Question 1

Which of the following statements regarding adoption credits is true?

Accepted Answer

A)  The maximum credit allowed per adopted child is $16,000. 
B)  Qualified expenses may include reimbursements from employer programs. 
C)  Adoption of foreign children does not qualify for the credit. 
D) The adoption credit may be limited if AGI amounts exceed certain levels. 
A)  The maximum credit allowed per adopted child is $16,000. 
B)  Qualified expenses may include reimbursements from employer programs. 
C)  Adoption of foreign children does not qualify for the credit. 
D) The adoption credit may be limited if AGI amounts exceed certain levels.

Question 2

A qualifying individual for purposes of the credit for child and dependent care expenses includes a dependent or a spouse of the taxpayer who is incapable of caring for himself or herself.

Accepted Answer

A) True 
 B)False

Question 3

The foreign tax credit is available only to individuals born in a foreign country.

Accepted Answer

A) True 
 B)False

Question 4

The maximum contribution amount for the retirement savings contributions credit for each tax year is 20% of a taxpayer's AGI.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A)  Qualified expenses do not include employer reimbursements. 
B)  An eligible child may be up to the age of 18. 
C)  The credit may be claimed regardless of the taxpayer's modified AGI amounts. 
D) Qualified expenses include adoption fees, attorney fees and court costs. 
A)  Qualified expenses do not include employer reimbursements. 
B)  An eligible child may be up to the age of 18. 
C)  The credit may be claimed regardless of the taxpayer's modified AGI amounts. 
D) Qualified expenses include adoption fees, attorney fees and court costs.

Question 6

Briefly explain how to calculate the child and dependent care credit and how the calculation for the credit is affected if the taxpayer's spouse does not work but is a full-time student instead.

Accepted Answer

The credit is based on a percentage, det

Question 7

A qualifying child for the child tax credit must be a dependent and under the age of 14.

Accepted Answer

A) True 
 B)False

Question 8

Arin and Bo have $74,000 total taxable income, which includes $13,500 of taxable income from France. They paid $1,600 in foreign income taxes, and their U.S. tax liability is $17,610. Arin and Bo's foreign tax credit is:

Accepted Answer

A)  $0. 
B)  $600. 
C)  $1,600. 
D) $3,213. 
A)  $0. 
B)  $600. 
C)  $1,600. 
D) $3,213.

Question 9

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?

Accepted Answer

A)  $600. 
B)  $900. 
C)  $1,000. 
D) $1,200. 
A)  $600. 
B)  $900. 
C)  $1,000. 
D) $1,200.

Question 10

Molly is single with AGI of $22,500. During the year, she contributed $900 to an IRA. What amount of retirement savings contributions credit can Molly claim?

Accepted Answer

A)  $0. 
B)  $90. 
C)  $180. 
D) $900. 
A)  $0. 
B)  $90. 
C)  $180. 
D) $900.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)  If a dependent pays for qualified expenses, the expenses are deemed paid by the taxpayer. 
B)  If a relative makes payments for qualified expenses directly to the institution on behalf of the student, the expenses are deemed paid by the student. 
C)  If a student receives a scholarship that is excluded from gross income, that amount should reduce qualified expenses. 
D) Payments made using borrowed funds are not considered qualified expenses. 
A)  If a dependent pays for qualified expenses, the expenses are deemed paid by the taxpayer. 
B)  If a relative makes payments for qualified expenses directly to the institution on behalf of the student, the expenses are deemed paid by the student. 
C)  If a student receives a scholarship that is excluded from gross income, that amount should reduce qualified expenses. 
D) Payments made using borrowed funds are not considered qualified expenses.

Question 13

Sam is a single father with two dependent twin daughters, Amy and Amanda, ages 4. He has AGI of $31,000 and paid $5,300 to a qualified day care center. What amount of credit can Sam receive for child and dependent care credit?

Accepted Answer

A)  $1,060. 
B)  $1,431. 
C)  $3,000. 
D) $5,300. 
A)  $1,060. 
B)  $1,431. 
C)  $3,000. 
D) $5,300.

Question 14

There are two types of education credits available, American opportunity tax credit and lifetime learning credit.

Accepted Answer

A) True 
 B)False

Question 15

George is a single father who has 2 qualifying children. His AGI is $25,000. How much is his EIC (use the EIC formula)? (Round your answer to the nearest dollar.)

Accepted Answer

A)  $3,359. 
B)  $4,097. 
C)  $5,259. 
D) $5,548. 
A)  $3,359. 
B)  $4,097. 
C)  $5,259. 
D) $5,548.

Question 16

A taxpayer can receive both American opportunity tax and lifetime learning credits for the same education expenses in the same tax year.

Accepted Answer

A) True 
 B)False

Question 17

The earned income credit (EIC) is a nonrefundable credit.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A)  The American opportunity tax credit is only available for the first two years of postsecondary education. 
B)  The lifetime learning credit is limited to $2,000 per taxpayer per year. 
C)  The American opportunity tax credit is limited to $2,500 per student per year. 
D) A taxpayer cannot receive the American opportunity tax credit if he/she has a felony drug conviction. 
A)  The American opportunity tax credit is only available for the first two years of postsecondary education. 
B)  The lifetime learning credit is limited to $2,000 per taxpayer per year. 
C)  The American opportunity tax credit is limited to $2,500 per student per year. 
D) A taxpayer cannot receive the American opportunity tax credit if he/she has a felony drug conviction.

