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

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

The qualified retirement savings contributions credit is based on a maximum contribution of $2,000.

Jorge has $150,000 net earnings from a sole proprietorship. Jorge's self-employment tax (rounded) for 2015 is

Lara started a self-employed consulting business in the last part of the year and earned $60,000 of self- employment income. She had been employed as manager in a consulting firm prior to starting her own business and had earned $175,000. (a) What is Lara's Additional Medicare Tax for 2015, if any? (b) What is Lara's deduction for AGI for the Additional Medicare Tax?

The nonrefundable disabled access credit is available to eligible small businesses for expenditures incurred to make existing business facilities accessible to disabled individuals.

In computing AMTI, adjustments are

A taxpayer at risk for AMT should consider which of the following decisions?

If an individual is an employee and also has self-employment income, the maximum tax base for computing self-employment tax is reduced by the wages that are subject to the FICA tax.

Timothy and Alice, who are married with modified AGI of $90,000, are sending their daughter to her first year of college. Their total tuition and related payments during the year amounted to $13,000. In addition, their daughter received a $10,000 scholarship to cover tuition. They have not taken advantage of any other type of tax benefit related to educational expenses. Their American Opportunity Tax Credit is

Beth and Jay project the following taxes for the current year: How much in estimated tax payments (including withholding from wages and quarterly estimated payments) should the taxpayers pay this year in order to avoid underpayment penalties under the following assumptions regarding the preceding tax year? a. Preceding tax year-AGI of $140,000 and total taxes of $36,000. b. Preceding tax year-AGI of $155,000 and total taxes of $50,000.

In computing AMTI, tax preference items are

All tax-exempt bond interest income is classified as an AMT preference.

When a husband and wife file a joint return and both have self-employment income, the self-employment tax must be computed separately.

Joe, who is single with modified AGI of $84,000, is sending his son to his first year of college. The total tuition and related payments during the year amounted to $18,000. Joe has not taken advantage of any other type of tax benefit related to educational expenses. His American Opportunity Tax Credit is

All of the following statements are true regarding the Lifetime Learning Credit except which one?

Sam and Megan are married with two dependent children. Both Sam and Megan work, earning $50,000 and $55,000, respectively. Their AGI totals $110,000. They incur $6,500 of qualifying child care expenses of which $2,500 is reimbursed by Megan's dependent care program at work. What is the amount of their child and dependent care credit?

A taxpayer will be ineligible for the earned income credit if he or she has disqualified investment income of more than $3,400 in 2015. Disqualified income includes all the following except

If an employee has more than one employer during the year, all employers must withhold federal income taxes but only one employer must withhold FICA tax.

A taxpayer acquired an office building to be used in her business this year. For AMT purposes, depreciation must be re-calculated using the straight-line method over 40 years.

For purposes of the AMT, the standard deduction, but not the personal and dependency exemptions, is allowed.