Exam 6: Credits and Special Taxes

Fletch and Cammie Gates are married with three dependent children and household income of $51,138 in 2016. The Gates purchased health care insurance on their state's exchange for total premiums of $6,800. A designated silver plan for their family in their state costs $9,700. Calculate the Gates' premium tax credit.​

Marion has an 11-year-old daughter. Please calculate her child and dependent care credit under these two alternatives: ​ a.Marion pays $4,000 a year in day care costs.Her salary is $32,000. b.Marion pays $8,000 a year in day care costs.Her salary is $80,000.

The earned income credit:

Taxpayer Q has net taxable income of $30,000 from Country Y which imposes a 40 percent income tax. In addition to the income from Country Y, taxpayer Q has net taxable income from U.S. sources of $120,000, and U.S. tax liability, before the foreign tax credit, of $41,750. What is the amount of Q's foreign tax credit?

In 2016, the child tax credit available to married taxpayers filing jointly is phased out, beginning at:

In 2016, Alex has income from wages of $16,000, adjusted gross income of $18,000, and tax liability of $300 before the earned income credit. What is the amount of Alex's earned income credit for 2016, assuming he is single and his 5-year-old dependent son lives with him for the full year?

Which of the common deductions below are allowed for regular tax purposes but not for AMT purposes?

​Phillip and Naydeen Rivers are married with two dependent children. The family has household income of $38,800 in 2016. They paid $11,000 for health care for the year. A designated silver plan would have cost $9,800. What is the Rivers' premium tax credit?

What is the maximum investment income a taxpayer is allowed to have and still be allowed to claim the earned income credit? Why is there an earned income credit in the law?

Which of the following itemized deductions may not be deducted in computing the individual alternative minimum tax?

A taxpayer with earned income of $50,000 is not eligible to claim the credit for child and dependent care expenses.

Steve goes to Tri-State University and pays $40,000 in tuition. Steve works a part-time job to pay for his schooling and has an AGI of $17,000. How much is his American Opportunity tax credit?

​Which of the following is not an exemption from minimum essential coverage for health insurance:

Maxine is a 29-year-old single mother. Her tax liability before credits is $1,000 and her earned income credit is $2,500. How much earned income credit will be refunded to Maxine? Explain.

John and Susan file a joint income tax return for 2016. They have two dependent children, students, ages 19 and 20. John earns wages of $108,000 and they have interest income of $2,000. In 2016, they settle a state tax audit and pay $50,000 for back state taxes due to an overly aggressive tax-sheltered investment. Their other expenses for the year include: ​ a.Calculate John and Susan's 2016 regular tax and tentative minimum tax on the schedule provided.​ ​ b.How much is the total tax liability shown on John and Susan's 2016 Form 1040?

​Alice is a single taxpayer with no dependents that has AGI of $9,000 in 2016. Alice is required to carry minimum essential coverage in 2016.

The use of the earned income credit could result in a taxpayer receiving a refund even though he or she has not paid any income taxes.

Married taxpayers must generally file a joint tax return to claim the child and dependent care credit.

Which of the following tax credits is not available for the 2016 tax year?

The total expenses that can be taken as a credit for all tax years for adoption of a child without "special needs" is $10,000.