Question 19

The maximum amount of earned income credit for a joint taxpayer with one child in 2015 is $3,359.

Accepted Answer

A) True 
 B)False

Question 20

Kobe is a single dad with two dependent children, Lizzie, age 7 and Leslie, age 3. He has AGI of $51,000 and paid $6,300 to a qualified day care center. What amount of credit can Kobe receive for the child and dependent care credit?

Accepted Answer

A)  $600. 
B)  $1,200. 
C)  $1,260. 
D) $6,300. 
A)  $600. 
B)  $1,200. 
C)  $1,260. 
D) $6,300.

Which of the following statements regarding adoption credits is true?

A qualifying individual for purposes of the credit for child and dependent care expenses includes a dependent or a spouse of the taxpayer who is incapable of caring for himself or herself.

The foreign tax credit is available only to individuals born in a foreign country.

The maximum contribution amount for the retirement savings contributions credit for each tax year is 20% of a taxpayer's AGI.

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

Briefly explain how to calculate the child and dependent care credit and how the calculation for the credit is affected if the taxpayer's spouse does not work but is a full-time student instead.

A qualifying child for the child tax credit must be a dependent and under the age of 14.

Arin and Bo have $74,000 total taxable income, which includes $13,500 of taxable income from France. They paid $1,600 in foreign income taxes, and their U.S. tax liability is $17,610. Arin and Bo's foreign tax credit is:

Molly is single with AGI of $22,500. During the year, she contributed $900 to an IRA. What amount of retirement savings contributions credit can Molly claim?

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 not true regarding the education credits?

Sam is a single father with two dependent twin daughters, Amy and Amanda, ages 4. He has AGI of $31,000 and paid $5,300 to a qualified day care center. What amount of credit can Sam receive for child and dependent care credit?

There are two types of education credits available, American opportunity tax credit and lifetime learning credit.

George is a single father who has 2 qualifying children. His AGI is $25,000. How much is his EIC (use the EIC formula)? (Round your answer to the nearest dollar.)

A taxpayer can receive both American opportunity tax and lifetime learning credits for the same education expenses in the same tax year.

The earned income credit (EIC) is a nonrefundable credit.

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

The maximum amount of earned income credit for a joint taxpayer with one child in 2015 is $3,359.

Kobe is a single dad with two dependent children, Lizzie, age 7 and Leslie, age 3. He has AGI of $51,000 and paid $6,300 to a qualified day care center. What amount of credit can Kobe receive for the child and dependent care credit?

Introduction to Taxation, the Income Tax Formula, and Form 1040ez

Expanded Tax Formula, Forms 1040a and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income

Capital Gains and Other Sales of Property

Rental Property, Royalties, Income From Flow-Through Entities

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities:

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters

Exam 9: Tax Credits

Which of the following statements regarding adoption credits is true?

A qualifying individual for purposes of the credit for child and dependent care expenses includes a dependent or a spouse of the taxpayer who is incapable of caring for himself or herself.

The foreign tax credit is available only to individuals born in a foreign country.

The maximum contribution amount for the retirement savings contributions credit for each tax year is 20% of a taxpayer's AGI.

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

Briefly explain how to calculate the child and dependent care credit and how the calculation for the credit is affected if the taxpayer's spouse does not work but is a full-time student instead.

A qualifying child for the child tax credit must be a dependent and under the age of 14.

Arin and Bo have $74,000 total taxable income, which includes $13,500 of taxable income from France. They paid $1,600 in foreign income taxes, and their U.S. tax liability is $17,610. Arin and Bo's foreign tax credit is:

Molly is single with AGI of $22,500. During the year, she contributed $900 to an IRA. What amount of retirement savings contributions credit can Molly claim?

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 not true regarding the education credits?

Sam is a single father with two dependent twin daughters, Amy and Amanda, ages 4. He has AGI of $31,000 and paid $5,300 to a qualified day care center. What amount of credit can Sam receive for child and dependent care credit?

There are two types of education credits available, American opportunity tax credit and lifetime learning credit.

George is a single father who has 2 qualifying children. His AGI is $25,000. How much is his EIC (use the EIC formula)? (Round your answer to the nearest dollar.)

A taxpayer can receive both American opportunity tax and lifetime learning credits for the same education expenses in the same tax year.

The earned income credit (EIC) is a nonrefundable credit.

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

The maximum amount of earned income credit for a joint taxpayer with one child in 2015 is $3,359.

Kobe is a single dad with two dependent children, Lizzie, age 7 and Leslie, age 3. He has AGI of $51,000 and paid $6,300 to a qualified day care center. What amount of credit can Kobe receive for the child and dependent care credit?

Introduction to Taxation, the Income Tax Formula, and Form 1040ez

Expanded Tax Formula, Forms 1040a and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income

Capital Gains and Other Sales of Property

Rental Property, Royalties, Income From Flow-Through Entities

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities:

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters