Question 1

Which of the following statements regarding the AMT exemption amounts is not true?

Accepted Answer

A)  The amount of the exemption depends on the taxpayer's filing status. 
B)  The exemption amount is completely phased-out for high income taxpayers. 
C)  Taxpayers must choose whether they will claim the exemption or itemize deductions. 
D)  None of the above statements is false (all of the above statements are true). 
A)  The amount of the exemption depends on the taxpayer's filing status. 
B)  The exemption amount is completely phased-out for high income taxpayers. 
C)  Taxpayers must choose whether they will claim the exemption or itemize deductions. 
D)  None of the above statements is false (all of the above statements are true).

Question 2

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500. Given just this information, what is her alternative minimum tax liability for the year?

Accepted Answer

A)  $0 
B)  $11,500 
C)  $975 
D)  $12,475 
A)  $0 
B)  $11,500 
C)  $975 
D)  $12,475

Question 3

Which of the following statements concerning tax credits is true?

Accepted Answer

A)  The tax benefit a taxpayer receives from a credit depends on the taxpayer's marginal tax rate. 
B)  Refundable tax credits are limited to a taxpayer's gross tax liability. 
C)  Tax credits are generally more beneficial than tax deductions. 
D)  None of the above is a true statement. 
A)  The tax benefit a taxpayer receives from a credit depends on the taxpayer's marginal tax rate. 
B)  Refundable tax credits are limited to a taxpayer's gross tax liability. 
C)  Tax credits are generally more beneficial than tax deductions. 
D)  None of the above is a true statement.

Question 4

Keith and Nicole are married filing joint with two daughters who qualify as dependents. Their gross income for 2016 is $21,000. Are they required to file a tax return? How do you know this without memorizing the gross income thresholds? In 2016, the standard deduction for taxpayers filing a joint return is $12,600 and the personal exemption is $4,050.

Accepted Answer

Yes, Keith and Nicole are required to fi

Question 5

Hestia (age 17) is claimed as a dependent by her parents, Rhea and Chronus. In 2016, Hestia received $1,000 of interest income from a corporate bond that she owns. In addition, she has earned income of $200. What is her taxable income for 2016?

Accepted Answer

A)  $0 
B)  $150 
C)  $650 
D)  $1,200 
A)  $0 
B)  $150 
C)  $650 
D)  $1,200

Question 6

Atlas earned $17,300 from his sole proprietorship in 2016. This was his only source of income. How much in self-employment taxes will Atlas be able to deduct?

Accepted Answer

$1,222
Explanation:

Question 7

The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount of qualified expenses.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not a taxpayer filing status for purposes of determining the appropriate tax rate schedule?

Accepted Answer

A)  Head of Household 
B)  Qualifying Widow or Widower 
C)  Married Filing Separately 
D)  Single 
E)  All of the above are taxpayer filing statuses 
A)  Head of Household 
B)  Qualifying Widow or Widower 
C)  Married Filing Separately 
D)  Single 
E)  All of the above are taxpayer filing statuses

Question 9

Jackson earned a salary of $254,000 in 2016. What amount of FICA taxes should Jackson's employer withhold from his paycheck?

Accepted Answer

$11,516
Ex

Question 10

Demeter is a single taxpayer. Her AGI in 2016 is $81,200. Demeter may claim a child tax credit for her daughter Persephone. What amount of child tax credit is Demeter entitled to claim after any applicable phase-out?

Accepted Answer

$650
Explanation: $1

Question 11

Which of the following items is not added back to regular taxable income in computing alternative minimum taxable income?

Accepted Answer

A)  Home mortgage interest expense 
B)  Real property taxes 
C)  Tax exempt interest from a private activity bond issued in 2007 
D)  Miscellaneous itemized deductions in excess of the 2% floor 
A)  Home mortgage interest expense 
B)  Real property taxes 
C)  Tax exempt interest from a private activity bond issued in 2007 
D)  Miscellaneous itemized deductions in excess of the 2% floor

Question 12

For married couples, the .9 percent additional Medicare tax is based on the couple's combined wages.

Accepted Answer

A) True 
 B)False

Question 13

Carolyn has an AGI of $38,000 (all from earned income), two qualifying children, and is filing as a head of household. What amount of earned income credit is she entitled to?

Accepted Answer

A)  $0 
B)  $1,400 
C)  $3,373 
D)  $4,172 
E)  $5,572 
A)  $0 
B)  $1,400 
C)  $3,373 
D)  $4,172 
E)  $5,572

Question 14

Which of the following is not true of the extension to file an individual tax return?

Accepted Answer

A)  It is granted automatically by the IRS if requested 
B)  It must be requested by the original due date of the return 
C)  It extends the due date for the return and associated tax payments beyond the original due date of the tax return 
D)  The extension is for six months beyond the original due date 
A)  It is granted automatically by the IRS if requested 
B)  It must be requested by the original due date of the return 
C)  It extends the due date for the return and associated tax payments beyond the original due date of the tax return 
D)  The extension is for six months beyond the original due date

Question 15

Alton reported net income from his sole proprietorship of $90,000. To determine his self employment tax, he would multiply $90,000 by the self-employment tax rate.

