Question 1

Individuals may file for and receive a six-month extension of time to file their tax return and pay their taxes without penalty.

Accepted Answer

A) True 
 B)False

Question 2

Long-term capital gains, dividends, and taxable interest income are all taxed at preferential rates.

Accepted Answer

A) True 
 B)False

Question 3

Regular taxable income is the starting point for determining the alternative minimum tax.

Accepted Answer

A) True 
 B)False

Question 4

The Olympians have three children. The kiddie tax applies to unearned income received by which of the following children?

Accepted Answer

A)  Poseidon is a 20-year-old full-time student who does not support himself 
B)  Demeter, a 23-year-old full-time student who supports herself with a job at a grocery store 
C)  Zeus is 20 years old and not a student 
D)  Two of the above 
E)  None of the above 
A)  Poseidon is a 20-year-old full-time student who does not support himself 
B)  Demeter, a 23-year-old full-time student who supports herself with a job at a grocery store 
C)  Zeus is 20 years old and not a student 
D)  Two of the above 
E)  None of the above

Question 5

Which of the following is not typical of taxpayers who are most likely affected by the AMT?

Accepted Answer

A)  Have many dependents 
B)  Pay high state income tax 
C)  Pay high property taxes 
D)  Have relatively low capital gains 
A)  Have many dependents 
B)  Pay high state income tax 
C)  Pay high property taxes 
D)  Have relatively low capital gains

Question 6

Wolfina's twins, Romulus and Remus, finished their first year of school at an accredited university in 2016. She paid $10,000 in qualified educational expenses for Romulus and $2,000 of qualifying expenses for Remus. Wolfina is a head of household with an AGI of $85,000. What amount of American opportunity credit may she claim?

Accepted Answer

$2,250
Exp

Question 7

Trudy is Jocelyn's friend. Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work. During the year, Jocelyn paid Trudy $4,000 to care for her son. What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $30,000?

Accepted Answer

A)  $0 
B)  $810 
C)  $1,080 
D)  $3,000 
A)  $0 
B)  $810 
C)  $1,080 
D)  $3,000

Question 8

Which of the following is not a true statement about the American opportunity credit (AOC) and lifetime learning credits?

Accepted Answer

A)  A taxpayer may not report both an AOC and a lifetime learning credit on the same tax return 
B)  Certain educational expenses qualify for both credits but taxpayers must claim one credit or the other for the expenditures (the taxpayer cannot claim both credits for the same expenditures) 
C)  Taxpayers may choose to either (1) deduct qualifying education expenses of an individual as for AGI deductions or claim educational credits for the individual's expenses (but not both) 
D)  The AGI phase-out threshold for phasing out the AOC is higher than the AGI phase-out threshold for the lifetime learning credit 
A)  A taxpayer may not report both an AOC and a lifetime learning credit on the same tax return 
B)  Certain educational expenses qualify for both credits but taxpayers must claim one credit or the other for the expenditures (the taxpayer cannot claim both credits for the same expenditures) 
C)  Taxpayers may choose to either (1) deduct qualifying education expenses of an individual as for AGI deductions or claim educational credits for the individual's expenses (but not both) 
D)  The AGI phase-out threshold for phasing out the AOC is higher than the AGI phase-out threshold for the lifetime learning credit

Question 9

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Accepted Answer

A) True 
 B)False

Question 10

Employees are allowed to deduct a portion of the FICA taxes they pay.

Accepted Answer

A) True 
 B)False

Question 11

Tax rate schedules are provided for use by (relatively) higher income taxpayers while the tax tables are provided for use by (relatively) lower income taxpayers.

Accepted Answer

A) True 
 B)False

Question 12

Sam is 30 years old. In 2016, he reported an AGI of $12,000, all from his job as a server at the local café. He is single and has no dependents. What amount of earned income credit may he claim in 2016?

Accepted Answer

$221
Expla

Question 13

Julien and Sarah are married, file a joint return, and have two children, Kaya and Christopher. Kaya just finished her third year at college and Christopher just finished his first year of graduate school (fifth year of college). Tuition and books for the past year were $1,800 for Kaya and $5,000 for Christopher. How much can Julien and Sarah claim in educational credits if their joint AGI was $123,000 for 2016?

Accepted Answer

$2,200
Exp

Question 14

Which of the following statements regarding the self-employment tax is most accurate?

