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

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.

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.

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

A wage cap does not exist for which of the following self-employment taxes?

Which statement is correct?

Jake and Christina are married and file a joint return for 2014 with taxable income of $100,000 and tax preferences and adjustments of $20,000 for AMT purposes.Their regular tax liability is $16,713.What is the amount of their total tax liability?

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

John has $55,000 net earnings from a sole proprietorship.John is also employed by a major corporation and is paid $25,000.John's self-employment tax (rounded)for 2014 is

A corporation has $100,000 of U.S.source taxable income and $300,000 of foreign source taxable income from countries X and Y for a total worldwide taxable income of $400,000.Countries X and Y levy a total of $60,000 in foreign taxes upon the foreign source taxable income.U.S.taxes before credits are $140,000.The foreign tax credit limitation is

If an individual is classified as an employee,the employer is required to withhold the employee's share of the FICA tax and to provide a matching amount.

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?

Kerry is single and has AGI of $25,000 in 2014.During the year he contributes $5,000 to his Roth IRA.What is the amount of qualified retirement savings contributions credit to which he is entitled?

Bud and Stella are married,file a joint return,and have one child,age 3.Their combined AGI is $35,000.Bud and Stella incur $3,500 of child-care expenses during the current year.The child and dependent care credit is

In 2014 Charlton and Cindy have alternative minimum taxable income of $130,000 and file a joint return.For purposes of computing the alternative minimum tax,their exemption is

Research expenses eligible for the research credit include costs that are incident to the development or improvement of a product or component.

Sonya started a self-employed consulting business in the last part of the year and earned $40,000.She had been employed as manager in a consulting firm prior to starting her own business and had earned $125,000. (a)What is Sonya's self employment tax for 2014? (b)What is Sonya's deduction for AGI for the SE tax?