Question 1

The alternative minimum tax is the AMT base multiplied by the AMT rate.

Accepted Answer

A) True 
 B)False

Question 2

To qualify for the earned income credit,the taxpayer must have a qualified dependent.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is not a taxpayer filing status for purposes of determining the appropriate tax rate schedule?

Accepted Answer

A) Head of Household. 
B) Qualifying Widow or Widower. 
C) Married Filing Separately. 
D) Single. 
E) All of the these are taxpayer filing statuses 
A) Head of Household. 
B) Qualifying Widow or Widower. 
C) Married Filing Separately. 
D) Single. 
E) All of the these are taxpayer filing statuses

Question 4

IN THE TEXT
-Kaelyn's mother,Judy,looks after Kaelyn's four-year-old twins so Kaelyn can go to work (she drops off and picks up the twins from Judy's home every day).Since Judy is a relative,Kaelyn made sure,for tax purposes,to pay her mother the going rate for child care ($6,300 for the year).What is the amount of Kaelyn's child and dependent care credit if her AGI for the year was $36,000? (Exhibit 8-9)

Accepted Answer

A) $1,440 
B) $2,100 
C) $6,000 
D) $0 
A) $1,440 
B) $2,100 
C) $6,000 
D) $0

Question 5

Jerusha is married and she files a separate tax return in 2018.She claimed the standard deduction for regular tax purposes ($12,000).She had no other adjustments.Her regular taxable income was $67,800.What is Jerusha's AMTI?

Accepted Answer

$79,800 An

Question 6

The child tax credit is subject to phase-out based on the taxpayer's AGI.

Accepted Answer

A) True 
 B)False

Question 7

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 are Henry and Janice's net investment income tax liability this year,rounded to the nearest whole dollar amount?

Accepted Answer

$1,140 The tax is the 3.8% tim

Question 8

Tax credits reduce a taxpayer's taxable income dollar for dollar.

Accepted Answer

A) True 
 B)False

Question 9

Julien and Sarah are married,file a joint return,and have two children,Kaya and Christopher.Kaya just finished her third year at college and Christopher just finished his first year of graduate school (fifth year of college).Tuition and books for the past year were $1,800 for Kaya and $5,000 for Christopher.How much can Julien and Sarah claim in educational credits if their joint AGI was $126,000 for 2018?

Accepted Answer

$2,200. An

Question 10

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500.Given just this information,what is her alternative minimum tax liability for the year?

Accepted Answer

A) $0 
B) $11,500 
C) $975 
D) $12,475 
A) $0 
B) $11,500 
C) $975 
D) $12,475

Question 11

The earned income credit is sometimes referred to as a negative income tax.

Accepted Answer

A) True 
 B)False

Question 12

During 2018,Jasmine (age 12)received $6,500 from a corporate bond.She also received $600 from a savings account established for her by her parents.Jasmine lives with her parents and she is their dependent.What is Jasmine's gross tax liability?

Accepted Answer

A) $0 
B) $105 
C) $843 
D) $948 
A) $0 
B) $105 
C) $843 
D) $948

Question 13

Which of the following statements regarding FICA taxes is true?

Accepted Answer

A) Low income employees are not required to pay FICA taxes. 
B) An employee who has two different employers during the year may be entitled to a tax credit for overpaid FICA taxes. 
C) The maximum amount of Medicare taxes an employee is required to pay is capped each year but the maximum amount of Social Security taxes is not. 
D) The wage base limit for Social Security taxes depends on the taxpayer's filing status. 
A) Low income employees are not required to pay FICA taxes. 
B) An employee who has two different employers during the year may be entitled to a tax credit for overpaid FICA taxes. 
C) The maximum amount of Medicare taxes an employee is required to pay is capped each year but the maximum amount of Social Security taxes is not. 
D) The wage base limit for Social Security taxes depends on the taxpayer's filing status.

Question 14

Business credits are generally refundable credits.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements regarding credits is correct?

Accepted Answer

A) Business expenses are generally refundable credits. 
B) Business credits that are generated in one year but are not utilized in that year expire. 
C) Business credits that are generated in one year but are not utilized in that year may be carried forward to future years but not back to a prior year. 
D) Business credits that are generated in one year but are not utilized in that year may be carried back to the previous year and then forward to future years. 
A) Business expenses are generally refundable credits. 
B) Business credits that are generated in one year but are not utilized in that year expire. 
C) Business credits that are generated in one year but are not utilized in that year may be carried forward to future years but not back to a prior year. 
D) Business credits that are generated in one year but are not utilized in that year may be carried back to the previous year and then forward to future years.

