Question 1

Employee status is always better than independent contractor status for a taxpayerbecause the employee is responsible for paying the employee portion of the FICA taxes.

Accepted Answer

A) True 
 B)False

Question 2

To qualify for the earned income credit, the taxpayer must have a qualified dependent.

Accepted Answer

A) True 
 B)False

Question 3

Paul and Melissa plan on filing jointly in 2017. For the year, the couple reported taxable income of$130,000. What is their gross tax liability? (Use Tax Rate Schedule.)

Accepted Answer

$23,978, computed as...

Question 4

The amount of expenditures eligible for the child and dependent care credit is the least of three amounts. Which of the following is not one of those amounts?

Accepted Answer

A)   The dependent's earned income for the year.
B)   $3,000 for one qualifying person or $6,000 for two or more qualifying persons.
C)   The total amount of child and dependent care expenditures for the year.
D)   The taxpayer's earned income for the year.E) A) and C)
F) All of the above

Question 5

The taxable income levels in the married filing jointly tax rate schedule are ________those in the married filing separately schedule.

Accepted Answer

A)   double
B)   half the amount of
C)   the same as
D)   None of the choices are correct.E) A) and B)
F) A) and C)

Question 6

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

Accepted Answer

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

Question 7

In 2017, Maia (who files as a head of household)  reported regular taxable income of$115,000. She itemized her deductions, deducting $8,000 in charitable contributions and$3,000 in state income taxes. She claimed exemptions for herself and her son, Hermes, ($4,050 each) . What is Maia's alternative minimum taxable income?

Accepted Answer

A)   $126,000
B)   $115,000
C)   $134,100
D)   $126,100E) All of the above
F) C) and D)

Question 8

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold. This threshold is generally the ________.

Accepted Answer

A)   applicable standard deduction amount plus the personal exemption amount.
B)   applicable standard deduction amount.
C)   twice the applicable standard deduction amount.
D)   personal exemption amount.E) None of the above
F) B) and D)

Question 9

Business credits are generally refundable credits.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not a barrier to income shifting among family members?

Accepted Answer

A)   Elimination of preferential tax rates (on dividends and long-term capital gains)  for dependents.
B)   Net unearned income for children 18 and younger taxed at parents' marginal tax rates.
C)   The assignment of income doctrine.
D)   Two of the choices.E) C) and D)
F) A) and B)

Question 11

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 carecredit?

Accepted Answer

$690
Answe...

Question 12

For taxpayers who receive both salary as an employee and self-employment income as an independent contractor in the same year, which of the following statements regarding FICA and self-employment taxes is most accurate?

Accepted Answer

A)   Self-employment income is first applied against the Social Security limit and then salary is applied against the Social Security limit.
B)   The Social Security limit applies to the salary but not to the self-employment income.
C)   The Social Security limit applies to the self-employment income but not to the salary.
D)   Salary is first applied against the Social Security limit and then self-employment income is applied against the Social Security limit.E) None of the above
F) All of the above

Question 13

Which of the following statement(s)  concerning estimated tax payments and underpayment penalties for individuals is (are)  true?

Accepted Answer

A)   The amount of penalty depends on the amount of the underpayment among other factors.
B)   Whether taxpayers are subject to underpayment penalties is determined on a quarterly basis.
C)   Due dates for estimated tax payments for a given year are April 15, June 15, September 15 of that year and January 15 of the next year unless these dates fall on a weekend or a holiday.
D)   All of these statements are true.E) C) and D)
F) All of the above

Question 14

The alternative minimum tax is the AMT base multiplied by the AMT rate.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)   Single
B)   Qualifying Widow or Widower
C)   Married Filing Separately
D)   Head of Household
E)   All of the choices are taxpayer filing statusesF) A) and E)
G) C) and D)

Question 16

Parents may claim a child tax credit for a dependent child who is 22 years of age at the end of the year if the child is a full-time student.

Accepted Answer

A) True 
 B)False

Question 17

Candace is claimed as a dependent on her parent's tax return. Her parents' ordinary income marginal tax rate is 33%. In 2017, 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?

Accepted Answer

$1,062
Ans...

