are preparing to file their 2020 tax return. If they were to file as single taxpayers, Maria and Tony would report $10,000 and $70,000 of taxable income, respectively. On their joint tax return, their taxable income is $80,000. How much of a marriage penalty or benefit will Maria and Tony experience in 2020? (Use tax rate schedules.)

Accepted Answer

Filing jointly will result in a "marriag

Question 4

Individuals may file for and receive a six-month extension of time to file their tax return and pay their taxes without penalty.

Accepted Answer

A) True 
 B)False

Question 5

Angelena files as a head of household. In 2020, she reported $56,300 of taxable income, including a $16,000 qualified dividend. What is her gross tax liability? (Round your answer to the nearest whole dollar amount.)(Use the tax rate schedules, long-term capital gains tax brackets)

Accepted Answer

A) $5,804 
B) $4,959 
C) $6,057 
D) $4,554 
A) $5,804 
B) $4,959 
C) $6,057 
D) $4,554

Question 6

If an employer withholds taxes from an employee, in general, when are these taxes treated as paid to the IRS?

Accepted Answer

A) As withheld 
B) As the employee requests on his/her W-4 form 
C) Evenly throughout the year 
D) On April 15 
A) As withheld 
B) As the employee requests on his/her W-4 form 
C) Evenly throughout the year 
D) On April 15

Question 7

The alternative minimum tax system requires taxpayers to apply an alternative tax rate on the regular income tax base to determine the amount of the alternative minimum tax.

Accepted Answer

A) True 
 B)False

Question 8

Keith and Nicole are married filing jointly, with two daughters who qualify as dependents. Their gross income for 2020 is $25,500. Are they required to file a tax return? How do you know this without memorizing the gross income thresholds? In 2020, the standard deduction for taxpayers filing a joint return is $24,800.

Accepted Answer

Yes, Keith and Nicole are required to fi

Question 9

Persephone has a regular tax liability of $14,175 and a tentative minimum tax of $11,670. Given just this information, what is her alternative minimum tax liability for the year?

Accepted Answer

A) $0 
B) $11,670 
C) $2,505 
D) $14,175 
A) $0 
B) $11,670 
C) $2,505 
D) $14,175

Question 10

Parents may claim a $2,000 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.

Accepted Answer

A) True 
 B)False

Question 11

Sheryl's AGI is $251,100. Her current tax liability is $52,178. Last year, her tax liability was $48,832. She will not owe underpayment penalties if her total estimated tax payments are at least which of the following (rounded)amounts? (Assume she makes the required payments each quarter.)

Accepted Answer

A) $46,960 
B) $48,832 
C) $51,656 
D) $53,715 
A) $46,960 
B) $48,832 
C) $51,656 
D) $53,715

Question 12

The wage base for which of the following taxes is capped?

Accepted Answer

A) Federal income 
B) Social Security 
C) Medicare 
D) Alternative minimum 
A) Federal income 
B) Social Security 
C) Medicare 
D) Alternative minimum

Question 13

Baker is single and earned $227,000 of salary as an employee in 2020. How much should his employer have withheld from his paycheck for FICA taxes? (Round your answer to the nearest whole dollar amount.)

Accepted Answer

A) $12,072 
B) $11,800 
C) $10,562 
D) $17,260 
A) $12,072 
B) $11,800 
C) $10,562 
D) $17,260

Question 14

Costa is a single taxpayer. His regular tax liability was $38,000. For 2020, he reported $190,000 of alternative minimum taxable income. What is his alternative minimum tax?

Accepted Answer

$0.
Answer computed as follows:
Costa's

Question 15

Stephanie and Mitch are married and they file a joint tax return. Mitch received a slightly higher salary than Stephanie did during the year.They both make very high salaries. Which of the following statements is true?

Accepted Answer

A) Stephanie and Mitch likely pay no tax marriage penalty nor receive a tax marriage benefit. 
B) Stephanie and Mitch likely pay a tax marriage penalty. 
C) Stephanie and Mitch likely receive a tax marriage benefit. 
D) Stephanie and Mitch likely will pay a tax marriage penalty and receive a tax marriage benefit. 
A) Stephanie and Mitch likely pay no tax marriage penalty nor receive a tax marriage benefit. 
B) Stephanie and Mitch likely pay a tax marriage penalty. 
C) Stephanie and Mitch likely receive a tax marriage benefit. 
D) Stephanie and Mitch likely will pay a tax marriage penalty and receive a tax marriage benefit.

Question 16

Which of the following is not one of the general tax credit categories?

Accepted Answer

A) Nonrefundable personal 
B) Refundable personal 
C) Business 
D) Refundable business 
A) Nonrefundable personal 
B) Refundable personal 
C) Business 
D) Refundable business

Question 17

Which of the following is not an additional tax a taxpayer may have to pay?

Accepted Answer

A) Alternative minimum tax 
B) Self-employment tax 
C) Net investment income tax 
D) Excess wage tax 
A) Alternative minimum tax 
B) Self-employment tax 
C) Net investment income tax 
D) Excess wage tax

Question 18

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 19

In 2020, John (52 years old)files as a head of household with one 18-year old dependent (qualifying)child. John is eligible to claim a $700 American opportunity tax credit for the year. John did not have any taxes withheld by his employer during the year and he did not make any estimated tax payments. After taking credits into account, what is the amount of John's taxes payable or refund, assuming that his AGI is $26,000 (all from salary)and his taxable income is $8,000?

Accepted Answer

Refund of $2,798.
Answer compu

Question 20

Paul and Melissa plan on filing jointly in 2020. For the year, the couple reported taxable income of $130,000. What is their gross tax liability? (Use tax rate schedules.)

Accepted Answer

$20,180, computed as

Exam 8: Individual Income Tax Computation and Tax Credits

If there is not enough gross tax liability to use the foreign tax credit, _____.

Individuals may file for and receive a six-month extension of time to file their tax return and pay their taxes without penalty.

Angelena files as a head of household. In 2020, she reported $56,300 of taxable income, including a $16,000 qualified dividend. What is her gross tax liability? (Round your answer to the nearest whole dollar amount.)(Use the tax rate schedules, long-term capital gains tax brackets)

If an employer withholds taxes from an employee, in general, when are these taxes treated as paid to the IRS?

The alternative minimum tax system requires taxpayers to apply an alternative tax rate on the regular income tax base to determine the amount of the alternative minimum tax.

Persephone has a regular tax liability of $14,175 and a tentative minimum tax of $11,670. Given just this information, what is her alternative minimum tax liability for the year?

Parents may claim a $2,000 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.

Sheryl's AGI is $251,100. Her current tax liability is $52,178. Last year, her tax liability was $48,832. She will not owe underpayment penalties if her total estimated tax payments are at least which of the following (rounded)amounts? (Assume she makes the required payments each quarter.)

The wage base for which of the following taxes is capped?

Baker is single and earned $227,000 of salary as an employee in 2020. How much should his employer have withheld from his paycheck for FICA taxes? (Round your answer to the nearest whole dollar amount.)

Costa is a single taxpayer. His regular tax liability was $38,000. For 2020, he reported $190,000 of alternative minimum taxable income. What is his alternative minimum tax?

Stephanie and Mitch are married and they file a joint tax return. Mitch received a slightly higher salary than Stephanie did during the year.They both make very high salaries. Which of the following statements is true?

Which of the following is not one of the general tax credit categories?

Which of the following is not an additional tax a taxpayer may have to pay?

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

Paul and Melissa plan on filing jointly in 2020. For the year, the couple reported taxable income of $130,000. What is their gross tax liability? (Use tax rate schedules.)

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 Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters