Exam 14: Special Tax Computation Methods, tax Credits, and Payment of Tax

Sam and Megan are married with two dependent children.Both Sam and Megan work,earning $50,000 and $55,000,respectively.Their AGI totals $110,000.They incur $6,500 of qualifying child care expenses of which $2,500 is reimbursed by Megan's dependent care program at work. What is the amount of their child and dependent care credit?

Tanya has earnings from self-employment of $240,000,resulting in self-employment tax of $22,200 and Additional Medicare Tax of $360.Due to these taxes,Tanya will be allowed a deduction for AGI of

Mortgage interest paid on a mortgage obtained to buy a principal residence,deductible for regular income tax purposes,is also an allowable deduction for AMT.

One-half of the self-employment tax imposed is allowed as a for AGI deduction.

Discuss the tax planning techniques available to a U.S.citizen who is on a foreign job assignment.

Tyne is single and has AGI of $25,000 in 2017.During the year,she contributes $3,000 to her Roth IRA.What is the amount of Tyne's qualified retirement savings contributions credit?

With respect to estimated tax payments for a taxpayer with AGI of $150,000 or lower in the prior year,all of the following are generally true with the exception of

A taxpayer acquired new equipment to be used in her business this year.For AMT purposes,depreciation must be recalculated using the straight-line method over the same recovery period used for regular tax purposes.

Which one of the following is a refundable credit?

For purposes of the AMT,the standard deduction,but not the personal and dependency exemptions,is allowed.

Amelida expects to earn $145,000 of AGI and $125,000 of taxable income this year.She is concerned about underpayment penalties.Because of a substantial bonus,her prior year AGI was $155,000 and her taxable income was $135,000.Based on her fact pattern,which of the following scenarios will not allow her to avoid underpayment penalties?

Burton and Kay are married,file a joint return with an AGI of $116,000,and have one dependent child,Tyler,who is a full-time student in a Master of Accountancy program.The following expenses relate to his costs of attendance in 2017: The tuition noted above is the gross amount charged before reduction for his $5,000 tuition scholarship.What is the maximum education credit allowed to Burton and Kay?

Harley's tentative minimum tax is computed by multiplying the AMT tax rates by her

Individuals without children are eligible for the earned income credit if they meet all the following conditions except

Current year foreign taxes paid exceed the ceiling based on U.S.tax attributable to foreign source income.These excess foreign tax credits

Assume a taxpayer projects that his total income tax for the year will $25,000.A taxpayer with savings should prefer to structure his tax prepayments so that he will receive a tax refund of $2,500 rather than a tax due of $2,500.

Sonya started a self-employed consulting business in the last part of the year and earned $40,000.She had been employed as manager in a consulting firm prior to starting her own business and had earned $135,000. (a) What is Sonya's self employment tax for 2016? (b) What is Sonya's deduction for AGI for the SE tax?

Self-employed individuals are subject to the self-employment tax if their net earnings are more than the personal exemption amount.

The maximum amount of the American Opportunity Tax Credit for each qualified student is

Which of the following statements is incorrect regarding qualifying criteria for the health insurance premium tax credit?