Question 1

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  False

Question 2

Which of the following best describes the manner in which self-employed taxpayers may deduct self-employment taxes?

Accepted Answer

A) Deduct employer portion from AGI. 
B) Deduct entire amount from AGI. 
C) Deduct employer portion for AGI. 
D) Deduct entire amount for AGI. 
E) No deduction. 
A) Deduct employer portion from AGI. 
B) Deduct entire amount from AGI. 
C) Deduct employer portion for AGI. 
D) Deduct entire amount for AGI. 
E) No deduction. C

Question 3

The lifetime learning credit can be used toward the cost of any course of instruction to acquire or improve a taxpayer's job skills,no matter the age of the taxpayer.

Accepted Answer

A) True 
 B)False  True

Question 4

Generally,income from an active trade or business is subject to the 3.8% net investment income tax.

Accepted Answer

A) True 
 B)False

Question 5

Regular taxable income is the starting point for determining the alternative minimum tax.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following tax credits is fully refundable?

Accepted Answer

A) American opportunity credit. 
B) Dependent care credit. 
C) Earned income credit. 
D) None of the choices are correct. 
A) American opportunity credit. 
B) Dependent care credit. 
C) Earned income credit. 
D) None of the choices are correct.

Question 7

Employees are allowed to deduct a portion of the FICA taxes they pay.

Accepted Answer

A) True 
 B)False

Question 8

Depending on the year,the original (unextended)due date for an individual's tax return may be before April 15.

Accepted Answer

A) True 
 B)False

Question 9

Taxpayers are generally allowed to carry back and/or carry forward unused business credits.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements regarding the earned income credit is true?

Accepted Answer

A) It is a nonrefundable credit. 
B) It is possible that a taxpayer with more earned income may receive more credit than a taxpayer with less earned income. 
C) A 70-year-old taxpayer with no dependents can qualify for the credit in certain circumstances. 
D) A taxpayer whose only source of income is interest from corporate bonds is eligible for the credit. 
A) It is a nonrefundable credit. 
B) It is possible that a taxpayer with more earned income may receive more credit than a taxpayer with less earned income. 
C) A 70-year-old taxpayer with no dependents can qualify for the credit in certain circumstances. 
D) A taxpayer whose only source of income is interest from corporate bonds is eligible for the credit.

Question 11

Candace is claimed as a dependent on her parent's tax return.In 2018,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?

Accepted Answer

$444. Answ

Question 12

The computation of the alternative minimum tax base begins with regular taxable income.Which of the following is not part of the formula for computing the alternative minimum tax base?

Accepted Answer

A) Subtract state income taxes paid. 
B) Add the standard deduction amount if used for regular tax. 
C) Subtract the AMT exemption amount (if any). 
D) Add back tax-exempt interest from a private activity bond not issued in 2009 or 2010. 
A) Subtract state income taxes paid. 
B) Add the standard deduction amount if used for regular tax. 
C) Subtract the AMT exemption amount (if any). 
D) Add back tax-exempt interest from a private activity bond not issued in 2009 or 2010.

Question 13

Jocelyn,a single taxpayer,had $742,000 of taxable income in 2018.All of the income is ordinary.What is her tax liability for the year? (Use Tax Rate Schedule.)

Accepted Answer

$240,230,computed using the si

Question 14

Which of the following statements regarding the child and dependent care credit is false?

Accepted Answer

A) Taxpayers may claim a credit for only a portion of qualifying dependent care expenditures. 
B) If a taxpayer's income is too high,she will be ineligible to claim any child and dependent care credit. 
C) A single taxpayer must have earned income to claim any child and dependent care credit. 
D) A taxpayer is not eligible to claim the dependent care credit if any dependent relative provides the care. 
A) Taxpayers may claim a credit for only a portion of qualifying dependent care expenditures. 
B) If a taxpayer's income is too high,she will be ineligible to claim any child and dependent care credit. 
C) A single taxpayer must have earned income to claim any child and dependent care credit. 
D) A taxpayer is not eligible to claim the dependent care credit if any dependent relative provides the care.

Question 15

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 16

In 2018,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 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 $2,288. Answer computed as fol

Question 17

Which of the following is not true of the extension to file an individual tax return?