Question 18

Self-employed taxpayers are allowed to deduct the full amount of the self-employment taxes they pay.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A)   May realize a loss from business activities.
B)   Works somewhere other than on employer premises.
C)   Sets own working hours.
D)   Works for more than one firm.
E)   All of the these choices suggest independent contractor status.F) None of the above
G) A) and C)

Question 20

Looking at the following partial calendar for April, when will individual tax returns be due?121)

Accepted Answer

A)   Saturday, April 15.
B)   Sunday, April 16.
C)   Friday, April 14.
D)   Monday, April 17.
E)   Tuesday, April 18.F) B) and E)
G) B) and D)

Exam 8: Individual Income Tax Computation and Tax Credits

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold. This threshold is generally the ________.

Correct Answer
verified

Correct Answer
verified

For taxpayers who receive both salary as an employee and self-employment income as an independent contractor in the same year, which of the following statements regarding FICA and self-employment taxes is most accurate?

Correct Answer
verified

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

Correct Answer
verified

Which of the following statement(s) concerning estimated tax payments and underpayment penalties for individuals is (are) true?

Correct Answer
verified

Correct Answer
verified
$1,062
Ans...
View Answer

Paul and Melissa plan on filing jointly in 2017. For the year, the couple reported taxable income of$130,000. What is their gross tax liability? (Use Tax Rate Schedule.)

Correct Answer
verified
$23,978, computed as...
View Answer

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 carecredit?

Correct Answer
verified
$690
Answe...
View Answer

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

Correct Answer
verified

Self-employed taxpayers are allowed to deduct the full amount of the self-employment taxes they pay.

Correct Answer
verified

Looking at the following partial calendar for April, when will individual tax returns be due?121)

Correct Answer
verified

The taxable income levels in the married filing jointly tax rate schedule are ________those in the married filing separately schedule.

Correct Answer
verified

Employee status is always better than independent contractor status for a taxpayerbecause the employee is responsible for paying the employee portion of the FICA taxes.

Correct Answer
verified

Parents may claim a child tax credit for a dependent child who is 22 years of age at the end of the year if the child is a full-time student.

Correct Answer
verified

The alternative minimum tax is the AMT base multiplied by the AMT rate.

Correct Answer
verified

To qualify for the earned income credit, the taxpayer must have a qualified dependent.

Correct Answer
verified

Business credits are generally refundable credits.

Correct Answer
verified

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

Correct Answer
verified

The amount of expenditures eligible for the child and dependent care credit is the least of three amounts. Which of the following is not one of those amounts?

Correct Answer
verified

Which of the following is not a barrier to income shifting among family members?

Correct Answer
verified

Exam 8: Individual Income Tax Computation and Tax Credits

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold. This threshold is generally the ________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

For taxpayers who receive both salary as an employee and self-employment income as an independent contractor in the same year, which of the following statements regarding FICA and self-employment taxes is most accurate?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statement(s) concerning estimated tax payments and underpayment penalties for individuals is (are) true?

Correct AnswerverifiedShow Answer

Correct Answerverified$1,062Ans...View AnswerShow Answer

Paul and Melissa plan on filing jointly in 2017. For the year, the couple reported taxable income of$130,000. What is their gross tax liability? (Use Tax Rate Schedule.)

Correct Answerverified$23,978, computed as...View AnswerShow Answer

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 carecredit?

Correct Answerverified$690Answe...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Self-employed taxpayers are allowed to deduct the full amount of the self-employment taxes they pay.

Correct AnswerverifiedShow Answer

Looking at the following partial calendar for April, when will individual tax returns be due?121)

Correct AnswerverifiedShow Answer

The taxable income levels in the married filing jointly tax rate schedule are ________those in the married filing separately schedule.

Correct AnswerverifiedShow Answer

Employee status is always better than independent contractor status for a taxpayerbecause the employee is responsible for paying the employee portion of the FICA taxes.

Correct AnswerverifiedShow Answer

Parents may claim a child tax credit for a dependent child who is 22 years of age at the end of the year if the child is a full-time student.

Correct AnswerverifiedShow Answer

The alternative minimum tax is the AMT base multiplied by the AMT rate.

Correct AnswerverifiedShow Answer

To qualify for the earned income credit, the taxpayer must have a qualified dependent.

Correct AnswerverifiedShow Answer

Business credits are generally refundable credits.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The amount of expenditures eligible for the child and dependent care credit is the least of three amounts. Which of the following is not one of those amounts?

Correct AnswerverifiedShow Answer

Which of the following is not a barrier to income shifting among family members?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$1,062
Ans...
View Answer

Correct Answer
verified
$23,978, computed as...
View Answer

Correct Answer
verified
$690
Answe...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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