Exam 8: Individual Income Tax Computation and Tax Credits

Cassy reports a gross tax liability of $1,000. She also claims $400 of nonrefundable personal credits, $700 of refundable personal credits, and $200 of business credits. What is Cassy's tax refund or tax liability due after applying the credits?

For married couples, the Social Security wage base limitation applies separately to each spouse.

Angelena files as a head of household. In 2016, she reported $51,000 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability, rounded to the nearest whole dollar amount? (use the tax rate schedules)

The alternative minimum tax is the AMT base multiplied by the AMT rate.

Which of the following is not true of the lifetime learning credit?

In 2016, Athena reported $38,650 of taxable income. Of this, $33,650 came from her work at the local library and the remaining $5,000 was from capital gains to be taxed at preferential rates. Compute her tax liability for 2016 as a single taxpayer.

If there is not enough gross tax liability to use the foreign tax credit, __________.

Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work. His AGI for the year was $37,500 (all earned income). What is the amount of his child and dependent care credit?

The alternative minimum tax base is typically ______ the regular income tax base.

Costa is a single taxpayer. His regular tax liability was $38,000. For 2016, he reported $190,000 of alternative minimum taxable income. What is his alternative minimum tax?

Which of the following is not a barrier to income shifting among family members?

For alternative minimum tax purposes, taxpayers are required to add back the regular tax standard deduction amount for their filing status whether or not they itemized deductions for regular tax purposes.

Kaelyn's mother, Judy, looks after Kaelyn's four-year-old twins so Kaelyn can go to work (she drops off and picks up the twins from Judy's home every day). Since Judy is a relative, Kaelyn made sure, for tax purposes, to pay her mother the going rate for child care ($6,300 for the year). What is the amount of Kaelyn's child and dependent care credit if her AGI for the year was $36,000?

Parents may claim a child tax credit for a dependent child who is 22 years of age at the end of the year if the child is a full-time student.

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold. This threshold is generally the ________.

Pyrrha, a 12-year-old dependent of Epimetheus and Pandora, received $2,200 of interest income in 2016. Her parents' marginal tax rate is 35%. What is Pyrrha's gross tax liability for the year?

Depending on the year, the original (unextended) due date for an individual's tax return may be after April 15.

All capital gains are taxed at preferential rates.

Which of the following statements regarding credits is correct?

Which of the following statements regarding the child tax credit is false?