Looking at the following partial calendar for April, when will individual tax returns be due? \[\begin{array} { |ccccccccccccccccccccccccccccccccccc|} \hline &&&&&&&&&&&&&&&{ \text { April } } &&&&&&&&&&&&&&&&&&& \end{array}\] \[\begin{array} { | r | r | r | r | r | r | r | } \hline \text { Sunday } & \text { Monday } & \text { Tuesday } & \text { Wednesday } & \text { Thursday } & \text { Friday } & \text { Saturday } \\ \hline & & & & & & 1 \\ \hline 2 & 3 & 4 & 5 & 6 & 7 & 8 \\ \hline 9 & 10 & 11 & 12 & 13 & 14 & 15 \\ \hline 16 & \begin{array} { r } 17 \\ \text { National } \\ \text { Accountants } \\ \text { Day }\\ \text { (Fedral }\\ \text { Holiday) }\\ \end{array} & 18 & 19 & 20 & 21 & 22 \\ \hline \end{array}\]

A) Friday, April 14 B) Saturday, April 15 C) Sunday, April 16 D) Monday, April 17 E) Tuesday, April 18 A) Friday, April 14 B) Saturday, April 15 C) Sunday, April 16 D) Monday, April 17 E) Tuesday, April 18

Lexa worked as an employee during the first half of the year earning $65,000 of salary. Lexa's employer withheld $4,030 of Social Security tax and $943 of Medicare tax. In the second half of the year, she was self-employed and she reported $180,000 of self-employment income on her ScheduleC. What amount of self-employment taxes is Lexa required to pay? $11,549. $\begin{array}{c} \begin{array}{|l|} \hline Description\\ \hline \text{(1) Social Security wage base limit less}\\ \text{employec compensation subject to}\\ \text{Social Security tax}\\ \hline \text{(2) Net eamings from self-employment}\\ \hline \text{(3) Social Security portion of}\\ \text{selfemployment tax}\\ \hline \text{(4) Employer portion of Medicare tax on}\\ \text{the self-employment income}\\ \hline \text{(5) Sum of taxpayer's compensation and net}\\ \text{earnings from self-employment}\\ \hline \text{(6) Lesser of [Step (5) amount or \$ 200,000]}\\ \text{x 1.45 \%}\\ \hline \text{(7) Greater of [(a) zero or (b) the amount}\\ \text{from Step (5) minus \$ 200,000] x 2.35 \%}\\ \hline \text{(8) Steps \( (6)+(7) $ - Medieare taxes}\\ \text{withheld by Lexa's employer. This is}\\ \text{the employee pertion of Medicare tax}\\ \text{on the self-employment income.}\\ \hline \text{(9) Steps (3)+(4)+(8)}\\ \hline \end{array} \begin{array}{r} \hline Amount\\ \hline \$ 52,000 \\\\\\ \hline 166,230 \\ \hline 6,448 \\\\ \hline 2,410 \\\\ \hline 231,230 \\\\ \hline 2,900 \\\\ \hline 734 \\\\ \hline 2,691 \\\\\\\\ \hline11,549\\ \hline \end{array} \begin{array}{|l|} \hline Explanation\\ \hline\$ 117,000-\$ 65,000 , \text{limited to} \$ 0\\\\\\ \hline\$ 180,000 x 92.35 \% \\ \hline \text{Lesser of [ Step (1) or (2)]} x 12.4 \% \\\\ \hline S tep (2) x 1.45 \% \\\\ \hline\$ 65,000+ Step (2) \\\\ \hline 200,000 x1.45 \% \\\\ \hline31,230 x 2.35 \% \\\\ \hline 2,900+734-943 \\\\\\\\ \hline\\ \hline \end{array} \end{array}\)

The answer of Lexa worked as an employee during the...

Exam 7: Individual Income Tax Computation and Tax Credits

Apollo is single and his AMT base is $100,250. This amount includes $500 of qualified dividends (the dividends were taxed at 15% in determining the regular tax liability). What is Apollo's tentative minimum tax?

(Short Answer)

4.8/5

(76)

Question 21

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?

(Multiple Choice)

4.9/5

(89)

Question 22

Which of the following statement(s) concerning estimated tax payments and underpayment penalties for individuals is (are) true?

(Multiple Choice)

4.9/5

(88)

Question 23

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

(Multiple Choice)

4.8/5

(79)

Question 24

Jackson earned a salary of $254,000 in 2014. What amount of FICA taxes should Jackson's employer withhold from his paycheck?

(Short Answer)

4.8/5

(87)

Question 25

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

(True/False)

4.9/5

(97)

Question 26

Hestia (age 17) is claimed as a dependent by her parents, Rhea and Chronus. In 2014, Hestia received $1,000 of interest income from a corporate bond that she owns. In addition, she has earned income of $200. What is her taxable income for 2014?

(Multiple Choice)

4.9/5

(70)

Question 27

In 2014, Athena reported $37,500 of taxable income. Of this, $32,500 came from her work at the local library and the remaining $5,000 was from capital gains to be taxed at preferential rates. Compute her tax liability for 2014 as a single taxpayer.

