Question 1

An example of an AMT tax preference item is the excess of MACRS depreciation on equipment over depreciation computed by using the the 150% declining balance method.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The maximum amount of the American Opportunity Tax Credit for each qualified student is

Accepted Answer

A) $1,500. 
B) $2,000. 
C) $2,500. 
D) $3,000.

Question 4

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.

Accepted Answer

The answer of Assume you plan to volunteer at a...

Question 5

For purposes of the limitation on qualifying expenses for the child and dependent care credit,a spouse who is either a full-time student or is incapacitated is deemed to have earned income of $250 per month,or $500 per month if there are two or more qualifying individuals in the household.

Accepted Answer

A) True 
 B)False

Question 6

A larger work opportunity credit is available for employers who hire any veteran of the U.S.military.

Accepted Answer

A) True 
 B)False

Question 7

Dwayne has general business credits totaling $30,000 before limitation.His regular tax liability is $83,000 and his tentative minimum tax is $79,000.What amount of general business credit can Dwayne take this year?

Accepted Answer

A) $4,000 
B) $14,500 
C) $25,000 
D) $30,000

Question 8

Margo and Jonah have two children,ages 13 and 17.Their modified AGI is $120,500.What is their child tax credit?

Accepted Answer

A) $450 
B) $900 
C) $1,000 
D) $2,000

Question 9

Jake and Christina are married and file a joint return for 2017 with taxable income of $100,000 and tax preferences and adjustments of $20,000 for AMT purposes.Their regular tax liability is $16,478.What is the amount of their total tax liability?

Accepted Answer

A) $7,248 
B) $9,230 
C) $16,478 
D) $25,708

Question 10

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

Accepted Answer

A) a for AGI deduction. 
B) from AGI as an itemized deduction. 
C) a Schedule C business expense. 
D) nondeductible.

Question 11

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 12

Mortgage interest paid on a mortgage obtained to buy a principal residence,deductible for regular income tax purposes,is also an allowable deduction for AMT.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A taxpayer will be ineligible for the earned income credit if he or she has disqualified investment income of more than $3,450 in 2017.Disqualified income includes all the following except

Accepted Answer

A) net capital gains. 
B) tax-exempt interest. 
C) net rental income. 
D) self-employment income.

Question 15

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

Accepted Answer

A) Social Security tax 
B) FICA 
C) FUTA 
D) Medicare hospital insurance

Question 16

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 17

In the fall of 2017,James went back to school to earn a master of accountancy degree.He incurred $7,000 of qualified educational expenses and his modified AGI for the year was $40,000.His Lifetime Learning Credit is

Accepted Answer

A) $1,000. 
B) $1,400. 
C) $1,800. 
D) $2,500.

Question 18

A taxpayer at risk for AMT should consider which of the following decisions?

Accepted Answer

A) investing in corporate bonds 
B) timing of state income tax estimated payments 
C) choosing a depreciation method for a new business building 
D) All of the above.

Question 19

The alternative minimum tax applies to individuals only if it exceeds the taxpayer's regular income tax liability.

Accepted Answer

A) True 
 B)False

Question 20

The general business credit may not exceed the net income tax minus the greater of the tentative minimum tax or

Accepted Answer

A) 20% of the net regular tax liability above $20,000. 
B) 25% of the net regular tax liability above $20,000. 
C) 20% of the net regular tax liability above $25,000. 
D) 25% of the net regular tax liability above $25,000.

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

An example of an AMT tax preference item is the excess of MACRS depreciation on equipment over depreciation computed by using the the 150% declining balance method.

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

The maximum amount of the American Opportunity Tax Credit for each qualified student 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.

For purposes of the limitation on qualifying expenses for the child and dependent care credit,a spouse who is either a full-time student or is incapacitated is deemed to have earned income of $250 per month,or $500 per month if there are two or more qualifying individuals in the household.

A larger work opportunity credit is available for employers who hire any veteran of the U.S.military.

Dwayne has general business credits totaling $30,000 before limitation.His regular tax liability is $83,000 and his tentative minimum tax is $79,000.What amount of general business credit can Dwayne take this year?

Margo and Jonah have two children,ages 13 and 17.Their modified AGI is $120,500.What is their child tax credit?

Jake and Christina are married and file a joint return for 2017 with taxable income of $100,000 and tax preferences and adjustments of $20,000 for AMT purposes.Their regular tax liability is $16,478.What is the amount of their total tax liability?

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

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?

Mortgage interest paid on a mortgage obtained to buy a principal residence,deductible for regular income tax purposes,is also an allowable deduction for AMT.

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

A taxpayer will be ineligible for the earned income credit if he or she has disqualified investment income of more than $3,450 in 2017.Disqualified income includes all the following except

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

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

In the fall of 2017,James went back to school to earn a master of accountancy degree.He incurred $7,000 of qualified educational expenses and his modified AGI for the year was $40,000.His Lifetime Learning Credit is

A taxpayer at risk for AMT should consider which of the following decisions?

The alternative minimum tax applies to individuals only if it exceeds the taxpayer's regular income tax liability.

The general business credit may not exceed the net income tax minus the greater of the tentative minimum tax or