Accepted Answer

A) It is granted automatically by the IRS if requested. 
B) It must be requested by the original due date of the return. 
C) It extends the due date for the return and associated tax payments beyond the original due date of the tax return. 
D) The extension is for six months beyond the original due date. 
A) It is granted automatically by the IRS if requested. 
B) It must be requested by the original due date of the return. 
C) It extends the due date for the return and associated tax payments beyond the original due date of the tax return. 
D) The extension is for six months beyond the original due date.

Question 18

All else equal,taxpayers are more likely to be classified as employees rather than independent contractors if they are allowed to determine their own working hours and work without frequent oversight.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) for AGI deductions. 
B) from AGI deductions not subject to the two percent of AGI floor. 
C) from AGI deductions subject to a two percent of AGI floor. 
D) for AGI deductions limited to income from the business activities. 
A) for AGI deductions. 
B) from AGI deductions not subject to the two percent of AGI floor. 
C) from AGI deductions subject to a two percent of AGI floor. 
D) for AGI deductions limited to income from the business activities.

Question 20

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 three percentage points. 
C) Federal long-term interest rate plus six 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 three percentage points. 
C) Federal long-term interest rate plus six percentage points. 
D) Zero.The government does not pay interest on overpayments.

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

Which of the following best describes the manner in which self-employed taxpayers may deduct self-employment taxes?

The lifetime learning credit can be used toward the cost of any course of instruction to acquire or improve a taxpayer's job skills,no matter the age of the taxpayer.

Generally,income from an active trade or business is subject to the 3.8% net investment income tax.

Regular taxable income is the starting point for determining the alternative minimum tax.

Which of the following tax credits is fully refundable?

Employees are allowed to deduct a portion of the FICA taxes they pay.

Depending on the year,the original (unextended)due date for an individual's tax return may be before April 15.

Taxpayers are generally allowed to carry back and/or carry forward unused business credits.

Which of the following statements regarding the earned income credit is true?

Candace is claimed as a dependent on her parent's tax return.In 2018,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?

The computation of the alternative minimum tax base begins with regular taxable income.Which of the following is not part of the formula for computing the alternative minimum tax base?

Jocelyn,a single taxpayer,had $742,000 of taxable income in 2018.All of the income is ordinary.What is her tax liability for the year? (Use Tax Rate Schedule.)

Which of the following statements regarding the child and dependent care credit is false?

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

Which of the following is not true of the extension to file an individual tax return?

All else equal,taxpayers are more likely to be classified as employees rather than independent contractors if they are allowed to determine their own working hours and work without frequent oversight.

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

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

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 for Agi Deductions

Business Income, deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

Individual From Agi Deductions

Filters

Exam 7: Individual Income Tax Computation and Tax Credits

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

Which of the following best describes the manner in which self-employed taxpayers may deduct self-employment taxes?

The lifetime learning credit can be used toward the cost of any course of instruction to acquire or improve a taxpayer's job skills,no matter the age of the taxpayer.

Generally,income from an active trade or business is subject to the 3.8% net investment income tax.

Regular taxable income is the starting point for determining the alternative minimum tax.

Which of the following tax credits is fully refundable?

Employees are allowed to deduct a portion of the FICA taxes they pay.

Depending on the year,the original (unextended)due date for an individual's tax return may be before April 15.

Taxpayers are generally allowed to carry back and/or carry forward unused business credits.

Which of the following statements regarding the earned income credit is true?

Candace is claimed as a dependent on her parent's tax return.In 2018,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?

The computation of the alternative minimum tax base begins with regular taxable income.Which of the following is not part of the formula for computing the alternative minimum tax base?

Jocelyn,a single taxpayer,had $742,000 of taxable income in 2018.All of the income is ordinary.What is her tax liability for the year? (Use Tax Rate Schedule.)

Which of the following statements regarding the child and dependent care credit is false?

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

Which of the following is not true of the extension to file an individual tax return?

All else equal,taxpayers are more likely to be classified as employees rather than independent contractors if they are allowed to determine their own working hours and work without frequent oversight.

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

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

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 for Agi Deductions

Business Income, deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

Individual From Agi Deductions

Filters