(Short Answer)

4.9/5

(72)

Question 28

For alternative minimum tax purposes, taxpayers are required to add back the regular tax standard deduction amount for their filing status whether or not they itemized deductions for regular tax purposes.

(True/False)

5.0/5

(85)

Question 29

Looking at the following partial calendar for April, when will individual tax returns be due? April Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 National Accountants Day (Fedral Holiday) 18 19 20 21 22

(Multiple Choice)

4.8/5

(82)

Question 30

Costa is a single taxpayer. His regular tax liability was $38,000. For 2014, he reported $190,000 of alternative minimum taxable income. What is his alternative minimum tax? [Use 2014 AMT Exemption amount]

(Short Answer)

4.8/5

(90)

Question 31

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?

(Short Answer)

4.9/5

(73)

Question 32

Clarissa's gross tax liability for 2014 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?

(Short Answer)

4.9/5

(87)

Question 33

Long-term capital gains are taxed at the stated AMT rate for purposes of the alternative minimum tax.

(True/False)

4.8/5

(87)

Question 34

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

(True/False)

4.9/5

(62)

Question 35

Angelena files as a head of household. In 2014, she reported $50,000 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability, rounded to the nearest whole dollar amount (use the tax rate schedules)?

(Multiple Choice)

4.8/5

(77)

Question 36

The American opportunity credit and lifetime learning credit are available to all taxpayers regardless of their income level.

(True/False)

4.8/5

(86)

Question 37

Lexa worked as an employee during the first half of the year earning $65,000 of salary. Lexa's employer withheld $4,030 of Social Security tax and $943 of Medicare tax. In the second half of the year, she was self-employed and she reported $180,000 of self-employment income on her ScheduleC. What amount of self-employment taxes is Lexa required to pay? $11,549. Description (1) Social Security wage base limit less employec compensation subject to Social Security tax (2) Net eamings from self-employment (3) Social Security portion of selfemployment tax (4) Employer portion of Medicare tax on the self-employment income (5) Sum of taxpayer's compensation and net earnings from self-employment (6) Lesser of [Step (5) amount or \ 200,000] x 1.45 \% (7) Greater of [(a) zero or (b) the amount from Step (5) minus \ 200,000] x 2.35 \% (8) Steps (6)+(7) - Medieare taxes withheld by Lexa's employer. This is the employee pertion of Medicare tax on the self-employment income. (9) Steps (3)+(4)+(8) Amount \ 52,000 166,230 6,448 2,410 231,230 2,900 734 2,691 11,549 Explanation \ 117,000-\ 65,000, limited to \ 0 \ 180,000x92.35\% Lesser of [ Step (1) or (2)] x12.4\% Step(2)x1.45\% \ 65,000+Step(2) 200,000x1.45\% 31,230x2.35\% 2,900+734-943

(Short Answer)

4.9/5

(85)

Question 38

How could an individual obtain a business tax credit?

(Multiple Choice)

4.7/5

(85)

Question 39

Which of the following statements regarding FICA taxes is true?

(Multiple Choice)

4.9/5

(81)

Question 40

Apollo is single and his AMT base is $100,250. This amount includes $500 of qualified dividends (the dividends were taxed at 15% in determining the regular tax liability). What is Apollo's tentative minimum tax?

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?

Which of the following statement(s) concerning estimated tax payments and underpayment penalties for individuals is (are) true?

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

Jackson earned a salary of $254,000 in 2014. What amount of FICA taxes should Jackson's employer withhold from his paycheck?

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

Hestia (age 17) is claimed as a dependent by her parents, Rhea and Chronus. In 2014, Hestia received $1,000 of interest income from a corporate bond that she owns. In addition, she has earned income of $200. What is her taxable income for 2014?

In 2014, Athena reported $37,500 of taxable income. Of this, $32,500 came from her work at the local library and the remaining $5,000 was from capital gains to be taxed at preferential rates. Compute her tax liability for 2014 as a single taxpayer.

For alternative minimum tax purposes, taxpayers are required to add back the regular tax standard deduction amount for their filing status whether or not they itemized deductions for regular tax purposes.

Looking at the following partial calendar for April, when will individual tax returns be due? April Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 National Accountants Day (Fedral Holiday) 18 19 20 21 22

Costa is a single taxpayer. His regular tax liability was $38,000. For 2014, he reported $190,000 of alternative minimum taxable income. What is his alternative minimum tax? [Use 2014 AMT Exemption amount]

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?

Clarissa's gross tax liability for 2014 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?

Long-term capital gains are taxed at the stated AMT rate for purposes of the alternative minimum tax.

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

Angelena files as a head of household. In 2014, she reported $50,000 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability, rounded to the nearest whole dollar amount (use the tax rate schedules)?

The American opportunity credit and lifetime learning credit are available to all taxpayers regardless of their income level.

How could an individual obtain a business tax credit?

Which of the following statements regarding FICA taxes is true?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Filters