Question 1

Green Company, in the renovation of its building, incurs $9,000 of expenditures that qualify for the disabled access credit. The disabled access credit is:

Accepted Answer

A)  $8,750. 
B)  $4,500. 
C)  $4,375. 
D)  $4,250. 
A)  $8,750. 
B)  $4,500. 
C)  $4,375. 
D)  $4,250.

Question 2

The additional Medicare taxes assessed on high-income individuals carry differing tax rates depending on the tax base.

Accepted Answer

A) True 
 B)False

Question 3

Phil and Audrey, husband and wife, both are employed by Laurel Corporation. Phil earns $135,000 in salary in 2018, and Audrey earns $70,000. How much FICA tax must they pay for 2018?

Accepted Answer

Phil will pay $9,918.30[(6.2%

Question 4

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

Accepted Answer

A)  Would be available regardless of the amount of the taxpayer's adjusted gross income. 
B)  Not available to a surviving spouse. 
C)  A taxpayer must have a qualifying child to take advantage of the credit. 
D)  Is a refundable credit. 
A)  Would be available regardless of the amount of the taxpayer's adjusted gross income. 
B)  Not available to a surviving spouse. 
C)  A taxpayer must have a qualifying child to take advantage of the credit. 
D)  Is a refundable credit.

Question 5

The base amount for the Social Security portion (old age, survivors, and disability insurance) is different from that for the Medicare portion of FICA.

Accepted Answer

A) True 
 B)False

Question 6

Identify the statement below that is false.

Accepted Answer

A)  If an employer is not required to withhold income taxes from an employee's wages, the wages are not taxable to the employee. 
B)  In certain situations, income tax withholding by an employer is voluntary. 
C)  An employer must deposit with the government an amount of FICA tax that is twice the amount withheld from the employee's salary (i.e., the employee's and employer's shares). 
D)  If an excess amount of FICA has been withheld for an employee because the employee has multiple jobs, the employee may claim a credit for the excess amount withheld on his or her income tax return. 
E)  None of the above statements are false. 
A)  If an employer is not required to withhold income taxes from an employee's wages, the wages are not taxable to the employee. 
B)  In certain situations, income tax withholding by an employer is voluntary. 
C)  An employer must deposit with the government an amount of FICA tax that is twice the amount withheld from the employee's salary (i.e., the employee's and employer's shares). 
D)  If an excess amount of FICA has been withheld for an employee because the employee has multiple jobs, the employee may claim a credit for the excess amount withheld on his or her income tax return. 
E)  None of the above statements are false.

Question 7

An individual generally may claim a credit for adoption expenses in the year in which the expenses are paid.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Harry and Wilma are married and file a joint income tax return. On their tax return, they report $44,000 of adjusted gross income ($20,000 salary earned by Harry and $24,000 salary earned by Wilma) and claim two exemptions for their dependent children. During the year, they pay the following amounts to care for their 4-year old son and 6-year old daughter while they work.  
Harry and Wilma may claim a credit for child and dependent care expenses of:

Accepted Answer

A)  $840. 
B)  $1,040. 
C)  $1,200. 
D)  $1,240. 
E)  None of the above. 
A)  $840. 
B)  $1,040. 
C)  $1,200. 
D)  $1,240. 
E)  None of the above.

Question 10

Bradley has two college-age children, Clint, a freshman at State University, and Abigail, a junior at Northwest University. Both Clint and Abigail are full-time students. Clint's expenses during the 2018 fall semester are as follows: $2,400 tuition, $250 books and course materials, and $1,600 room and board. Abigail's expenses for the 2018 calendar year are as follows: $10,200 tuition, $1,200 books and course materials, and $3,600 room and board. Tuition and the applicable room and board costs are paid at the beginning of each semester.
Bradley is married, files a joint tax return, claims both children as dependents, and reports a combined AGI with his wife Allie of $114,000 for 2018. Determine Bradley's available education tax credit for 2018.

Accepted Answer

In 2018, both Clint and Abigail qualify

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Several years ago, Sarah purchased a certified historic structure for $150,000 that was 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.

