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Exam 8: Individual Income Tax Computation and Tax Credits

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Question 1

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Assuming the kiddie tax applies,what amount of a child's income is subject to the kiddie tax?

A) All of the child's income
B) All of the unearned income
C) The net unearned income
D) Taxable income less the standard deduction

E) A) and B)
F) A) and C)

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Question 2

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Which of the following taxpayers (all age 40) is/are required to file a return?

A) Jenny and Jim
B) Allen
C) Timmy
D) None of the choices are correct

E) C) and D)
F) A) and D)

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Question 3

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Hera earned a $175,000 salary in 2019.Her husband,Zeus,earned $100,000 salary in 2019.Hera and Zeus file a joint tax return.How much in FICA taxes will they owe in 2019?

Lexa,a single taxpayer,worked as an employee during the first half of the year,earning $65,000 of salary.Lexa's employer withheld $4,030 of Social Security tax,$943 of Medicare tax,and $0 of additional Medicare tax.In the second half of the year,she was self-employed and she reported $180,000 of self-employment income on her Schedule C.What amount of self-employment taxes and additional Medicare tax is Lexa required to pay on her self-employment income (each component rounded to the nearest dollar)?

Both the width (or range)of the tax brackets (the amount of income taxed at a particular rate)in the tax rate schedules and the range of the tax rates in the tax rate schedules (the difference between the lowest tax rate and the highest tax rate)vary by filing status.

Employees are not allowed to deduct FICA taxes they pay.

During 2019,Montoya (age 15) received $2,200 from a corporate bond.He also received $600 from a savings account established for him by his parents.Montoya lives with his parents and he is their dependent.What is Montoya's taxable income?

Which of the following suggests that a working taxpayer is an independent contractor rather than an employee?

Quantitatively,what is the relationship between the AGI phase-out thresholds for the child tax credit?

Rhianna and Jay are married filing jointly in 2019.They have six children under age 17 for whom they may claim the child tax credit.Their AGI was $419,400.What amount of child tax credit may they claim on their 2019 tax return?

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

Katlyn reported $300 of net income from her sole proprietorship.She is not required to pay self-employment tax.

Pyrrha,a 12-year-old dependent of Epimetheus and Pandora,received $8,200 of interest income in 2019.What is Pyrrha's gross tax liability for the year?

Jackson earned a salary of $254,000 in 2019.What amount of FICA taxes should Jackson's employer withhold from his paycheck?

If a married couple has one primary breadwinner,filing a joint return will likely result in a marriage penalty.

The tax rate schedules are set up to tax lower levels of income at higher tax rates than higher levels of income.

Which of the following does not affect the amount of the earned income credit?

When applying credits against a taxpayer's gross tax liability,nonrefundable personal credits are applied first,then business credits,and finally refundable personal credits.

Apollo is single and his AMT base is $100,250.This amount includes $500 of qualified dividends (the dividends were taxed at 15 percent in determining the regular tax liability).What is Apollo's tentative minimum tax?

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