Question 1

The maximum adoption credit is 50% of all qualified expenses.

Accepted Answer

A) True 
 B)False

Question 2

A qualifying individual for purposes of the credit for child and dependent care expenses includes a dependent or a spouse of the taxpayer who is incapable of caring for himself or herself.

Accepted Answer

A) True 
 B)False

Question 3

There are two types of education credits available,the American opportunity tax credit and the lifetime learning credit.

Accepted Answer

A) True 
 B)False

Question 4

There is no maximum amount for the adoption credit.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following statements is not true regarding the education credits?

Accepted Answer

A) If a dependent pays for qualified expenses,the expenses are deemed paid by the taxpayer. 
B) If a relative makes payments for qualified expenses directly to the institution on behalf of the student,the expenses are deemed paid by the student. 
C) If a student receives a scholarship that is excluded from gross income,that amount should reduce qualified expenses. 
D) Payments made using borrowed funds are not considered qualified expenses.

Question 6

In the case of the adoption credit,what special rules apply when adopting a child who is a citizen of another country?

Accepted Answer

The answer of In the case of the adoption credit,what...

Question 7

Which of the following statements is true about education credits?

Accepted Answer

A) A taxpayer may be eligible to claim the education credits regardless of their AGI amount. 
B) A taxpayer can use the same qualifying expenses for both the American opportunity tax and lifetime learning credits. 
C) A taxpayer cannot claim an American opportunity tax credit or lifetime learning credit in the same year he/she takes a tax-free distribution from a Coverdell Education Savings Account. 
D) The lifetime learning credit may be limited by AGI levels and may completely phase out when modified AGI exceeds a certain amount (the amount depending on the tax year).

Question 8

Which of the following statements regarding adoption credits is not true?

Accepted Answer

A) Qualified expenses do not include employer reimbursements. 
B) An eligible child may be up to the age of 18. 
C) The credit may be claimed regardless of the taxpayer's modified AGI amounts. 
D) Qualified expenses include adoption fees,attorney fees and court costs.

Question 9

What is the difference between a refundable tax credit and a nonrefundable tax credit? Use at least one example of each type of credit in your answer.

Accepted Answer

The answer of What is the difference between a refundable...

Question 10

Which of the following statements is not true with regard to the child and dependent care expense credit?

Accepted Answer

A) The maximum amount of expenses for one dependent is $3,000. 
B) Married taxpayers must file joint returns. 
C) A non-working spouse attending school full-time is deemed to have earned income of $250 per month for one qualifying person. 
D) The maximum amount of expenses for two or more dependents is $6,000.

Question 11

Waseem has $103,000 total taxable income,which includes $11,000 of taxable income from India.He paid $4,000 in foreign income taxes and his U.S.tax liability is $21,610.Waseem's foreign tax credit is: (Do not round interim calculations)

Accepted Answer

A) $0. 
B) $2,200. 
C) $2,308. 
D) $4,000.

Question 12

The maximum amount per year of dependent care expenses that can be used for calculating the credit for child and dependent care expenses is $6,000 for two or more qualifying individuals.

Accepted Answer

A) True 
 B)False

Question 13

Kylie is a single mom with two dependent children,Tanner,age 7 and Olivia,age 11.She has AGI of $36,000 and paid $5,300 to a qualified day care center for the two children.What amount of credit can Kylie receive for the child and dependent care credit?

Accepted Answer

A) $5,300. 
B) $1,060. 
C) $1,200. 
D) $1,272.

Question 14

A student can only receive the lifetime learning credit if he/she is enrolled in a degree program.

Accepted Answer

A) True 
 B)False

Question 15

Credit for child and dependent care expenses can only be claimed on a Form 1040.

Accepted Answer

A) True 
 B)False

Question 16

Guillermo and Felicia are married,file a joint return,and have one dependent child;Hannah,age 6.Guillermo has earned income of $38,000.Felicia was a full-time student (for 8 months)with no income.They paid a qualified day care center $4,800.What is the amount of their child and dependent care credit for the year?

Accepted Answer

A) $0. 
B) $460. 
C) $600. 
D) $4,800.

Question 17

Which of the following statements is false regarding the earned income credit (EIC)?

Accepted Answer

A) Maximum amount of the credit depends on the earned income and number of children. 
B) The credit is refundable. 
C) If certain requirements are met,a taxpayer may receive advance payments of EIC. 
D) A taxpayer without children cannot claim the credit.

Question 18

Chris and Sarah are married with three qualifying children.Their AGI is $25,000.How much is their EIC (use the EIC formula)? (Round your answer to the nearest dollar)

Accepted Answer

A) $1,105. 
B) $3,400. 
C) $6,093. 
D) $6,318.

Question 19

The retirement savings contributions credit is available for head of household taxpayers only.

Accepted Answer

A) True 
 B)False

Question 20

Tai and Song are ages 69 and 59,respectively,and file a joint return.They have AGI of $20,000 and received $2,000 in nontaxable social security benefits.How much can Tai and Song take as a credit for the elderly or the disabled?

Accepted Answer

A) $0. 
B) $1,125. 
C) $2,000. 
D) $7,500.

Exam 9: Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

The maximum adoption credit is 50% of all qualified expenses.

A qualifying individual for purposes of the credit for child and dependent care expenses includes a dependent or a spouse of the taxpayer who is incapable of caring for himself or herself.

There are two types of education credits available,the American opportunity tax credit and the lifetime learning credit.

There is no maximum amount for the adoption credit.

Which of the following statements is not true regarding the education credits?

In the case of the adoption credit,what special rules apply when adopting a child who is a citizen of another country?

Which of the following statements is true about education credits?

Which of the following statements regarding adoption credits is not true?

What is the difference between a refundable tax credit and a nonrefundable tax credit? Use at least one example of each type of credit in your answer.

Which of the following statements is not true with regard to the child and dependent care expense credit?

Waseem has $103,000 total taxable income,which includes $11,000 of taxable income from India.He paid $4,000 in foreign income taxes and his U.S.tax liability is $21,610.Waseem's foreign tax credit is: (Do not round interim calculations)

The maximum amount per year of dependent care expenses that can be used for calculating the credit for child and dependent care expenses is $6,000 for two or more qualifying individuals.

Kylie is a single mom with two dependent children,Tanner,age 7 and Olivia,age 11.She has AGI of $36,000 and paid $5,300 to a qualified day care center for the two children.What amount of credit can Kylie receive for the child and dependent care credit?

A student can only receive the lifetime learning credit if he/she is enrolled in a degree program.

Credit for child and dependent care expenses can only be claimed on a Form 1040.

Which of the following statements is false regarding the earned income credit (EIC) ?

Chris and Sarah are married with three qualifying children.Their AGI is $25,000.How much is their EIC (use the EIC formula) ? (Round your answer to the nearest dollar)

The retirement savings contributions credit is available for head of household taxpayers only.

Tai and Song are ages 69 and 59,respectively,and file a joint return.They have AGI of $20,000 and received $2,000 in nontaxable social security benefits.How much can Tai and Song take as a credit for the elderly or the disabled?