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{employee compensation subject to}\\ \text{Social Security tax}\\\hline \text{(2) Net earnings from self-employment}\\\hline \text{(3) Social Security portion of}\\ \text{selfemployment tax}\\\hline \text{(4) Employer pertion 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 \$ t e p(5) minus \$ 200,000] x 2.35 \%}\\ \hline \text{(8) Steps \( (6)+(7) $ - Medieare taxes}\\ \text{withheld by Lexa's employer. This is the}\\ \text{employee portion of Medicare tax}\\ \text{on the self-employment income.}\\\hline \text{(9) Steps (3)+(4)+(8)}\\ \hline \end{array} \begin{array}{l|} \hline \text { Amount } \\\hline \$ 52,000 \\\\\\\hline {166,230}\\\hline {6,448} \\\\\hline 2,410 \\\\\hline 231,230 \\\\\hline 2,900 \\\\\hline 734 \\\\\hline 2,691 \\\\\\\\\hline 11,549 \\\hline \end{array} \begin{array}{l|} \hline Explanation\\\hline \text{\$ 117,000-\$ 65,000 , Firnited to \$ 0}\\\\\\ \hline \$ 180,000 \times 92.35 \% \\\hline \text{Lesser of [ Step (1) or (2)] x 12.4 \%} \\\\\hline Step (2) \times 1.45 \% \\\\\hline \$ 65,000+ Step (2) \\\\\hline 200,000 \times 1.45 \% \\\\\hline 31,230 \times 2.35 \% \\\\\hline 2,900+734-943 \\\\\\\\\hline \\\hline \end{array} \end{array}\)

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

Exam 7: Individual Income Tax Computation and Tax Credits

Atlas earned $17,300 from his sole proprietorship in 2014. This was his only source of income. How much in self-employment taxes will Atlas be able to deduct?

(Essay)

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Question 61

Jocelyn, a single taxpayer, had $742,000 of taxable income in 2014. All of the income is ordinary. What is her tax liability for the year?

(Essay)

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Question 62

Assume Georgianne underpaid her estimated tax liability by $150 in the first quarter, $500 in the second quarter, $400 in the third quarter, and $200 in the fourth quarter. Calculate her underpayment penalty for the year, assuming the federal short-term interest rate is five percent.

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Question 63

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 employee compensation subject to Social Security tax (2) Net earnings from self-employment (3) Social Security portion of selfemployment tax (4) Employer pertion 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 \ t e p(5) minus \ 200,000] x 2.35 \% (8) Steps (6)+(7) - Medieare taxes withheld by Lexa's employer. This is the employee portion 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 , Firnited to \ 0 \ 180,000\times92.35\% Lesser of [ Step (1) or (2)] x 12.4 \% Step(2)\times1.45\% \ 65,000+Step(2) 200,000\times1.45\% 31,230\times2.35\% 2,900+734-943

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Question 64

During 2014, Montoya (age 15) received $2,200 from a corporate bond. He also received $600 from a savings account established for him by his parents. Montoya lives with his parents and he is their dependent. What is Montoya's taxable income?

(Multiple Choice)

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Question 65

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

(Multiple Choice)

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Question 66

Alton reported net income from his sole proprietorship of $90,000. To determine his self employment tax, he would multiply $90,000 by the self-employment tax rate.

(True/False)

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Question 67

The taxable income levels in the married filing jointly tax rate schedule are _______ those in the married filing separately schedule.

(Multiple Choice)

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Question 68

Harrison received a qualified dividend. Without knowing any additional facts, which of the following statements is true regarding the rate at which the dividend will be taxed to Harrison?

(Multiple Choice)

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Question 69

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)

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Question 70

Which of the following statements accurately describes the alternative minimum tax rate(s)?

(Multiple Choice)

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Question 71

Which of the following statements regarding credits is correct?

(Multiple Choice)

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Question 72

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

(Multiple Choice)

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Question 73

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

(Multiple Choice)

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Question 74

Paul and Melissa plan on filing jointly in 2014. For the year, the couple reported taxable income of $130,000. What is their gross tax liability?

(Essay)

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Question 75

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

(True/False)

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Question 76

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]

(Essay)

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Question 77

Hera earned $175,000 salary in 2014. Her husband, Zeus, earned $100,000 salary in 2014. Hera and Zeus file a joint tax return. How much FICA taxes will they owe in 2014?

(Multiple Choice)

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Question 78

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

(True/False)

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Question 79

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

(True/False)

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Question 80

Showing 61 - 80 of 156

Exam 7: Individual Income Tax Computation and Tax Credits

Atlas earned $17,300 from his sole proprietorship in 2014. This was his only source of income. How much in self-employment taxes will Atlas be able to deduct?

Jocelyn, a single taxpayer, had $742,000 of taxable income in 2014. All of the income is ordinary. What is her tax liability for the year?

Assume Georgianne underpaid her estimated tax liability by $150 in the first quarter, $500 in the second quarter, $400 in the third quarter, and $200 in the fourth quarter. Calculate her underpayment penalty for the year, assuming the federal short-term interest rate is five percent.

During 2014, Montoya (age 15) received $2,200 from a corporate bond. He also received $600 from a savings account established for him by his parents. Montoya lives with his parents and he is their dependent. What is Montoya's taxable income?

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

Alton reported net income from his sole proprietorship of $90,000. To determine his self employment tax, he would multiply $90,000 by the self-employment tax rate.

The taxable income levels in the married filing jointly tax rate schedule are _______ those in the married filing separately schedule.

Harrison received a qualified dividend. Without knowing any additional facts, which of the following statements is true regarding the rate at which the dividend will be taxed to Harrison?

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?

Which of the following statements accurately describes the alternative minimum tax rate(s)?

Which of the following statements regarding credits is correct?

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

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

Paul and Melissa plan on filing jointly in 2014. For the year, the couple reported taxable income of $130,000. What is their gross tax liability?

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

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]

Hera earned $175,000 salary in 2014. Her husband, Zeus, earned $100,000 salary in 2014. Hera and Zeus file a joint tax return. How much FICA taxes will they owe in 2014?

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

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

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

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 of the Cfa Institute

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