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Exam 8: Individual Income Tax Computation and Tax Credits

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Question 61

True/False

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The alternative minimum tax is the AMT base multiplied by the AMT rate.

A) True
B) False

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Question 62

Multiple Choice

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Which of the following statements regarding the AMT exemption amounts is not true?

A) The amount of the exemption depends on the taxpayer's filing status.
B) The exemption amount is completely phased out for high-income taxpayers.
C) Taxpayers must choose whether they will claim the exemption or itemize deductions.
D) None of the other statements are false (all of the other statements are true) .

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

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Question 63

Multiple Choice

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Which of the following is not an additional tax a taxpayer may have to pay?

Tax rate schedules are provided for use by (relatively)higher-income taxpayers, while the tax tables are provided for use by (relatively)lower-income taxpayers.

How could an individual obtain a business tax credit?

Which of the following taxpayers (all age 40) is/are required to file a return?

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

Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work. His AGI for the year was $37,500 (all earned income). What is the amount of his child and dependent care credit?

Which of the following suggests that a working taxpayer is an independent contractor rather than an employee?

Which of the following is not true of the extension to file an individual tax return?

For alternative minimum tax purposes, taxpayers are allowed to deduct state income taxes but are not allowed to deduct charitable contributions.

For married couples, the Social Security wage base limitation applies separately to each spouse.

Wolfina's twins, Romulus and Remus, finished their first year of school at an accredited university in 2019. She paid $10,000 in qualified educational expenses for Romulus and $2,000 of qualifying expenses for Remus. Wolfina is a head of household with an AGI of $85,000. What amount of American opportunity credit may she claim?

Akiko and Hitachi (married filing jointly for 2019)are both educators. They attended a conference to further their job-related skills. Tuition for the conference was $2,000 for each person. Their AGI was $122,000. How much lifetime learning credit can they claim?

Jackson earned a salary of $254,000 in 2019. What amount of FICA taxes should Jackson's employer withhold from his paycheck?

Parents may claim a child and dependent care credit for expenses incurred in providing for their dependents while the parents work as long as the children are over age 14 and under age 20 at year-end.

An 80-year-old taxpayer with earned income and no dependent children could qualify for the earned income credit.

Max is a 14-year-old dependent of his parents. During 2019, Max earned $1,800 working part-time jobs, and he received $1,500 of interest income from corporate bonds that were given to him last year. What is Max's 2019 taxable income?

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

Alton reported net income from his sole proprietorship of $90,000. To determine his self-employment tax, he would multiply $90,000 by the self-employment tax rate.