Question 1

Which of the following represents the correct order in which credits are applied to gross tax liability (from first to last)?

Accepted Answer

A) Nonrefundable personal,business,refundable. 
B) Business,nonrefundable personal,refundable. 
C) Refundable,nonrefundable personal,business. 
D) Refundable,business,nonrefundable personal. 
A) Nonrefundable personal,business,refundable. 
B) Business,nonrefundable personal,refundable. 
C) Refundable,nonrefundable personal,business. 
D) Refundable,business,nonrefundable personal.

Question 2

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Accepted Answer

A) Taxpayers who have paid their full tax liability by the original tax return due date are protected from underpayment penalties. 
B) Taxpayers who have paid their full tax liability by the extended tax return due date are protected from underpayment penalties. 
C) Taxpayers who have uneven income streams can pay estimated tax quarterly in uneven amounts and not be susceptible to underpayment penalties. 
D) Taxpayers who have paid their required amount of estimated tax,even though not on time,are protected from underpayment penalties. 
A) Taxpayers who have paid their full tax liability by the original tax return due date are protected from underpayment penalties. 
B) Taxpayers who have paid their full tax liability by the extended tax return due date are protected from underpayment penalties. 
C) Taxpayers who have uneven income streams can pay estimated tax quarterly in uneven amounts and not be susceptible to underpayment penalties. 
D) Taxpayers who have paid their required amount of estimated tax,even though not on time,are protected from underpayment penalties.

Question 3

Hera earned $175,000 salary in 2018.Her husband,Zeus,earned $100,000 salary in 2018.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2018?

Accepted Answer

A) $15,922 
B) $18,374 
C) $19,547 
D) $4,213 
A) $15,922 
B) $18,374 
C) $19,547 
D) $4,213

Question 4

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold.This threshold is generally the ________.

Accepted Answer

A) applicable standard deduction amount 
B) AMT exemption amount 
C) twice the applicable standard deduction amount 
D) applicable standard deduction amount plus the personal exemption amount 
A) applicable standard deduction amount 
B) AMT exemption amount 
C) twice the applicable standard deduction amount 
D) applicable standard deduction amount plus the personal exemption amount

Question 5

The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount of qualified expenses.

Accepted Answer

A) True 
 B)False

Question 6

The AMT exemption amount is phased-out for high income taxpayers.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following items is not added back to regular taxable income in computing alternative minimum taxable income?

Accepted Answer

A) Home mortgage interest expense. 
B) Real property taxes. 
C) Tax-exempt interest from a private activity bond issued in 2007. 
D) State income taxes. 
A) Home mortgage interest expense. 
B) Real property taxes. 
C) Tax-exempt interest from a private activity bond issued in 2007. 
D) State income taxes.

Question 8

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Accepted Answer

A) An extension of time to file the tax return protects a taxpayer from late payment penalties as long as the tax is paid by the extended due date of the return. 
B) The penalty rate for late filing penalties is less than the penalty rate for late payment penalties. 
C) If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return,the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself. 
D) None of the choices are correct. 
A) An extension of time to file the tax return protects a taxpayer from late payment penalties as long as the tax is paid by the extended due date of the return. 
B) The penalty rate for late filing penalties is less than the penalty rate for late payment penalties. 
C) If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return,the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself. 
D) None of the choices are correct.

Question 9

Employees must pay both Social Security tax and Medicare tax on the full amount of their wages no matter the amount of their wages.

Accepted Answer

A) True 
 B)False

Question 10

Clarissa's gross tax liability for 2018 is $1,300.She has a $1,500 nonrefundable personal tax credit,a $750 business tax credit,and a $400 refundable personal tax credit.Her employer withheld $1,000 from her pay for taxes.What is her net tax due or refund for this year?

Accepted Answer

Refund of $1,400. Answer computed as fol

Question 11

Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work.His AGI for the year was $37,500 (all earned income).What is the amount of his child and dependent care credit?

Accepted Answer

$690 Answe

Question 12

Katlyn reported $300 of net income from her sole proprietorship.She is not required to pay self-employment tax.

Accepted Answer

A) True 
 B)False

Question 13

Sheryl's AGI is $250,000.Her current tax liability is $52,068.Last year,her tax liability was $48,722.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) $46,861 
B) $48,722 
C) $51,547 
D) $53,594 
A) $46,861 
B) $48,722 
C) $51,547 
D) $53,594

Question 14

For married couples,the additional Medicare tax is based on the couple's combined wages.

Accepted Answer

A) True 
 B)False

Question 15

The amount of expenditures eligible for the child and dependent care credit is the least of three amounts.Which of the following is not one of those amounts?

Accepted Answer

A) The total amount of child and dependent care expenditures for the year. 
B) $3,000 for one qualifying person or $6,000 for two or more qualifying persons. 
C) The dependent's earned income for the year. 
D) The taxpayer's earned income for the year. 
A) The total amount of child and dependent care expenditures for the year. 
B) $3,000 for one qualifying person or $6,000 for two or more qualifying persons. 
C) The dependent's earned income for the year. 
D) The taxpayer's earned income for the year.

Question 16

What happens if the taxpayer owes an underpayment penalty,but does not compute it on Form 2210?

Accepted Answer

A) Nothing,unless the taxpayer is audited. 
B) The taxpayer is immediately sent to the Tax Court. 
C) The IRS will compute and assess the penalty. 
D) The penalty is increased by five percentage points. 
A) Nothing,unless the taxpayer is audited. 
B) The taxpayer is immediately sent to the Tax Court. 
C) The IRS will compute and assess the penalty. 
D) The penalty is increased by five percentage points.