Accepted Answer

A)  $20,000 credit, $180,000 basis. 
B)  $40,000 credit, $200,000 basis. 
C)  $40,000 credit, $350,000 basis. 
D)  $40,000 credit, $160,000 basis. 
A)  $20,000 credit, $180,000 basis. 
B)  $40,000 credit, $200,000 basis. 
C)  $40,000 credit, $350,000 basis. 
D)  $40,000 credit, $160,000 basis.

Question 13

Julia is 30 years old, unmarried with a 9 year-old daughter, and has earnings during 2018 of $19,700. Does she qualify for the earned income credit? If so, calculate the amount of credit that is available to her.

Accepted Answer

The answer of Julia is 30 years old, unmarried with...

Question 14

Explain the purpose of the disabled access credit and describe the general characteristics of its computation.

Accepted Answer

The disabled access credit is designed t

Question 15

For purposes of computing the credit for child and dependent care expenses, the qualifying employment-related expenses are limited to an individual's actual or deemed earned income.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following issues does not need resolution in an employer's effort to comply with employment tax payment requirements?

Accepted Answer

A)  Ascertaining which employees and wages are covered by employment taxes and are subject to withholding for income taxes. 
B)  Arriving at the amount to be paid and/or withheld. 
C)  Reporting and paying employment taxes and income taxes withheld to the IRS on a timely basis through the use of proper forms. 
D)  Each of the above issues needs to be resolved. 
E)  None of the above is relevant to the employer. 
A)  Ascertaining which employees and wages are covered by employment taxes and are subject to withholding for income taxes. 
B)  Arriving at the amount to be paid and/or withheld. 
C)  Reporting and paying employment taxes and income taxes withheld to the IRS on a timely basis through the use of proper forms. 
D)  Each of the above issues needs to be resolved. 
E)  None of the above is relevant to the employer.

Question 17

Qualified research and experimentation expenditures are not only eligible for the 20% tax credit, but also can be expensed in the year incurred.

Accepted Answer

A) True 
 B)False

Question 18

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.

Accepted Answer

A) True 
 B)False

Question 19

During the year, Green, Inc., incurs the following research expenditures:  
Green's qualifying research expenditures for the year are:

Accepted Answer

A)  $60,000. 
B)  $75,000. 
C)  $79,500. 
D)  $90,000. 
A)  $60,000. 
B)  $75,000. 
C)  $79,500. 
D)  $90,000.

Question 20

In May 2018, Blue Corporation hired Camilla, Jolene, and Tyrone, all of whom are certified as long-term family assistance recipients. Each employee is paid $12,000 during 2018.
a. Compute Blue Corporation's work opportunity tax credits for 2018.
b. Assume Blue Corporation pays total wages of $500,000 to its employees during 2018. How much may Blue Corporation claim as a wage deduction for 2018 if the work opportunity tax credit is claimed?

Accepted Answer

The answer of In May 2018, Blue Corporation hired Camilla,...

Exam 12: Tax Credits and Payments

Green Company, in the renovation of its building, incurs $9,000 of expenditures that qualify for the disabled access credit. The disabled access credit is:

The additional Medicare taxes assessed on high-income individuals carry differing tax rates depending on the tax base.

Phil and Audrey, husband and wife, both are employed by Laurel Corporation. Phil earns $135,000 in salary in 2018, and Audrey earns $70,000. How much FICA tax must they pay for 2018?

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

The base amount for the Social Security portion (old age, survivors, and disability insurance) is different from that for the Medicare portion of FICA.

Identify the statement below that is false.

An individual generally may claim a credit for adoption expenses in the year in which the expenses are paid.

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

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

Julia is 30 years old, unmarried with a 9 year-old daughter, and has earnings during 2018 of $19,700. Does she qualify for the earned income credit? If so, calculate the amount of credit that is available to her.

Explain the purpose of the disabled access credit and describe the general characteristics of its computation.

For purposes of computing the credit for child and dependent care expenses, the qualifying employment-related expenses are limited to an individual's actual or deemed earned income.

Which of the following issues does not need resolution in an employer's effort to comply with employment tax payment requirements?

Qualified research and experimentation expenditures are not only eligible for the 20% tax credit, but also can be expensed in the year incurred.

During the year, Green, Inc., incurs the following research expenditures: Green's qualifying research expenditures for the year are:

An Introduction to Taxation and Understanding the Federal Tax Law

Working with the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: In General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses, Section 1231, and Recapture Provisions

Taxing Business Income

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

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