Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

The AMT exemption amount is phased-out for high income taxpayers.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A)   Employees and independent contractors deduct business expenses as miscellaneous itemized deductions.
B)   While employees are typically eligible for nontaxable fringe benefits from employers, independent contractors are not.
C)   Employers are required to withhold either FICA or self-employment taxes from compensation paid to employees and compensation paid to independent contractors.
D)   Employers typically withhold federal income taxes from compensation paid to employees and to independent contractors.E) B) and C)
F) C) and D)

Question 4

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

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Akiko and Hitachi (married filing jointly for 2018) 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 $120,000. How much lifetime learning credit can they claim?

Accepted Answer

$560
Answe...

Question 8

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) C) and D)
F) A) and B)

Question 9

Maria and Tony are married. They are preparing to file their 2018 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 2018? (Use Tax Rate Schedule.)

Accepted Answer

Filing jointly will result in a "marriag...

Question 10

Which of the following statements concerning tax credits is true?

Accepted Answer

A)   The tax benefit a taxpayer receives from a credit depends on the taxpayer's marginal tax rate.
B)   Refundable tax credits are limited to a taxpayer's gross tax liability.
C)   Tax credits are generally more beneficial than tax deductions.
D)   None of the these is a true statement.E) B) and C)
F) A) and B)

Question 11

In 2018, 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?

Accepted Answer

Refund of $2,288.
Answer compu...

Question 12

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500. Given just this information, what is her alternative minimum tax liability for the year?

Accepted Answer

A)   $0
B)   $11,500
C)   $975
D)   $12,475E) None of the above
F) B) and D)

Question 13

Harrison received a qualified dividend. Without knowing any additional facts, which of the following statements is true regarding the rate at which the dividend will be taxed to Harrison?

Accepted Answer

A)   The dividend will be taxed at a 15% tax rate.
B)   The dividend will be taxed at a 20% tax rate.
C)   The entire dividend will be taxed at either 15% or the entire dividend will be taxed at 20% depending on Harrison's marginal ordinary income tax rate.
D)   None of the choices are correct.E) A) and D)
F) C) and D)

Question 14

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

Accepted Answer

$26,010
An...

Exam 8: Individual Income Tax Computation and Tax Credits

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

Correct Answer
verified

Akiko and Hitachi (married filing jointly for 2018) 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 $120,000. How much lifetime learning credit can they claim?

Correct Answer
verified
$560
Answe...
View Answer

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

The AMT exemption amount is phased-out for high income taxpayers.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
Refund of $2,288.
Answer compu...
View Answer

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

Correct Answer
verified

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500. Given just this information, what is her alternative minimum tax liability for the year?

Correct Answer
verified

Which of the following statements concerning tax credits is true?

Correct Answer
verified

Which of the following statements regarding FICA taxes is true?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified
$26,010
An...
View Answer

Harrison received a qualified dividend. Without knowing any additional facts, which of the following statements is true regarding the rate at which the dividend will be taxed to Harrison?

Correct Answer
verified

Correct Answer
verified
Filing jointly will result in a "marriag...
View Answer

Exam 8: Individual Income Tax Computation and Tax Credits

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

Correct AnswerverifiedShow Answer

Akiko and Hitachi (married filing jointly for 2018) 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 $120,000. How much lifetime learning credit can they claim?

Correct Answerverified$560Answe...View AnswerShow Answer

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

The AMT exemption amount is phased-out for high income taxpayers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedRefund of $2,288.Answer compu...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Persephone has a regular tax liability of $12,475 and a tentative minimum tax of $11,500. Given just this information, what is her alternative minimum tax liability for the year?

Correct AnswerverifiedShow Answer

Which of the following statements concerning tax credits is true?

Correct AnswerverifiedShow Answer

Which of the following statements regarding FICA taxes is true?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct Answerverified$26,010An...View AnswerShow Answer

Harrison received a qualified dividend. Without knowing any additional facts, which of the following statements is true regarding the rate at which the dividend will be taxed to Harrison?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedFiling jointly will result in a "marriag...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified
$560
Answe...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Refund of $2,288.
Answer compu...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$26,010
An...
View Answer

Correct Answer
verified

Correct Answer
verified
Filing jointly will result in a "marriag...
View Answer