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

Bob's income can vary widely from year-to-year because much of his compensation comes from sales commissions and bonuses.It generally is in the $200,000 to $300,000 range.To minimize the risk of underpayment penalties for estimated tax,he should pay in,through payroll withholding and estimated tax payments,100% of the prior year tax liability.

The general business credit includes all of the following with the exception of

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 $48,000.

Jorge has $150,000 of self-employment earnings from a sole proprietorship.Jorge's self-employment tax (rounded)for 2017 is

In lieu of a foreign tax credit,a taxpayer may elect to take a deduction for foreign taxes paid or accrued.

Lara started a self-employed consulting business in the last part of the year and earned $60,000 of self- employment earnings.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 2017,if any? (b)What is Lara's deduction for AGI for the Additional Medicare Tax?

Carlotta,Inc. ,has $50,000 foreign-source income and $150,000 worldwide income.Its U.S.tax on its worldwide income is $42,000,and it paid foreign taxes of $16,000.What is the corporation's foreign tax credit?

During the year,Jim incurs $500,000 of rehabilitation expenditures in connection with a certified historic structure used in his business.The adjusted basis of the structure was $400,000 at the time the rehabilitation began. a.What is the amount,if any,of his rehabilitation credit for the year? b.What is the depreciable basis of the rehabilitation expenditures?

Lavonne has a regular tax liability of $13,239 on taxable income of $70,000.She also has tax preferences of $25,000 and positive adjustments attributable to limitations on itemized deductions of $15,000.Lavonne is single and takes a $4,050 personal exemption for herself only.Lavonne's alternative minimum tax for 2017 is

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

One-half of the self-employment tax imposed is allowed as a for AGI deduction.

To claim the Lifetime Learning Credit,a student must take at least one-half of a full-time course load during the year.

A credit for rehabilitation expenditures is available to a business for the purchase price of a building originally placed in service before 1936.

Which of the following statements is incorrect regarding qualifying criteria for the health insurance premium tax credit?

ChocoHealth Inc.is developing new chocolate products providing abundant health benefits at low calorie counts.For the past three years,it spent an average of $500,000 per year on research.ChocoHealth has spent $900,000 on research.The company has elected the simplified credit.For the current year,it will earn a research credit of

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

The health insurance premium assistance credit is designed to help lower and middle income taxpayers who purchase their own health insurance directly from an insurance company or through a state or federal exchange.

Annie has taxable income of $100,000,a regular tax liability of $20,982,a positive AMT adjustment due to limitations on itemized deductions of $20,000,and tax preferences of $25,000 in 2016.Annie is single and takes a $4,050 personal exemption for herself only.What is Annie's AMT for 2016?

If a taxpayer's AGI is greater than $150,000,no penalty will be imposed if the taxpayer pays estimated tax payments in 2017 equal to what percentage of 2016's income tax liability?