Question 1

Which of the following could explain why a large number of taxpayers are subject to (or could become subject to) AMT?

Accepted Answer

A)   Regular tax rates have decreased since the AMT was enacted.
B)   The AMT exemption amount is indexed to increase with inflation.
C)   Property values are decreasing.
D)   The personal and dependency exemption amounts are not increasing as fast as the AMT exemption is decreasing.E) C) and D)
F) A) and D)

Question 2

Which of the following statements regarding FICA taxes is true?

Accepted Answer

A)   Low income employees are not required to pay FICA taxes.
B)   An employee who has two different employers during the year may be entitled to a tax credit for overpaid FICA taxes.
C)   The maximum amount of Medicare taxes an employee is required to pay is capped each year but the maximum amount of Social Security taxes is not.
D)   The wage base limit for Social Security taxes depends on the taxpayer's filing status.E) A) and B)
F) B) and D)

Question 3

All capital gains are taxed at preferential rates.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A)   Whether taxpayers are subject to underpayment penalties is determined on a quarterly basis.
B)   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.
C)   The amount of penalty depends on the amount of the underpayment among other factors.
D)   All of these statements are true.E) B) and D)
F) All of the above

Question 5

Which of the following statements regarding the self-employment tax is most accurate?

Accepted Answer

A)  The self-employment tax base is generally the taxpayer's net income from self-employment (usually net income from Schedule 
C)  .
B)  Taxpayers who report less than $600 of net income from self-employment (usually net income from Schedule 
C)  are not required to pay self-employment taxes.
C)  The self-employment tax base is net earnings from self employment which is less than net income from self-employment.
D)  The Social Security tax limit does not apply to self-employment taxes.E) A) and B)
F) A) and C)

Question 6

The American opportunity credit and lifetime learning credit are available to all taxpayers regardless of their income level.

Accepted Answer

A) True 
 B)False

Question 7

For married couples,the.9 percent additional Medicare tax is based on the couple's combined wages.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements regarding credits is correct?

Accepted Answer

A)   Business expenses are generally refundable credits.
B)   Business credits that are generated in one year but are not utilized in that year expire.
C)   Business credits that are generated in one year but are not utilized in that year may be carried forward to future years but not back to a prior year.
D)   Business credits that are generated in one year but are not utilized in that year may be carried back to the previous year and then forward to future years.E) All of the above
F) A) and C)

Question 9

Harmony reports a regular tax liability of $15,000 and tentative minimum tax of $17,000.Given just this information,what is her alternative minimum tax liability for the year?

Accepted Answer

A)   $0
B)   $2,000
C)   $15,000
D)   $17,000E) B) and C)
F) A) and D)

Question 10

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

Accepted Answer

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

Question 11

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a true statement about the American opportunity credit (AOC) and lifetime learning credits (assume the 2016 rules apply for the qualified education expense deduction) ?

Accepted Answer

A)   A taxpayer may not report both an AOC and a lifetime learning credit on the same tax return.
B)   Certain educational expenses qualify for both credits but taxpayers must claim one credit or the other for the expenditures (the taxpayer cannot claim both credits for the same expenditures) .
C)   Taxpayers may choose to either (1)  deduct qualifying education expenses of an individual as for AGI deductions or (2)  claim educational credits for the individual's expenses (but not both) 
D)   The AGI phase-out threshold for phasing out the AOC is higher than the AGI phase-out threshold for the lifetime learning credit.E) C) and D)
F) B) and C)

Question 13

For alternative minimum tax purposes,taxpayers are allowed to deduct state income taxes but are not allowed to deduct charitable contributions.

Accepted Answer

A) True 
 B)False

Question 14

Hera earned $175,000 salary in 2017.Her husband,Zeus,earned $100,000 salary in 2017.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2017?

Accepted Answer

A)   $15,772
B)   $19,985
C)   $19,761
D)   $4,213E) None of the above
F) All of the above

Question 15

In 2017,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 $9,000?

Accepted Answer

Refund of $1,976
Ans...

Question 16

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?

Accepted Answer

$690
Answe...

Question 17

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

Accepted Answer

A)   smaller than
B)   about the same as
C)   larger than
D)   exactly the same asE) B) and C)
F) A) and D)

Exam 8: Individual Income Tax Computation and Tax Credits

Correct Answer
verified
Refund of $1,976
Ans...
View Answer

Which of the following is not a true statement about the American opportunity credit (AOC) and lifetime learning credits (assume the 2016 rules apply for the qualified education expense deduction) ?

Correct Answer
verified

Which of the following could explain why a large number of taxpayers are subject to (or could become subject to) AMT?

Correct Answer
verified

For alternative minimum tax purposes,taxpayers are allowed to deduct state income taxes but are not allowed to deduct charitable contributions.

Correct Answer
verified

The American opportunity credit and lifetime learning credit are available to all taxpayers regardless of their income level.

Correct Answer
verified

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?

Correct Answer
verified
$690
Answe...
View Answer

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

Correct Answer
verified

Harmony reports a regular tax liability of $15,000 and tentative minimum tax of $17,000.Given just this information,what is her alternative minimum tax liability for the year?

Correct Answer
verified

Hera earned $175,000 salary in 2017.Her husband,Zeus,earned $100,000 salary in 2017.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2017?

Correct Answer
verified

Which of the following statements regarding FICA taxes is true?

Correct Answer
verified

Which of the following statements regarding credits is correct?

Correct Answer
verified

For married couples,the.9 percent additional Medicare tax is based on the couple's combined wages.

Correct Answer
verified

All capital gains are taxed at preferential rates.

Correct Answer
verified

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

Correct Answer
verified

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements regarding the self-employment tax is most accurate?

Correct Answer
verified

Exam 8: Individual Income Tax Computation and Tax Credits

Correct AnswerverifiedRefund of $1,976Ans...View AnswerShow Answer

Which of the following is not a true statement about the American opportunity credit (AOC) and lifetime learning credits (assume the 2016 rules apply for the qualified education expense deduction) ?

Correct AnswerverifiedShow Answer

Which of the following could explain why a large number of taxpayers are subject to (or could become subject to) AMT?

Correct AnswerverifiedShow Answer

For alternative minimum tax purposes,taxpayers are allowed to deduct state income taxes but are not allowed to deduct charitable contributions.

Correct AnswerverifiedShow Answer

The American opportunity credit and lifetime learning credit are available to all taxpayers regardless of their income level.

Correct AnswerverifiedShow 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 care credit?

Correct Answerverified$690Answe...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Harmony reports a regular tax liability of $15,000 and tentative minimum tax of $17,000.Given just this information,what is her alternative minimum tax liability for the year?

Correct AnswerverifiedShow Answer

Hera earned $175,000 salary in 2017.Her husband,Zeus,earned $100,000 salary in 2017.Hera and Zeus file a joint tax return.How much FICA taxes will they owe in 2017?

Correct AnswerverifiedShow Answer

Which of the following statements regarding FICA taxes is true?

Correct AnswerverifiedShow Answer

Which of the following statements regarding credits is correct?

Correct AnswerverifiedShow Answer

For married couples,the.9 percent additional Medicare tax is based on the couple's combined wages.

Correct AnswerverifiedShow Answer

All capital gains are taxed at preferential rates.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements regarding the self-employment tax is most accurate?

Correct AnswerverifiedShow Answer

Correct Answer
verified
Refund of $1,976
Ans...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$690
Answe...
View Answer

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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