Accepted Answer

A)  The self-employment tax base is generally the taxpayer's net income from self-employment (usually net income from Schedule 
C) . 
B)  Taxpayers who report less than $600 of net income from self-employment (usually net income from Schedule 
C)  are not required to pay self employment taxes. 
C)  The self-employment tax base is net earnings from self employment which is less than net income from self-employment. 
D)  The Social Security tax limit does not apply to self-employment taxes. 
A)  The self-employment tax base is generally the taxpayer's net income from self-employment (usually net income from Schedule 
C) . 
B)  Taxpayers who report less than $600 of net income from self-employment (usually net income from Schedule 
C)  are not required to pay self employment taxes. 
C)  The self-employment tax base is net earnings from self employment which is less than net income from self-employment. 
D)  The Social Security tax limit does not apply to self-employment taxes.

Question 15

All else equal, a reduction in regular income tax rates would require more taxpayers to pay the alternative minimum tax.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements concerning a comparison between employees and independent contractors is most accurate?

Accepted Answer

A)  Employees and independent contractors deduct business expenses as miscellaneous itemized deductions. 
B)  While employees are typically eligible for nontaxable fringe benefits from employers, independent contractors are not. 
C)  Employers are required to withhold either FICA or self employment taxes from compensation paid to employees and compensation paid to independent contractors. 
D)  Employers typically withhold federal income taxes from compensation paid to employees and to independent contractors. 
A)  Employees and independent contractors deduct business expenses as miscellaneous itemized deductions. 
B)  While employees are typically eligible for nontaxable fringe benefits from employers, independent contractors are not. 
C)  Employers are required to withhold either FICA or self employment taxes from compensation paid to employees and compensation paid to independent contractors. 
D)  Employers typically withhold federal income taxes from compensation paid to employees and to independent contractors.

Question 17

What is the underpayment penalty rate that taxpayers pay when they underpay their estimated taxes?

Accepted Answer

A)  Federal short-term interest rate. 
B)  Federal short-term interest rate plus three percentage points. 
C)  Federal long-term interest rate plus six percentage points. 
D)  Zero. The government does not pay interest on overpayments. 
A)  Federal short-term interest rate. 
B)  Federal short-term interest rate plus three percentage points. 
C)  Federal long-term interest rate plus six percentage points. 
D)  Zero. The government does not pay interest on overpayments.

Individuals may file for and receive a six-month extension of time to file their tax return and pay their taxes without penalty.

Long-term capital gains, dividends, and taxable interest income are all taxed at preferential rates.

Regular taxable income is the starting point for determining the alternative minimum tax.

The Olympians have three children. The kiddie tax applies to unearned income received by which of the following children?

Which of the following is not typical of taxpayers who are most likely affected by the AMT?

Trudy is Jocelyn's friend. Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work. During the year, Jocelyn paid Trudy $4,000 to care for her son. What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $30,000?

Which of the following is not a true statement about the American opportunity credit (AOC) and lifetime learning credits?

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Employees are allowed to deduct a portion of the FICA taxes they pay.

Tax rate schedules are provided for use by (relatively) higher income taxpayers while the tax tables are provided for use by (relatively) lower income taxpayers.

Sam is 30 years old. In 2016, he reported an AGI of $12,000, all from his job as a server at the local café. He is single and has no dependents. What amount of earned income credit may he claim in 2016?

Which of the following statements regarding the self-employment tax is most accurate?

All else equal, a reduction in regular income tax rates would require more taxpayers to pay the alternative minimum tax.

Which of the following statements concerning a comparison between employees and independent contractors is most accurate?

What is the underpayment penalty rate that taxpayers pay when they underpay their estimated taxes?

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

Individuals may file for and receive a six-month extension of time to file their tax return and pay their taxes without penalty.

Long-term capital gains, dividends, and taxable interest income are all taxed at preferential rates.

Regular taxable income is the starting point for determining the alternative minimum tax.

The Olympians have three children. The kiddie tax applies to unearned income received by which of the following children?

Which of the following is not typical of taxpayers who are most likely affected by the AMT?

Trudy is Jocelyn's friend. Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work. During the year, Jocelyn paid Trudy $4,000 to care for her son. What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $30,000?

Which of the following is not a true statement about the American opportunity credit (AOC) and lifetime learning credits?

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Employees are allowed to deduct a portion of the FICA taxes they pay.

Tax rate schedules are provided for use by (relatively) higher income taxpayers while the tax tables are provided for use by (relatively) lower income taxpayers.

Sam is 30 years old. In 2016, he reported an AGI of $12,000, all from his job as a server at the local café. He is single and has no dependents. What amount of earned income credit may he claim in 2016?

Which of the following statements regarding the self-employment tax is most accurate?

All else equal, a reduction in regular income tax rates would require more taxpayers to pay the alternative minimum tax.

Which of the following statements concerning a comparison between employees and independent contractors is most accurate?

What is the underpayment penalty rate that taxpayers pay when they underpay their estimated taxes?

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