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Exam 8: Individual Income Tax Computation and Tax Credits

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Question 41

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All capital gains are taxed at preferential rates.

A) True
B) False

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Question 42

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Demeter is a single taxpayer. Her AGI in 2019 is $209,200. Demeter may claim a child tax credit for her daughter Persephone. What amount of child tax credit is Demeter entitled to claim after any applicable phase-out?

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$1,500.
$2,000 - 500...

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Question 43

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Johann had a gross tax liability of $22,508 in 2019, but his employer only withheld taxes of $19,500. Johann's gross tax liability was $21,000 in 2018. Calculate Johann's under/overpayment in each quarter for 2019 tax purposes.

Paul and Melissa plan on filing jointly in 2019. For the year, the couple reported taxable income of $130,000. What is their gross tax liability? (Use Tax rate schedules.)

Harrison received a qualified dividend. Without knowing any additional facts, which of the following statements is true regarding the rate at which the dividend will be taxed to Harrison?

Which of the following is not one of the general tax credit categories?

The AMT exemption amount is phased out for high-income taxpayers.

Sheryl's AGI is $250,000. Her current tax liability is $52,068. Last year, her tax liability was $48,722. She will not owe underpayment penalties if her total estimated tax payments are at least which of the following (rounded) amounts? (Assume she makes the required payments each quarter.)

Hestia (age 17) is claimed as a dependent by her parents, Rhea and Chronus. In 2019, Hestia received $1,000 of interest income from a corporate bond that she owns. In addition, she has earned income of $200. What is her taxable income for 2019?

Keith and Nicole are married filing jointly, with two daughters who qualify as dependents. Their gross income for 2019 is $25,500. Are they required to file a tax return? How do you know this without memorizing the gross income thresholds? In 2019, the standard deduction for taxpayers filing a joint return is $24,400.

Apollo is single and his AMT base is $100,250. This amount includes $500 of qualified dividends (the dividends were taxed at 15 percent in determining the regular tax liability). What is Apollo's tentative minimum tax?

When applying credits against a taxpayer's gross tax liability, nonrefundable personal credits are applied first, then business credits, and finally refundable personal credits.

Jamie is single. In 2019, she reported $100,000 of taxable income, including a long-term capital gain of $5,000. What is her gross tax liability, rounded to the nearest whole dollar amount? (Use the Tax rate schedules.)

The taxable income levels in the married filing jointly tax rate schedule are ________ those in the married filing separately schedule.

Which of the following statements accurately describes the alternative minimum tax rate(s) ?

Atlas earned $17,300 from his sole proprietorship in 2019. This was his only source of income. How much in self-employment taxes will Atlas be able to deduct?

Linda is a qualifying widow in 2019. In 2019, she reports $80,000 of taxable income (all ordinary) . What is her gross tax liability using the tax rate schedules? (Tax rate schedules.)

Assume Georgianne underpaid her estimated tax liability by $150 in the first quarter, $500 in the second quarter, $400 in the third quarter, and $200 in the fourth quarter. Calculate her underpayment penalty for the year, assuming the federal short-term interest rate is 5 percent.

Business credits are generally refundable credits.

Clarissa's gross tax liability for 2019 is $1,300. She has a $1,500 nonrefundable personal tax credit, a $750 business tax credit, and a $400 refundable personal tax credit. Her employer withheld $1,000 from her pay for taxes. What is her net tax due or refund for this year?