Accepted Answer

A) True 
 B)False

Question 16

A marriage penalty occurs when a couple pays more taxes by filing a joint tax return than they would have paid had they filed married filing separate returns.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Accepted Answer

A)  An extension of time to file the tax return protects a taxpayer from late payment penalties as long as the tax is paid by the extended due date of the return. 
B)  The penalty rate for late filing penalties is less than the penalty rate for late payment penalties. 
C)  If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return, the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself. 
D)  None of the above 
A)  An extension of time to file the tax return protects a taxpayer from late payment penalties as long as the tax is paid by the extended due date of the return. 
B)  The penalty rate for late filing penalties is less than the penalty rate for late payment penalties. 
C)  If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return, the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself. 
D)  None of the above

Question 18

Due to the alternative minimum tax rate structure, timing tax planning strategies are not effective under the alternative minimum tax system.

Accepted Answer

A) True 
 B)False

Question 19

The American opportunity credit and lifetime learning credit are available to all taxpayers regardless of their income level.

Accepted Answer

A) True 
 B)False

Question 20

If both spouses of a married couple earn roughly equivalent wages, the couple is likely to pay a marriage penalty due to the nature of the tax rate schedules.

Accepted Answer

A) True 
 B)False

Which of the following statements regarding the AMT exemption amounts is not true?

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500. Given just this information, what is her alternative minimum tax liability for the year?

Which of the following statements concerning tax credits is true?

Hestia (age 17) is claimed as a dependent by her parents, Rhea and Chronus. In 2016, Hestia received $1,000 of interest income from a corporate bond that she owns. In addition, she has earned income of $200. What is her taxable income for 2016?

Atlas earned $17,300 from his sole proprietorship in 2016. This was his only source of income. How much in self-employment taxes will Atlas be able to deduct?

The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount of qualified expenses.

Which of the following is not a taxpayer filing status for purposes of determining the appropriate tax rate schedule?

Jackson earned a salary of $254,000 in 2016. What amount of FICA taxes should Jackson's employer withhold from his paycheck?

Demeter is a single taxpayer. Her AGI in 2016 is $81,200. Demeter may claim a child tax credit for her daughter Persephone. What amount of child tax credit is Demeter entitled to claim after any applicable phase-out?

Which of the following items is not added back to regular taxable income in computing alternative minimum taxable income?

For married couples, the .9 percent additional Medicare tax is based on the couple's combined wages.

Carolyn has an AGI of $38,000 (all from earned income), two qualifying children, and is filing as a head of household. What amount of earned income credit is she entitled to?

Which of the following is not true of the extension to file an individual tax return?

Alton reported net income from his sole proprietorship of $90,000. To determine his self employment tax, he would multiply $90,000 by the self-employment tax rate.

A marriage penalty occurs when a couple pays more taxes by filing a joint tax return than they would have paid had they filed married filing separate returns.

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Due to the alternative minimum tax rate structure, timing tax planning strategies are not effective under the alternative minimum tax system.

The American opportunity credit and lifetime learning credit are available to all taxpayers regardless of their income level.

If both spouses of a married couple earn roughly equivalent wages, the couple is likely to pay a marriage penalty due to the nature of the tax rate schedules.

An Introduction to Tax

Tax Compliance , the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual From Agi Deductions

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S: Corporations

Filters

Exam 8: Individual Income Tax Computation and Tax Credits

Which of the following statements regarding the AMT exemption amounts is not true?

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500. Given just this information, what is her alternative minimum tax liability for the year?

Which of the following statements concerning tax credits is true?

Hestia (age 17) is claimed as a dependent by her parents, Rhea and Chronus. In 2016, Hestia received $1,000 of interest income from a corporate bond that she owns. In addition, she has earned income of $200. What is her taxable income for 2016?

Atlas earned $17,300 from his sole proprietorship in 2016. This was his only source of income. How much in self-employment taxes will Atlas be able to deduct?

The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount of qualified expenses.

Which of the following is not a taxpayer filing status for purposes of determining the appropriate tax rate schedule?

Jackson earned a salary of $254,000 in 2016. What amount of FICA taxes should Jackson's employer withhold from his paycheck?

Demeter is a single taxpayer. Her AGI in 2016 is $81,200. Demeter may claim a child tax credit for her daughter Persephone. What amount of child tax credit is Demeter entitled to claim after any applicable phase-out?

Which of the following items is not added back to regular taxable income in computing alternative minimum taxable income?

For married couples, the .9 percent additional Medicare tax is based on the couple's combined wages.

Carolyn has an AGI of $38,000 (all from earned income), two qualifying children, and is filing as a head of household. What amount of earned income credit is she entitled to?

Which of the following is not true of the extension to file an individual tax return?

Alton reported net income from his sole proprietorship of $90,000. To determine his self employment tax, he would multiply $90,000 by the self-employment tax rate.

A marriage penalty occurs when a couple pays more taxes by filing a joint tax return than they would have paid had they filed married filing separate returns.

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Due to the alternative minimum tax rate structure, timing tax planning strategies are not effective under the alternative minimum tax system.

The American opportunity credit and lifetime learning credit are available to all taxpayers regardless of their income level.

If both spouses of a married couple earn roughly equivalent wages, the couple is likely to pay a marriage penalty due to the nature of the tax rate schedules.

An Introduction to Tax

Tax Compliance , the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual for Agi Deductions

Individual From Agi Deductions

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Entities Overview

Corporate Formations and Operations

Corporate Nonliquidating and Liquidating Distributions

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S: Corporations

Filters