Question 17

Jackson earned a salary of $254,000 in 2018.What amount of FICA taxes should Jackson's employer withhold from his paycheck?

Accepted Answer

$12,130. A

Question 18

Cassy reports a gross tax liability of $1,000.She also claims $400 of nonrefundable personal credits,$700 of refundable personal credits,and $200 of business credits.What is Cassy's tax refund or tax liability due after applying the credits?

Accepted Answer

A) $1,000 taxes payable. 
B) $0 refund or taxes payable. 
C) $700 refund. 
D) $300 refund. 
A) $1,000 taxes payable. 
B) $0 refund or taxes payable. 
C) $700 refund. 
D) $300 refund.

Question 19

Which of the following statements concerning tax credits is true?

Accepted Answer

A) The tax benefit a taxpayer receives from a credit depends on the taxpayer's marginal tax rate. 
B) Refundable tax credits are limited to a taxpayer's gross tax liability. 
C) Tax credits are generally more beneficial than tax deductions. 
D) None of the these is a true statement. 
A) The tax benefit a taxpayer receives from a credit depends on the taxpayer's marginal tax rate. 
B) Refundable tax credits are limited to a taxpayer's gross tax liability. 
C) Tax credits are generally more beneficial than tax deductions. 
D) None of the these is a true statement.

Question 20

Allen Green is a single taxpayer with an AGI (and modified AGI)of $210,000,which includes $170,000 of salary,$25,000 of interest income,$10,000 of dividends,and $5,000 of long-term capital gains.What is Allen's net investment income tax liability this year,rounded to the nearest whole dollar amount?

Accepted Answer

A) $2,465 
B) $1,520 
C) $570 
D) $380 
A) $2,465 
B) $1,520 
C) $570 
D) $380

Which of the following represents the correct order in which credits are applied to gross tax liability (from first to last)?

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Hera earned $175,000 salary in 2018.Her husband,Zeus,earned $100,000 salary in 2018.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2018?

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold.This threshold is generally the ________.

The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount of qualified expenses.

The AMT exemption amount is phased-out for high income taxpayers.

Which of the following items is not added back to regular taxable income in computing alternative minimum taxable income?

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Employees must pay both Social Security tax and Medicare tax on the full amount of their wages no matter the amount of their wages.

Clarissa's gross tax liability for 2018 is $1,300.She has a $1,500 nonrefundable personal tax credit,a $750 business tax credit,and a $400 refundable personal tax credit.Her employer withheld $1,000 from her pay for taxes.What is her net tax due or refund for this year?

Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work.His AGI for the year was $37,500 (all earned income).What is the amount of his child and dependent care credit?

Katlyn reported $300 of net income from her sole proprietorship.She is not required to pay self-employment tax.

Sheryl's AGI is $250,000.Her current tax liability is $52,068.Last year,her tax liability was $48,722.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)?

For married couples,the additional Medicare tax is based on the couple's combined wages.

The amount of expenditures eligible for the child and dependent care credit is the least of three amounts.Which of the following is not one of those amounts?

What happens if the taxpayer owes an underpayment penalty,but does not compute it on Form 2210?

Jackson earned a salary of $254,000 in 2018.What amount of FICA taxes should Jackson's employer withhold from his paycheck?

Cassy reports a gross tax liability of $1,000.She also claims $400 of nonrefundable personal credits,$700 of refundable personal credits,and $200 of business credits.What is Cassy's tax refund or tax liability due after applying the credits?

Which of the following statements concerning tax credits is true?

Allen Green is a single taxpayer with an AGI (and modified AGI)of $210,000,which includes $170,000 of salary,$25,000 of interest income,$10,000 of dividends,and $5,000 of long-term capital gains.What is Allen's net investment income tax liability this year,rounded to the nearest whole dollar amount?

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

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Exam 7: Individual Income Tax Computation and Tax Credits

Which of the following represents the correct order in which credits are applied to gross tax liability (from first to last)?

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Hera earned $175,000 salary in 2018.Her husband,Zeus,earned $100,000 salary in 2018.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2018?

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold.This threshold is generally the ________.

The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount of qualified expenses.

The AMT exemption amount is phased-out for high income taxpayers.

Which of the following items is not added back to regular taxable income in computing alternative minimum taxable income?

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Employees must pay both Social Security tax and Medicare tax on the full amount of their wages no matter the amount of their wages.

Clarissa's gross tax liability for 2018 is $1,300.She has a $1,500 nonrefundable personal tax credit,a $750 business tax credit,and a $400 refundable personal tax credit.Her employer withheld $1,000 from her pay for taxes.What is her net tax due or refund for this year?

Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work.His AGI for the year was $37,500 (all earned income).What is the amount of his child and dependent care credit?

Katlyn reported $300 of net income from her sole proprietorship.She is not required to pay self-employment tax.

Sheryl's AGI is $250,000.Her current tax liability is $52,068.Last year,her tax liability was $48,722.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)?

For married couples,the additional Medicare tax is based on the couple's combined wages.

The amount of expenditures eligible for the child and dependent care credit is the least of three amounts.Which of the following is not one of those amounts?

What happens if the taxpayer owes an underpayment penalty,but does not compute it on Form 2210?

Jackson earned a salary of $254,000 in 2018.What amount of FICA taxes should Jackson's employer withhold from his paycheck?

Cassy reports a gross tax liability of $1,000.She also claims $400 of nonrefundable personal credits,$700 of refundable personal credits,and $200 of business credits.What is Cassy's tax refund or tax liability due after applying the credits?

Which of the following statements concerning tax credits is true?

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