Exam 12: Tax Credits and Payments

A small employer incurs $1,500 for consulting fees related to establishing a qualified retirement plan for its 75 employees.As a result,the employer may claim the credit for small employer pension plan startup costs for $750.

Expenses that are reimbursed by a taxpayer's employer under a dependent care assistance program can also qualify for the credit for child and dependent care expenses.

The ceiling amounts and percentages for 2015 for the two portions of the self-employment tax are: ​ Social Security portion Medicare portion

Jack and Jill are married,have three children,and have earnings during 2015 of $28,500.Do they qualify for the earned income credit? If so,calculate the amount of credit that is available to them.

Which of the following statements is true regarding the education tax credits?

The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.

If an employee holds two jobs during the year,an overwithholding of FICA tax will result.

Cardinal Company incurs $800,000 during the year to construct a facility that will be used exclusively for the care of its employees' pre-school age children during normal working hours.Assuming Cardinal claims the credit for employer-provided child care this year,its basis in the newly constructed facility is $640,000.

How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?

The credit for child and dependent care expenses is an example of a refundable credit.

The low-income housing credit is available to low-income tenants who reside in qualifying low-income housing.

Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits.

Jermaine and Kesha are married,file a joint tax return,have AGI of $82,500,and have two children.Devona is beginning her freshman year at State University during Fall 2015,and Arethia is beginning her senior year at Northeast University during Fall 2015 after having completed her junior year during the spring of that year.Both Devona and Arethia are claimed as dependents on their parents' tax return.Devona's qualifying tuition expenses and fees total $4,000 for the fall semester,while Arethia's qualifying tuition expenses and fees total $6,200 for each semester during 2015.Full payment is made for the tuition and related expenses for both children during each semester.The American Opportunity credit available to Jermaine and Kesha for 2015 is:

The earned income credit is available only if the taxpayer has at least one qualifying child in the household.

Both education tax credits are available for qualified tuition expenses,and in certain instances,also may be available for room and board.

An employer calculates the amount of income tax withheld from salary or wages based on the information an employee provides on the following form:

Only married taxpayers with children are qualified to receive the earned income credit.

Which of the following statements regarding the adoption expenses credit is not true?

Which,if any,of the following correctly describes the earned income credit?

Several years ago,Sarah purchased a structure for $150,000 that was originally placed in service in 1929.In the current year,she incurred qualifying rehabilitation expenditures of $200,000.The amount of the tax credit for rehabilitation expenditures,and the amount by which the building's basis for cost recovery would increase as a result of the rehabilitation expenditures are the following amounts: