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Exam 8: Individual Income Tax Computation and Tax Credits

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Question 31

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The American opportunity credit is available only for those students who are in their first or second year of postsecondary education.

A) True
B) False

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Question 32

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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?

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$690.Answe...

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Question 33

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

In 2019,John (52 years old)files as a head of household with one 18-year old dependent (qualifying)child.John is eligible to claim a $700 American opportunity credit for the year.John did not have any taxes withheld by his employer during the year and he did not make any estimated tax payments.After taking credits into account,what is the amount of John's taxes payable or refund,assuming that his AGI is $26,000 (all from salary)and his taxable income is $8,000?

Candace is claimed as a dependent on her parent's tax return.In 2019,Candace received $5,000 of interest income from corporate bonds she obtained several years ago.This is her only source of income.She is 15 years old at year-end.What is her gross tax liability?

The computation of the alternative minimum tax base begins with regular taxable income.Which of the following is not part of the formula for computing the alternative minimum tax base?

Long-term capital gains are taxed at the stated AMT rate for purposes of the alternative minimum tax.

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

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.

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

Which of the following tax credits is fully refundable?

Jamie is single.In 2019,she reported $100,000 of taxable income,including a long-term capital gain of $5,000.What is her gross tax liability,rounded to the nearest whole dollar amount? (Use the Tax rate schedules.)

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

Akiko and Hitachi (married filing jointly for 2019)are both educators.They attended a conference to further their job-related skills.Tuition for the conference was $2,000 for each person.Their AGI was $122,000.How much lifetime learning credit can they claim?

Which of the following is not an additional tax a taxpayer may have to pay?

How could an individual obtain a business tax credit?

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

An individual could pay 100 percent of her tax liability by the due date of her tax return and still be subject to underpayment tax penalties.

Maria and Tony are married.They are preparing to file their 2019 tax return.If they were to file as single taxpayers,Maria and Tony would report $10,000 and $70,000 of taxable income,respectively.On their joint tax return,their taxable income is $80,000.How much of a marriage penalty or benefit will Maria and Tony experience in 2019? (Use Tax rate schedules.)

Asteria earned a $25,500 salary as an employee in 2019.How much should her employer have withheld from her paycheck for FICA taxes? (Round your answer to the nearest whole dollar amount.)