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Exam 8: Individual Income Tax Computation and Tax Credits

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Question 71

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Hera earned a $175,000 salary in 2019. Her husband, Zeus, earned $100,000 salary in 2019. Hera and Zeus file a joint tax return. How much in FICA taxes will they owe in 2019?

A) $14,440
B) $18,652
C) $19,547
D) $4,213

E) All of the above
F) A) and D)

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Question 72

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Sam is 30 years old. In 2019, he reported an AGI of $12,000, all from his job as a server at the local café. He is single and has no dependents. What amount of earned income credit may he claim in 2019? Use Exhibit 8-10

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$273.
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Question 73

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The alternative minimum tax system requires taxpayers to apply an alternative tax rate on the regular income tax base to determine the amount of the alternative minimum tax.

Which of the following items is not added back to regular taxable income in computing alternative minimum taxable income?

Self-employed taxpayers are allowed to deduct the full amount of the self-employment taxes they pay.

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?

Costa is a single taxpayer. His regular tax liability was $38,000. For 2019, he reported $190,000 of alternative minimum taxable income. What is his alternative minimum tax?

Rhianna and Jay are married filing jointly in 2019. They have six children under age 17 for whom they may claim the child tax credit. Their AGI was $419,400. What amount of child tax credit may they claim on their 2019 tax return?

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.

Candace is claimed as a dependent on her parent's tax return. In 2019, Candace received $5,000 of interest income from corporate bonds she obtained several years ago. This is her only source of income. She is 15 years old at year-end. What is her gross tax liability?

The Olympians have three children. The kiddie tax applies to unearned income received by which of the following children?

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 ($6,300 for the year) . What is the amount of Kaelyn's child and dependent care credit if her AGI for the year was $36,000? (Exhibit 8-9)

During 2019, Jasmine (age 12) received $6,500 from a corporate bond. She also received $600 from a savings account established for her by her parents. Jasmine lives with her parents and she is their dependent. What is Jasmine's gross tax liability? (Use the Estates and trusts and Tax rate schedules.)

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 $10,000 and $70,000 of taxable income, respectively. On their joint tax return, their taxable income is $80,000. How much of a marriage penalty or benefit will Maria and Tony experience in 2019? (Use Tax rate schedules.)

Jerusha is married and she files a separate tax return in 2019. She claimed the standard deduction for regular tax purposes ($12,200). She had no other adjustments. Her regular taxable income was $67,800. What is Jerusha's AMTI?

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

Which of the following is not true of the lifetime learning credit?

Which of the following statements best describes the deductions independent contractors may claim for valid business expenses?

Asteria earned a $25,500 salary as an employee in 2019. How much should her employer have withheld from her paycheck for FICA taxes? (Round your answer to the nearest whole dollar amount.)

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.