Question 16

Jamie is single.In 2018,she reported $100,000 of taxable income,including a long-term capital gain of $5,000.What is her gross tax liability,rounded to the nearest whole dollar amount? (Use the tax rate schedules)

Accepted Answer

A) $19,443 
B) $18,290 
C) $17,840 
D) $15,000 
A) $19,443 
B) $18,290 
C) $17,840 
D) $15,000

Question 17

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Accepted Answer

A) True 
 B)False

Question 18

All capital gains are taxed at preferential rates.

Accepted Answer

A) True 
 B)False

Question 19

IN THE TEXT
-Trudy is Jocelyn's friend.Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work.During the year,Jocelyn paid Trudy $4,000 to care for her son.What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $30,000? (Exhibit 8-9)

Accepted Answer

A) $0 
B) $810 
C) $1,080 
D) $3,000 
A) $0 
B) $810 
C) $1,080 
D) $3,000

Question 20

Hester (age 17)is claimed as a dependent by his parents,Charlton and Abigail.In 2018,Hester received $10,000 of qualified dividends and he received $11,800 from a part time job.What is his taxable income for 2018?

Accepted Answer

A) $21,800 
B) $20,750 
C) $9,800 
D) $9,650 
A) $21,800 
B) $20,750 
C) $9,800 
D) $9,650

The alternative minimum tax is the AMT base multiplied by the AMT rate.

To qualify for the earned income credit,the taxpayer must have a qualified dependent.

Which of the following is not a taxpayer filing status for purposes of determining the appropriate tax rate schedule?

Jerusha is married and she files a separate tax return in 2018.She claimed the standard deduction for regular tax purposes ($12,000).She had no other adjustments.Her regular taxable income was $67,800.What is Jerusha's AMTI?

The child tax credit is subject to phase-out based on the taxpayer's AGI.

Tax credits reduce a taxpayer's taxable income dollar for dollar.

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500.Given just this information,what is her alternative minimum tax liability for the year?

The earned income credit is sometimes referred to as a negative income tax.

During 2018,Jasmine (age 12)received $6,500 from a corporate bond.She also received $600 from a savings account established for her by her parents.Jasmine lives with her parents and she is their dependent.What is Jasmine's gross tax liability?

Which of the following statements regarding FICA taxes is true?

Business credits are generally refundable credits.

Which of the following statements regarding credits is correct?

Jamie is single.In 2018,she reported $100,000 of taxable income,including a long-term capital gain of $5,000.What is her gross tax liability,rounded to the nearest whole dollar amount? (Use the tax rate schedules)

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

All capital gains are taxed at preferential rates.

Hester (age 17)is claimed as a dependent by his parents,Charlton and Abigail.In 2018,Hester received $10,000 of qualified dividends and he received $11,800 from a part time job.What is his taxable income for 2018?

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

The alternative minimum tax is the AMT base multiplied by the AMT rate.

To qualify for the earned income credit,the taxpayer must have a qualified dependent.

Which of the following is not a taxpayer filing status for purposes of determining the appropriate tax rate schedule?

Jerusha is married and she files a separate tax return in 2018.She claimed the standard deduction for regular tax purposes ($12,000).She had no other adjustments.Her regular taxable income was $67,800.What is Jerusha's AMTI?

The child tax credit is subject to phase-out based on the taxpayer's AGI.

Tax credits reduce a taxpayer's taxable income dollar for dollar.

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500.Given just this information,what is her alternative minimum tax liability for the year?

The earned income credit is sometimes referred to as a negative income tax.

During 2018,Jasmine (age 12)received $6,500 from a corporate bond.She also received $600 from a savings account established for her by her parents.Jasmine lives with her parents and she is their dependent.What is Jasmine's gross tax liability?

Which of the following statements regarding FICA taxes is true?

Business credits are generally refundable credits.

Which of the following statements regarding credits is correct?

Jamie is single.In 2018,she reported $100,000 of taxable income,including a long-term capital gain of $5,000.What is her gross tax liability,rounded to the nearest whole dollar amount? (Use the tax rate schedules)

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

All capital gains are taxed at preferential rates.

Hester (age 17)is claimed as a dependent by his parents,Charlton and Abigail.In 2018,Hester received $10,000 of qualified dividends and he received $11,800 from a part time job.What is his taxable income for 2018?

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