Exam 28: Special Tax Computation Methods, tax Credits, and Payment of Tax

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

In computing AMTI,tax preference items are

Kors Corporation has 30 employees and $5 million of gross receipts.Kors spends $15,000 for qualified structural improvements for access for the disabled.The disabled access credit is

Ivan has generated the following taxes and credits this year: How much general business credit will he apply to the current year tax liability?

In 2014 Rita is divorced with one child.She has AGI of $19,500 resulting in a federal income tax liability of $250 and an earned income credit of $3,038.She has had $550 of federal income taxes withheld from her pay.Rita will receive a federal income refund of

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

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

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

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

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.

Nick and Nicole are both 68 years old and file a joint return.They have AGI of $15,000 and receive nontaxable Social Security payments of $4,200 during the current year.What is the amount of the tax credit for the elderly?

Nonrefundable credits may offset tax liability but may not result in additional payments to the taxpayer.

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

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

Evan and Barbara incurred qualified adoption expenses in 2013 of $6,000,and then incurred $7,500 more in 2014 when the adoption of their child became final.Their 2013 AGI was $110,000 and their 2014 AGI was $100,000.The allowable adoption credit is

Assume you plan to volunteer at a Volunteer Income Tax Assistance (VITA)program for low income taxpayers and wish to prepare so you can help your clients achieve the maximum tax savings.Briefly discuss tax credits with which you should become familiar.

The foreign tax credit is equal to the smaller of foreign taxes paid or accrued in the tax year or the portion of the U.S.income tax liability attributable to the income earned in all foreign countries.

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

Taxpayers with income below phase-out amounts are allowed a child credit of $1,000 for each qualifying child under age 17.

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?