Question 1

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 2

Discuss the tax planning techniques available to a U.S.citizen who is on a foreign job assignment.

Accepted Answer

The answer of Discuss the tax planning techniques available to...

Question 3

In 2015 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

Accepted Answer

A) $0. 
B) $8,000. 
C) $53,600. 
D) $83,400.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Individuals without children are eligible for the earned income credit if they meet all the following conditions except

Accepted Answer

A) file married filing separately. 
B) at tax year end are at least age 25 but not more than age 64. 
C) for the tax year are not a dependent of another taxpayer. 
D) the United States is their principal place of residence for more than one-half of the tax year.

Question 7

Jay and Cara's daughter is starting her freshman year of college.Jay and Cara will be able to claim the American Opportunity Tax Credit for a percentage of the cost of tuition,required fees and course materials,but the room and board charges will not qualify for the credit.

Accepted Answer

A) True 
 B)False

Question 8

Taxpayers with income below phase-out amounts are allowed a child credit of $1,000 for each qualifying child under age 18.

Accepted Answer

A) True 
 B)False

Question 9

Self-employed individuals are subject to the self-employment tax if their net earnings are more than the personal exemption amount.

Accepted Answer

A) True 
 B)False

Question 10

Marvin and Pamela are married,file a joint return,and have two children,ages 9 and 11.Their combined AGI is $65,000.Marvin's earned income is $40,000; Pamela's is $25,000.They incur $6,500 of child-care expenses to enable them to be employed during the current year.Their child and dependent care credit is

Accepted Answer

A) $1,200. 
B) $1,300. 
C) $1,800. 
D) $6,000.

Question 11

Kerry is single and has AGI of $25,000 in 2015.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?

Accepted Answer

A) $200 
B) $400 
C) $800 
D) $1,000

Question 12

Nonrefundable tax credits

Accepted Answer

A) only offset a taxpayer's tax liability. 
B) may only be used if the taxpayer is receiving a refund. 
C) can be carried back two years and carried forward 15 years if they exceed tax liability in the current year. 
D) allow the excess over the taxpayer's tax liability to be paid to the taxpayer.

Question 13

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

Question 14

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

Accepted Answer

A) research credit. 
B) disabled access credit. 
C) foreign tax credit. 
D) credit for rehabilitation expenditure.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) $2,000. 
B) $2,250. 
C) $2,500. 
D) $3,000.

Question 17

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?

Accepted Answer

A) $2,000 
B) $14,000 
C) $16,000 
D) $42,000

Question 18

In computing AMTI,all of the following must be added back except

Accepted Answer

A) home mortgage interest (on mortgage in effect since home was purchased). 
B) state income taxes. 
C) unreimbursed employee business expenses. 
D) property taxes on an individual's home.

Question 19

A taxpayer who paid AMT in prior years,but is not subject to the AMT in the current year,may be entitled to an AMT credit against his regular tax liability in the current year.

Accepted Answer

A) True 
 B)False

Question 20

Joan earns $110,000 in her job as a physician's assistant.She also has her own business selling cosmetics.This business generated $10,000 of earnings.What is Joan's self-employment tax for 2015?

Accepted Answer

A) $1,530 
B) $1,314 
C) $1,412 
D) $268

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

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.

Discuss the tax planning techniques available to a U.S.citizen who is on a foreign job assignment.

In 2015 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

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

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

Individuals without children are eligible for the earned income credit if they meet all the following conditions except

Jay and Cara's daughter is starting her freshman year of college.Jay and Cara will be able to claim the American Opportunity Tax Credit for a percentage of the cost of tuition,required fees and course materials,but the room and board charges will not qualify for the credit.

Taxpayers with income below phase-out amounts are allowed a child credit of $1,000 for each qualifying child under age 18.

Self-employed individuals are subject to the self-employment tax if their net earnings are more than the personal exemption amount.

Kerry is single and has AGI of $25,000 in 2015.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?

Nonrefundable tax credits

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?

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

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

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?

In computing AMTI,all of the following must be added back except

A taxpayer who paid AMT in prior years,but is not subject to the AMT in the current year,may be entitled to an AMT credit against his regular tax liability in the current year.

Joan earns $110,000 in her job as a physician's assistant.She also has her own business selling cosmetics.This business generated $10,000 of earnings.What is Joan's self-employment tax for 2015?