Exam 14: Special Tax Computation Methods, tax Credits, and Payment of Tax

Harley's tentative minimum tax is computed by multiplying the AMT tax rates by her

A credit is available to encourage employers to provide child care for employees.The employer can either operate its own child care facility for its employees or pay a separate qualified child care facility under contract.

All of the following are allowable deductions under the alternative minimum tax except

Qualified tuition and related expenses eligible for the American Opportunity Tax Credit are limited to those incurred the first two years of postsecondary education.

If an individual is liable for self-employment tax,a portion of the self-employment tax is

A taxpayer's tentative minimum tax exceeds his net income tax so he will be paying the alternative minimum tax this year.The taxpayer has a sole proprietorship through which he has earned general business credits.The taxpayer can reduce his AMT to the extent of his general business credits.

A couple has filed a joint tax return since they were first married.Because of self-employment income and significant investment income,they have made joint quarterly estimated tax payments.Before year-end the couple has divorced,and they will each file their own individual returns.The estimated payments made jointly while still married earlier in the year will be divided evenly between the two individual returns.

Evan and Barbara incurred qualified adoption expenses in 2015 of $6,000,and then incurred $9,000 more in 2016 when the adoption of their child became final.Their 2015 AGI was $110,000 and their 2016 AGI was $100,000.The allowable adoption credit is

Jorge has $150,000 net earnings from a sole proprietorship.Jorge's self-employment tax (rounded)for 2016 is

Tom and Anita are married,file a joint return with an AGI of $165,000,and have one dependent child,Tim,who is a first-time freshman in college.The following expenses are incurred and paid in 2016: What is the maximum education credit allowed to Tom and Anita?

Casualty and theft losses in excess of 10% of AGI are deductible for AMT purposes.

All of the following statements regarding self-employment income/tax are true except:

In 2016 Rita is divorced with one child.She has AGI of $20,000 resulting in a federal income tax liability of $260 and an earned income credit of $3,137.She has had $550 of federal income taxes withheld from her pay.Rita will receive a federal income refund of

Discuss actions a taxpayer can take if it is anticipated that his income taxes will be substantially underpaid in order to minimize penalties.

The alternative minimum tax applies to individuals only if it exceeds the taxpayer's regular income tax liability.

Jeffery and Cassie,who are married with modified AGI of $90,000,are sending their son to his first year of college.Their total tuition and related payments during 2015 amounted to $5,500.They have not taken advantage of any other type of tax benefit related to educational expenses.Their American Opportunity Tax Credit for 2016 is

Mark and Stacy are married,file a joint return,and have one child,age 3.Their combined AGI is $55,000.Mark and Stacy incur $3,500 of child-care expenses during the current year.Mark's employer reimburses him $1,500 under a qualified dependent care assistance plan.The child and dependent care credit is

A self-employed individual has earnings from his business of $300,000.For the earnings in excess of the $118,500,he will only have to pay the 2.9% Medicare Tax.

Layla earned $20,000 of general business credits from her sole proprietorship.Her regular tax liability is $45,000,and her tentative minimum tax is $49,000.During the current year Layla will apply general business credits of

In computing AMTI,adjustments are