Question 1

In 2014, Athena reported $37,500 of taxable income. Of this, $32,500 came from her work at the local library and the remaining $5,000 was from capital gains to be taxed at preferential rates. Compute her tax liability for 2014 as a single taxpayer.

Accepted Answer

The answer of In 2014, Athena reported $37,500 of taxable...

Question 2

The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount of qualified expenses.

Accepted Answer

A) True 
 B)False

Question 3

Assuming the kiddie tax applies, what amount of a child's income is subject to the kiddie tax?

Accepted Answer

A)   All of it
B)   All of the unearned income
C)   The net unearned income
D)   Taxable income less the standard deductionE) None of the above
F) A) and B)

Question 4

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Accepted Answer

A)   Taxpayers who have paid their full tax liability by the original tax return due date are protected from underpayment penalties.
B)   Taxpayers who have paid their full tax liability by the extended tax return due date are protected from underpayment penalties.
C)   Taxpayers who have uneven income streams can pay estimated tax quarterly in uneven amounts and not be susceptible to underpayment penalties.
D)   Taxpayers who have paid their required amount of estimated tax, even though not on time, are protected from underpayment penalties.E) B) and D)
F) B) and C)

Question 5

Harmony reports a regular tax liability of $15,000 and tentative minimum tax of $17,000. Given just this information, what is her alternative minimum tax liability for the year?

Accepted Answer

A)   $0
B)   $2,000
C)   $15,000
D)   $17,000E) C) and D)
F) B) and D)

Question 6

Maria and Tony are married. They are preparing to file their 2014 tax return. If they were to file as single taxpayers, Maria and Tony would report $40,000 and $60,000 of taxable income, respectively. On their joint tax return, their taxable income is $100,000. How much of a marriage penalty or benefit will Maria and Tony experience in 2014?

Accepted Answer

No marriag...

Question 7

If both spouses of a married couple earn roughly equivalent wages, the couple is likely to pay a marriage penalty due to the nature of the tax rate schedules.

Accepted Answer

A) True 
 B)False

Question 8

In 2014, Maia (who files as a head of household)  reported regular taxable income of $115,000. She itemized her deductions, deducting $8,000 in charitable contributions and $3,000 in state income taxes. She claimed exemptions for herself and her son, Hermes, ($3,900 each) . What is Maia's alternative minimum taxable income?

Accepted Answer

A)   $118,000
B)   $126,000
C)   $133,900
D)   $125,900E) A) and C)
F) All of the above

Question 9

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) ?

Accepted Answer

A)   $46,861
B)   $48,722
C)   $51,547
D)   $53,594E) B) and D)
F) C) and D)

Question 10

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Costa is a single taxpayer. His regular tax liability was $38,000. For 2014, he reported $190,000 of alternative minimum taxable income. What is his alternative minimum tax? [Use 2014 AMT Exemption amount]

Accepted Answer

The answer of Costa is a single taxpayer. His regular...

Question 13

Employees are allowed to deduct a portion of the FICA taxes they pay.

Accepted Answer

A) True 
 B)False

Question 14

Henry and Janice are married and file jointly. They have an AGI (and modified AGI) of $290,000, which includes $90,000 of salary, $170,000 of active business income, $10,000 of interest income, $15,000 of dividends, and $5,000 of long-term capital gains. What is Henry and Janice's Net Investment Income tax liability this year, rounded to the nearest whole dollar amount?

Accepted Answer

The answer of Henry and Janice are married and file...

Question 15

If an employer withholds taxes from an employee, in general, when are these taxes treated as paid to the IRS?

Accepted Answer

A)   As withheld
B)   As the employee requests on his/her W-4 form
C)   Evenly throughout the year
D)   On April 15E) B) and C)
F) C) and D)

Question 16

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Accepted Answer

A)   An extension of time to file the tax return protects a taxpayer from late payment penalties as long as the tax is paid by the extended due date of the return.
B)   The penalty rate for late filing penalties is less than the penalty rate for late payment penalties.
C)   If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return, the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself.
D)   None of theseE) A) and B)
F) None of the above

Question 17

Taxpayers are generally allowed to carry back and/or carry forward unused business credits.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following tax credits is fully refundable?

Accepted Answer

A)   American opportunity credit
B)   Dependent care credit
C)   Earned income credit
D)   None of theseE) C) and D)
F) All of the above

Question 19

Baker earned $225,000 of salary as an employee in 2014. How much should his employer have withheld from his paycheck for FICA taxes (rounded to the nearest whole dollar amount) ?

Accepted Answer

A)   $10,742
B)   $10,517
C)   $7,254
D)   $17,213E) All of the above
F) A) and C)

Question 20

Jerusha is married and she files a separate tax return in 2014. She claims two exemptions (2 × 3,950 = $7,900). She claimed the standard deduction for regular tax purposes ($6,200). She had no other adjustments. Her regular taxable income was $67,800. What is Jerusha's AMTI?

