Question 1

Gina has $39,000 total taxable income, which includes $6,000 of taxable income from Argentina. She paid $1,200 in foreign income taxes and her U.S. tax liability is $3,610. Gina's foreign tax credit is: (Do not round interim calculations)

Accepted Answer

A)  $0. 
B)  $450. 
C)  $555. 
D) $1,200.

Question 2

A student can only receive the lifetime learning credit if he/she is enrolled in a degree program.

Accepted Answer

A) True 
 B)False

Question 3

The child tax credit is reduced if AGI exceeds $110,000 for married filing joint taxpayers.

Accepted Answer

A) True 
 B)False

Question 4

The earned income credit is adjusted each year for inflation.

Accepted Answer

A) True 
 B)False

Question 5

Kylie is a single mom with two dependent children, Tanner, age 7 and Olivia, age 11. She has AGI of $38,000 and paid $5,300 to a qualified day care center for the two children. What amount of credit can Kylie receive for the child and dependent care credit?

Accepted Answer

A)  $600. 
B)  $1,200. 
C)  $1,219. 
D) $5,300.

Question 6

The calculation for the credit for the elderly or disabled requires that the appropriate base amount be adjusted by two items. What are those two items and how is the base amount adjusted?

Accepted Answer

The answer of The calculation for the credit for the...

Question 7

The maximum lifetime learning credit per taxpayer is $3,000 per year.

Accepted Answer

A) True 
 B)False

Question 8

Lupe paid the following expenses during December 2015 for her son David's spring 2016 college expenses. The semester begins in February 2016.  In addition, David's grandfather paid $500 in fees on behalf of David directly to the college. David is claimed as a dependent on Lupe's tax return. How much of the above expenses qualify for purposes of Lupe's education credit deduction in 2015?

Accepted Answer

A)  $8,500. 
B)  $16,000. 
C)  $16,500. 
D) $24,500.

Question 9

Tyson is single and cannot be claimed by anyone as a dependent. He is a full-time law student at a local university. His tuition bill was $8,000. He paid the bill by withdrawing $2,000 from his savings account and borrowing the remainder from a local bank. For purposes of the education tax credits, what is the amount of Tyson's qualifying expenses?

Accepted Answer

The answer of Tyson is single and cannot be claimed...

Question 10

The maximum amount per year of dependent care expenses that can be used for calculating the credit for child and dependent care expenses is $6,000 for two or more qualifying individuals.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements is not true regarding the credit for the elderly or the disabled?

Accepted Answer

A)  Base amount for the credit calculation for a single individual is $5,000. 
B)  Base amount for the credit calculation for joint returns is $5,000. 
C)  The maximum allowable credit is based on 15% of the taxpayer's base amount. 
D) Base amount for the credit calculation for a joint individual where only one spouse qualifies is $5,000.

Question 12

The credit for child and dependent care expenses can only be claimed if a taxpayer incurs employment-related expenses to care for one or more qualifying individuals.

Accepted Answer

A) True 
 B)False

Question 13

Assume a taxpayer is qualified to receive a premium tax credit. Explain how to calculate the amount of the credit.

Accepted Answer

The answer of Assume a taxpayer is qualified to receive...

Question 14

Shawn and Dahlia are married; both work and have one qualifying child. They had AGI of $19,000. What is their Earned Income Credit?

Accepted Answer

A)  $0. 
B)  $503. 
C)  $3,359. 
D) $6,460.

Question 15

Mindy and Xavier have a tax liability of $475 before EIC. Their EIC for the current year is $2,578. What is their total tax refund or tax liability for the current year (assume they have no other credits or additional tax liability)?

Accepted Answer

A)  $0. 
B)  $475 tax liability. 
C)  $2,103 tax refund. 
D) $2,578 tax refunD.$2,578 - $475 = $2,103 tax refund.

Question 16

What is the difference between a refundable tax credit and a nonrefundable tax credit? Use at least one example of each type of credit in your answer.

Accepted Answer

The answer of What is the difference between a refundable...

