Exam 9: Tax Credits Form 1040, lines 46 Through 54 and Lines 66a Through 73

The maximum amount per year of dependent care expenses that can be used for calculating the credit for child and dependent care expenses is $6,000 for two or more qualifying individuals.

There are two types of education credits available,the American opportunity tax credit also known as the Hope scholarship credit)and the lifetime learning credit.

Sean and Jenny are married,file a joint return and have two dependent children,Blake,age 9 and Jake,age 5.Sean has earned income of $72,000.Jenny was a full-time student for nine months)with no income.They paid a qualified day care center $7,000.What amount of child and dependent care credit can Sean and Jenny receive?

Rolando and Silvia have modified AGI of $230,000.They adopted a boy from Guatemala,whose adoption became final in the current year.They incurred a total of $15,000 in qualified adoption expenses.What is the amount of adoption credit they can claim in the current year?

A taxpayer may become ineligible for earned income credit if he/she has excessive disqualified income such as dividends or interest.

Which of the following statements is correct?

Juan paid $1,750 in qualifying expenses for his daughter who attended a community college.How much is Juan's lifetime learning credit without regard to AGI limitations or other credits?

The child tax credit is reduced if AGI exceeds $110,000 for married filing joint taxpayers.

The calculation for the credit for the elderly or disabled requires that the appropriate base amount be adjusted by two items.What are those two items and how is the base amount adjusted?

Waseem has $103,000 total taxable income,which includes $11,000 of taxable income from India.He paid $4,000 in foreign income taxes and his U.S.tax liability is $21,610.Waseem's foreign tax credit is: Do not round interim calculations)

Vincent and Maria,whose modified AGI is $164,000,adopted a little girl from Mexico which was finalized in 2016.They incurred a total of $16,000 in qualified adoption expenses.What is the amount of adoption credit they can claim in 2016?

The maximum adoption credit is 50% of all qualified expenses.

Which of the following statements regarding adoption credits is not true?

The amount of foreign tax credit is equal to the amount paid to the foreign government but cannot exceed that portion of U.S.income tax attributable to the foreign income.

The maximum American opportunity tax credit is $2,500 per student per year.

Discuss the limitations of the lifetime learning credit.Briefly explain how AGI affects the amount of credit available.

Qualifying expenses for the American opportunity tax and lifetime learning credits include room and board.

Which of the following statements is not true regarding the credit for the elderly or the disabled?

A student can only receive the lifetime learning credit if he/she is enrolled in a degree program.

Kyle and Alyssa paid $1,000 and $2,000 in qualifying expenses for their two daughters Jane and Jill,respectively,to attend the University of California.Jane is a sophomore and Jill is a freshman.Kyle and Alyssa's AGI is $135,000 and they file a joint return.What is their allowable American opportunity tax credit after the credit phase-out based on AGI is taken into account?