Question 1

The earned income credit is available only to taxpayers with qualifying children.

Accepted Answer

A) True 
 B)False  False

Question 2

Mingming and Xavier,unrelated single taxpayers,have each incurred a $1,000 expenditure.Before considering this expenditure,Mingming has taxable income of $600,000 and Xavier has taxable income of $32,000.Assume the expenditure qualifies as either a tax deduction or a 25% credit.Which of the following statements is correct?

Accepted Answer

A) Mingming will prefer the credit,but Xavier will prefer the deduction. 
B) Mingming will prefer the deduction,but Xavier will prefer the credit. 
C) Both taxpayers will prefer the credit. 
D) Both taxpayers will prefer the deduction. 
A) Mingming will prefer the credit,but Xavier will prefer the deduction. 
B) Mingming will prefer the deduction,but Xavier will prefer the credit. 
C) Both taxpayers will prefer the credit. 
D) Both taxpayers will prefer the deduction. B

Question 3

Mr.and Mrs.Lewis have an alternative minimum tax base of $312,000 in 2019.Their tentative minimum tax will be

Accepted Answer

A) $81,120. 
B) $87,360. 
C) $52,078. 
D) $83,464. 
A) $81,120. 
B) $87,360. 
C) $52,078. 
D) $83,464. D

Question 4

A taxpayer supports an elderly relative who satisfies the Sec.152 criteria for "qualifying relative." The taxpayer may claim a $500 tax credit.

Accepted Answer

A) True 
 B)False

Question 5

Current year foreign taxes paid exceed the ceiling based on U.S.tax attributable to foreign source income.These excess foreign tax credits

Accepted Answer

A) are lost. 
B) can be carried forward ten years only. 
C) can be carried back one year and then carried forward ten years. 
D) can be carried back one year and then carried forward twenty years. 
A) are lost. 
B) can be carried forward ten years only. 
C) can be carried back one year and then carried forward ten years. 
D) can be carried back one year and then carried forward twenty years.

Question 6

For purposes of the child and dependent care credit,qualifying employment-related expenses cannot include payments to a relative.

Accepted Answer

A) True 
 B)False

Question 7

The adoption credit based on qualified adoption expenses is generally allowed in the year the adoption is finalized.

Accepted Answer

A) True 
 B)False

Question 8

If estimated tax payments equal or exceed 100% of the actual tax liability for the prior year,there is generally (assuming AGI less than or equal to $150,000)no penalty for underpayment of estimated taxes.

Accepted Answer

A) True 
 B)False

Question 9

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.

Accepted Answer

A) True 
 B)False

Question 10

Ava has net earnings from self-employment of $125,000.She also earned salary of $170,000 from a job held earlier in the year.How much Additional Medicare Tax will be owed on the self-employment income?

Accepted Answer

A) $0 
B) $769 
C) $855 
D) $3,625 
A) $0 
B) $769 
C) $855 
D) $3,625

Question 11

Tanya has earnings from self-employment of $240,000,resulting in self-employment tax of $22,908 and Additional Medicare Tax of $360.Due to these taxes,Tanya will be allowed a deduction for AGI of

Accepted Answer

A) $11,634. 
B) $23,268. 
C) $11,454. 
D) $22,908. 
A) $11,634. 
B) $23,268. 
C) $11,454. 
D) $22,908.

Question 12

For purposes of the limitation on qualifying expenses for the child and dependent care credit,a spouse who is either a full-time student or is incapacitated is deemed to have earned income of $250 per month,or $500 per month if there are two or more qualifying individuals in the household.

Accepted Answer

A) True 
 B)False

Question 13

If a taxpayer's AGI is greater than $150,000,no penalty will be imposed if the taxpayer pays estimated tax payments in 2019 equal to what percentage of 2018's income tax liability?

Accepted Answer

A) 100% 
B) 90% 
C) 110% 
D) 120% 
A) 100% 
B) 90% 
C) 110% 
D) 120%

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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?

Accepted Answer

The answer of Sam and Megan are married with two...

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

A larger work opportunity credit is available for employers who hire any veteran of the U.S.military.

Accepted Answer

A) True 
 B)False

Question 18

The child and dependent care credit is available to any parent who pays for child care for a child under age 13.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) $300. 
B) $600. 
C) $700. 
D) $1,200. 
A) $300. 
B) $600. 
C) $700. 
D) $1,200.

Question 20

In calculating a taxpayer's AMT,adjustments for timing differences will be made for all of the following assets except for

Accepted Answer

A) incentive stock options. 
B) an office building placed in service in 2015. 
C) machinery placed in service in 2015 (bonus depreciation is not applicable). 
D) All of the above will require a timing adjustment for AMT. 
A) incentive stock options. 
B) an office building placed in service in 2015. 
C) machinery placed in service in 2015 (bonus depreciation is not applicable). 
D) All of the above will require a timing adjustment for AMT.

Exam 30: Special Tax Computation Methods,tax Credits,and Payment of Tax

The earned income credit is available only to taxpayers with qualifying children.

Mr.and Mrs.Lewis have an alternative minimum tax base of $312,000 in 2019.Their tentative minimum tax will be

A taxpayer supports an elderly relative who satisfies the Sec.152 criteria for "qualifying relative." The taxpayer may claim a $500 tax credit.

Current year foreign taxes paid exceed the ceiling based on U.S.tax attributable to foreign source income.These excess foreign tax credits

For purposes of the child and dependent care credit,qualifying employment-related expenses cannot include payments to a relative.

The adoption credit based on qualified adoption expenses is generally allowed in the year the adoption is finalized.

If estimated tax payments equal or exceed 100% of the actual tax liability for the prior year,there is generally (assuming AGI less than or equal to $150,000)no penalty for underpayment of estimated taxes.

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.

Ava has net earnings from self-employment of $125,000.She also earned salary of $170,000 from a job held earlier in the year.How much Additional Medicare Tax will be owed on the self-employment income?

Tanya has earnings from self-employment of $240,000,resulting in self-employment tax of $22,908 and Additional Medicare Tax of $360.Due to these taxes,Tanya will be allowed a deduction for AGI of

For purposes of the limitation on qualifying expenses for the child and dependent care credit,a spouse who is either a full-time student or is incapacitated is deemed to have earned income of $250 per month,or $500 per month if there are two or more qualifying individuals in the household.

If a taxpayer's AGI is greater than $150,000,no penalty will be imposed if the taxpayer pays estimated tax payments in 2019 equal to what percentage of 2018's income tax liability?

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

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

A larger work opportunity credit is available for employers who hire any veteran of the U.S.military.

The child and dependent care credit is available to any parent who pays for child care for a child under age 13.

In calculating a taxpayer's AMT,adjustments for timing differences will be made for all of the following assets except for

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