Question 17

Conner and Matsuko paid $1,000 and $2,000, in qualifying expenses for their two sons, Jason and Justin, respectively, to attend Montana State University. Jason is a sophomore and Justin is a freshman. Conner and Matsuko's AGI is $195,000. What is their allowable American opportunity tax credit?

Accepted Answer

A)  $0. 
B)  $2,000. 
C)  $3,050. 
D) $3,700.

Question 18

Cooper is a single dad with 1 child and his TOTAL tax liability for the current tax year is $2,100. His EIC amount is $3,094 and he had no withholdings during the year. What amount of tax refund or tax owed would be on Cooper's tax return?

Accepted Answer

A)  $0. 
B)  $994 tax refund. 
C)  $2,100 tax owed. 
D) $3,094 tax refunD.$3,094 - $2,100 = $994 tax refund: EIC is a refundable credit.

Question 19

Tina has $93,000 total taxable income, which includes $18,000 of taxable income from Japan. She paid $2,200 in foreign income taxes and her U.S. tax liability is $19,610. Tina's foreign tax credit is: (Do not round interim calculations)

Accepted Answer

A)  $0. 
B)  $2,200. 
C)  $3,795. 
D) $18,000.

Question 20

Jillian is single and her son, Parker is 12 years old. If her AGI is $76,200, what is her child tax credit for Parker?

Accepted Answer

A)  $0. 
B)  $500. 
C)  $900. 
D) $1,000.

Exam 9: Tax Credits

Gina has $39,000 total taxable income, which includes $6,000 of taxable income from Argentina. She paid $1,200 in foreign income taxes and her U.S. tax liability is $3,610. Gina's foreign tax credit is: (Do not round interim calculations)

A student can only receive the lifetime learning credit if he/she is enrolled in a degree program.

The child tax credit is reduced if AGI exceeds $110,000 for married filing joint taxpayers.

The earned income credit is adjusted each year for inflation.

Kylie is a single mom with two dependent children, Tanner, age 7 and Olivia, age 11. She has AGI of $38,000 and paid $5,300 to a qualified day care center for the two children. What amount of credit can Kylie receive for the child and dependent care credit?

The calculation for the credit for the elderly or disabled requires that the appropriate base amount be adjusted by two items. What are those two items and how is the base amount adjusted?

The maximum lifetime learning credit per taxpayer is $3,000 per year.

The maximum amount per year of dependent care expenses that can be used for calculating the credit for child and dependent care expenses is $6,000 for two or more qualifying individuals.

Which of the following statements is not true regarding the credit for the elderly or the disabled?

The credit for child and dependent care expenses can only be claimed if a taxpayer incurs employment-related expenses to care for one or more qualifying individuals.

Assume a taxpayer is qualified to receive a premium tax credit. Explain how to calculate the amount of the credit.

Shawn and Dahlia are married; both work and have one qualifying child. They had AGI of $19,000. What is their Earned Income Credit?

Mindy and Xavier have a tax liability of $475 before EIC. Their EIC for the current year is $2,578. What is their total tax refund or tax liability for the current year (assume they have no other credits or additional tax liability) ?

What is the difference between a refundable tax credit and a nonrefundable tax credit? Use at least one example of each type of credit in your answer.

Conner and Matsuko paid $1,000 and $2,000, in qualifying expenses for their two sons, Jason and Justin, respectively, to attend Montana State University. Jason is a sophomore and Justin is a freshman. Conner and Matsuko's AGI is $195,000. What is their allowable American opportunity tax credit?

Cooper is a single dad with 1 child and his TOTAL tax liability for the current tax year is $2,100. His EIC amount is $3,094 and he had no withholdings during the year. What amount of tax refund or tax owed would be on Cooper's tax return?

Tina has $93,000 total taxable income, which includes $18,000 of taxable income from Japan. She paid $2,200 in foreign income taxes and her U.S. tax liability is $19,610. Tina's foreign tax credit is: (Do not round interim calculations)

Jillian is single and her son, Parker is 12 years old. If her AGI is $76,200, what is her child tax credit for Parker?