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Exam 8: Individual Income Tax Computation and Tax Credits

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Question 61

Multiple Choice

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Looking at the following partial calendar for April,when will individual tax returns be due?

A) Friday,April 14
B) Saturday,April 15
C) Sunday,April 16
D) Monday,April 17
E) Tuesday,April 18

F) B) and E)
G) None of the above

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Question 62

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

A) True
B) False

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Question 63

Multiple Choice

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

The amount of expenditures eligible for the child and dependent care credit is the least of three amounts.Which of the following is not one of those amounts?

Hester (age 17) is claimed as a dependent by his parents,Charlton and Abigail.In 2019,Hester received $10,000 of qualified dividends,and he received $12,000 from a part-time job.What is his taxable income for 2019?

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

The earned income credit is sometimes referred to as a negative income tax.

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?

Tamra and Jacob are married and they file a joint tax return.Tamra received nearly five times the salary that Jacob received.Which of the following statements is true?

In certain circumstances a child with very little income may have at least a portion of their income taxed at the trust and estate tax rates.

The lifetime learning credit can be used toward the cost of any course of instruction to acquire or improve a taxpayer's job skills,no matter the age of the taxpayer.

Depending on the year,the original (unextended)due date for an individual's tax return may be before April 15.

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?

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?

Maria and Tony are married.They are preparing to file their 2019 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 2019? (Use Tax rate schedules.)

Which of the following statements regarding the child and dependent care credit is false?

All else equal,taxpayers are more likely to be classified as employees rather than independent contractors if they are allowed to determine their own working hours and work without frequent oversight.

If there is not enough gross tax liability to use the foreign tax credit,________.

Business credits are generally refundable credits.

All else equal,a reduction in regular income tax rates would require more taxpayers to pay the alternative minimum tax.