FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Individual Income Tax Computation and Tax Credits

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

True/False

Review LaterAdd Note

Review Later

To qualify for the earned income credit, the taxpayer must have a qualified dependent.

A) True
B) False

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

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.)

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

E) A) and B)
F) A) and C)

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

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

Selene made $54,300 in 2020 working at the local burger joint, Moon Café. How much should her employer withhold from her paycheck for FICA taxes if the calculation is made correctly?

The tax rate schedules are set up to tax lower levels of income at higher tax rates than higher levels of income.

All capital gains are taxed at preferential rates.

An individual could pay 100 percent of her tax liability by the due date of her tax return and still be subject to underpayment tax penalties.

Which of the following is not a barrier to income shifting among family members?

Which of the following best describes the manner in which self-employed taxpayers may deduct self-employment taxes?

Which of the following statements concerning estimated tax payments and underpayment penalties for individuals is true?

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

Kaelyn's mother, Judy, looks after Kaelyn's four-year-old twins so Kaelyn can go to work (she drops off and picks up the twins from Judy's home every day) . Since Judy is a relative, Kaelyn made sure, for tax purposes, to pay her mother the going rate for child care ($6,390 for the year) . What is the amount of Kaelyn's child and dependent care credit if her AGI for the year was $36,900? (Exhibit 8-9)

Taxpayers are not allowed to deduct the standard deduction for alternative minimum tax purposes.

Angelena files as a head of household. In 2020, she reported $54,300 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability? (Round your answer to the nearest whole dollar amount.) (Use the tax rate schedules, long-term capital gains tax brackets.)

Parents may claim a $2,000 child tax credit for a dependent child who is 22 years of age at the end of the year if the child is a full-time student.

Hester (age 17) is claimed as a dependent by his parents, Charlton and Abigail. In 2020, Hester received $10,000 of qualified dividends, and he received $13,000 from a part-time job. What is his taxable income for 2020? (Standard deduction)

Montague (age 15) is claimed as a dependent by his parents, Matt and Mary. In 2020, Montague received $5,100 of qualified dividends, and he received $900 from a part-time job. What is his taxable income for 2020?

Keith and Nicole are married filing jointly, with two daughters who qualify as dependents. Their gross income for 2020 is $25,500. Are they required to file a tax return? How do you know this without memorizing the gross income thresholds? In 2020, the standard deduction for taxpayers filing a joint return is $24,800.

Cassy reports a gross tax liability of $1,000. She also claims $400 of nonrefundable personal credits, $700 of refundable personal credits, and $200 of business credits. What is Cassy's tax refund or tax liability due after applying the credits?

Hestia (age 17) is claimed as a dependent by her parents, Rhea and Chronus. In 2020, 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 2020?