Question 1

Kaelyn's mother,Judy,looks after Kaelyn's four-year-old twins so Kaelyn can go to work (she drops off and picks up the twins from Judy's home every day)  .Since Judy is a relative,Kaelyn made sure,for tax purposes,to pay her mother the going rate for child care ($6,300 for the year)  .What is the amount of Kaelyn's child and dependent care credit if her AGI for the year was $36,000?

Accepted Answer

A)  $1,440
B)  $2,100
C)  $6,000
D)  $0E) A) and B)
F) A) and C)

Question 2

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

Accepted Answer

A)  Jenny and Jim
B)  Allen
C)  Timmy
D)  None of theseE) All of the above
F) B) and C)

Question 3

Linda is a qualifying widow in 2013.In 2012,she reported $75,000 of taxable income (all ordinary)  .What is her gross tax liability using the tax rate schedules?

Accepted Answer

A)  $10,608
B)  $14,733
C)  $14,679
D)  $13,253E) A) and B)
F) None of the above

Question 4

Parents may claim a child and dependent care credit for expenses incurred in providing for their dependents while the parents work as long as the children are over age 14 and under age 20 at year end.The dependent must be under the age of 13.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Accepted Answer

A)  Taxpayers who have paid their full tax liability by the original tax return due date are protected from underpayment penalties.
B)  Taxpayers who have paid their full tax liability by the extended tax return due date are protected from underpayment penalties.
C)  Taxpayers who have uneven income streams can pay estimated tax quarterly in uneven amounts and not be susceptible to underpayment penalties.
D)  Taxpayers who have paid their required amount of estimated tax,even though not on time,are protected from underpayment penalties.Even if the stream of income changes throughout the year,quarterly estimated tax can be paid using rolling percentages of the estimated tax liability for the year.E) A) and B)
F) B) and C)

Question 6

Generally,income from an active trade or business is subject to the 3.8% Medicare contribution tax.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A)  All of it
B)  All of the unearned income
C)  The net unearned income
D)  Taxable income less the standard deductionE) A) and B)
F) A) and C)

Question 8

Which of the following statements accurately describes the alternative minimum tax rate(s)  ?

Accepted Answer

A)  The top AMT marginal rate is higher than the top regular tax marginal tax rate.
B)  The AMT rates represent a progressive tax rate structure.
C)  The AMT rate is the same rate for all taxpayers.
D)  None of these.AMT rates are 26% and 28% (higher rate for higher incomes)  .This represents a progressive tax rate structure.E) B) and C)
F) B) and D)

Question 9

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 10

Which of the following statements best describes the deductions independent contractors may claim for valid business expenses?

Accepted Answer

A)  for AGI deductions
B)  from AGI deductions not subject to the two percent of AGI floor
C)  from AGI deductions subject to a two percent of AGI floor
D)  for AGI deductions limited to income from the business activitiesE) B) and C)
F) A) and D)

Question 11

Hera earned $175,000 salary in 2013.Her husband,Zeus,earned $100,000 salary in 2013.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2013?

Accepted Answer

A)  $21,038
B)  $18,311
C)  $14,099
D)  $3,988E) All of the above
F) A) and C)

Question 12

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

Exam 7: Individual Income Tax Computation and Tax Credits

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.

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

Correct Answer
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Which of the following statements accurately describes the alternative minimum tax rate(s) ?

Correct Answer
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Generally,income from an active trade or business is subject to the 3.8% Medicare contribution tax.

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

Correct Answer
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Which of the following statements best describes the deductions independent contractors may claim for valid business expenses?

Correct Answer
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Linda is a qualifying widow in 2013.In 2012,she reported $75,000 of taxable income (all ordinary) .What is her gross tax liability using the tax rate schedules?

Correct Answer
verified

Parents may claim a child and dependent care credit for expenses incurred in providing for their dependents while the parents work as long as the children are over age 14 and under age 20 at year end.The dependent must be under the age of 13.

Correct Answer
verified

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

Correct Answer
verified

Hera earned $175,000 salary in 2013.Her husband,Zeus,earned $100,000 salary in 2013.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2013?

Correct Answer
verified

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Correct Answer
verified

Exam 7: Individual Income Tax Computation and Tax Credits

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.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements accurately describes the alternative minimum tax rate(s) ?

Correct AnswerverifiedShow Answer

Generally,income from an active trade or business is subject to the 3.8% Medicare contribution tax.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements best describes the deductions independent contractors may claim for valid business expenses?

Correct AnswerverifiedShow Answer

Linda is a qualifying widow in 2013.In 2012,she reported $75,000 of taxable income (all ordinary) .What is her gross tax liability using the tax rate schedules?

Correct AnswerverifiedShow Answer

Parents may claim a child and dependent care credit for expenses incurred in providing for their dependents while the parents work as long as the children are over age 14 and under age 20 at year end.The dependent must be under the age of 13.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Hera earned $175,000 salary in 2013.Her husband,Zeus,earned $100,000 salary in 2013.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2013?

Correct AnswerverifiedShow Answer

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Correct AnswerverifiedShow Answer

Correct Answer
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