Accepted Answer

The answer of Jerusha is married and she files a...

Exam 7: Individual Income Tax Computation and Tax Credits

Harmony reports a regular tax liability of $15,000 and tentative minimum tax of $17,000. Given just this information, what is her alternative minimum tax liability for the year?

Correct Answer
verified

Assuming the kiddie tax applies, what amount of a child's income is subject to the kiddie tax?

Correct Answer
verified

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Correct Answer
verified

Jerusha is married and she files a separate tax return in 2014. She claims two exemptions (2 × 3,950 = $7,900). She claimed the standard deduction for regular tax purposes ($6,200). She had no other adjustments. Her regular taxable income was $67,800. What is Jerusha's AMTI?

Correct Answer
verified

Employees are allowed to deduct a portion of the FICA taxes they pay.

Correct Answer
verified

If an employer withholds taxes from an employee, in general, when are these taxes treated as paid to the IRS?

Correct Answer
verified

Correct Answer
verified

The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount of qualified expenses.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Correct Answer
verified

If both spouses of a married couple earn roughly equivalent wages, the couple is likely to pay a marriage penalty due to the nature of the tax rate schedules.

Correct Answer
verified

In 2014, Athena reported $37,500 of taxable income. Of this, $32,500 came from her work at the local library and the remaining $5,000 was from capital gains to be taxed at preferential rates. Compute her tax liability for 2014 as a single taxpayer.

Correct Answer
verified

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) ?

Correct Answer
verified

Costa is a single taxpayer. His regular tax liability was $38,000. For 2014, he reported $190,000 of alternative minimum taxable income. What is his alternative minimum tax? [Use 2014 AMT Exemption amount]

Correct Answer
verified

Baker earned $225,000 of salary as an employee in 2014. How much should his employer have withheld from his paycheck for FICA taxes (rounded to the nearest whole dollar amount) ?

Correct Answer
verified

Which of the following tax credits is fully refundable?

Correct Answer
verified

Taxpayers are generally allowed to carry back and/or carry forward unused business credits.

Correct Answer
verified

Correct Answer
verified
No marriag...
View Answer

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Correct Answer
verified

Exam 7: Individual Income Tax Computation and Tax Credits

Harmony reports a regular tax liability of $15,000 and tentative minimum tax of $17,000. Given just this information, what is her alternative minimum tax liability for the year?

Correct AnswerverifiedShow Answer

Assuming the kiddie tax applies, what amount of a child's income is subject to the kiddie tax?

Correct AnswerverifiedShow Answer

Which of the following statements about estimated tax payments and underpayment penalties is true for individual taxpayers?

Correct AnswerverifiedShow Answer

Jerusha is married and she files a separate tax return in 2014. She claims two exemptions (2 × 3,950 = $7,900). She claimed the standard deduction for regular tax purposes ($6,200). She had no other adjustments. Her regular taxable income was $67,800. What is Jerusha's AMTI?

Correct AnswerverifiedShow Answer

Employees are allowed to deduct a portion of the FICA taxes they pay.

Correct AnswerverifiedShow Answer

If an employer withholds taxes from an employee, in general, when are these taxes treated as paid to the IRS?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The child and dependent care credit entitles qualifying taxpayers to a credit equal to the full amount of qualified expenses.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The kiddie tax does not apply to children over 24 years old at the end of the tax year.

Correct AnswerverifiedShow Answer

If both spouses of a married couple earn roughly equivalent wages, the couple is likely to pay a marriage penalty due to the nature of the tax rate schedules.

Correct AnswerverifiedShow Answer

In 2014, Athena reported $37,500 of taxable income. Of this, $32,500 came from her work at the local library and the remaining $5,000 was from capital gains to be taxed at preferential rates. Compute her tax liability for 2014 as a single taxpayer.

Correct AnswerverifiedShow Answer

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) ?

Correct AnswerverifiedShow Answer

Costa is a single taxpayer. His regular tax liability was $38,000. For 2014, he reported $190,000 of alternative minimum taxable income. What is his alternative minimum tax? [Use 2014 AMT Exemption amount]

Correct AnswerverifiedShow Answer

Baker earned $225,000 of salary as an employee in 2014. How much should his employer have withheld from his paycheck for FICA taxes (rounded to the nearest whole dollar amount) ?

Correct AnswerverifiedShow Answer

Which of the following tax credits is fully refundable?

Correct AnswerverifiedShow Answer

Taxpayers are generally allowed to carry back and/or carry forward unused business credits.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNo marriag...View AnswerShow Answer

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Correct AnswerverifiedShow Answer

Correct Answer
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No marriag...
View Answer

Correct Answer
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