Question 1

The child and dependent care credit provides relief for working taxpayers who pay for care for younger children or an incapacitated dependent or spouse.

Accepted Answer

The statement is true. The child and dependent care credit is available to taxpayers who incur expenses for care provided to a qualifying individual while they are working or looking for work. The credit is meant to provide relief for the costs of care for children under the age of 13, a spouse who is physically or mentally incapable of self-care, or another dependent who is physically or mentally incapable of self-care.

Question 2

Taxpayers with income below phaseout amounts are allowed a child credit of $1,000 for each qualifying child under age 19 or under age 24 if a full-time student.

Accepted Answer

The tax law provides taxpayers with a credit for each qualifying child.For this purpose,a child must be under age 17.

Question 3

Qualified tuition and related expenses eligible for the American Opportunity Tax Credit are limited to those incurred the first two years of postsecondary education.

Accepted Answer

The answer of Qualified tuition and related expenses eligible for...

Question 4

Shafiq,age 16,works part-time at the local supermarket after school and on vacations.He plans to open a Roth IRA to save for his future.Shafiq makes less than $10,000 per year.He can take advantage of the qualified retirement savings contributions credit ("saver's credit").

Accepted Answer

The answer of Shafiq,age 16,works part-time at the local supermarket...

Question 5

For purposes of the child and dependent care credit,qualifying employment-related expenses cannot include payments to a relative.

Accepted Answer

Qualifying employment-related expenses for the child and dependent care credit can include payments to certain relatives, such as a parent, sibling, or grandparent, as long as they are not a dependent and are providing care for the taxpayer's child.

Question 6

Nonrefundable credits may offset tax liability but may not result in additional payments to the taxpayer.

Accepted Answer

Nonrefundable credits can reduce or offset a taxpayer's tax liability, but any excess credit beyond the liability cannot be refunded to the taxpayer.

Question 7

All of the following statements regarding self-employment income/tax are true except:

Accepted Answer

This statement is false. Employees who have a business in addition to their regular employment are still subject to the self-employment tax on their self-employment income. FICA withholding only applies to the wages earned from their regular employment.

Question 8

To claim the Lifetime Learning Credit,a student must take at least one-half of a full-time course load during the year.

Accepted Answer

To claim the Lifetime Learning Credit, a student does not need to take at least one-half of a full-time course load. They can take any number of courses, including just one course per year.

Question 9

Tanya has earnings from self-employment of $240,000,resulting in self-employment tax of $21,122 and Additional MedicareTax of $360.Due to these taxes,Tanya will be allowed a deduction for AGI of

Accepted Answer

The answer of Tanya has earnings from self-employment of $240,000,resulting...

Question 10

The qualified retirement savings contributions credit is based on a maximum contribution of $2,000.

Accepted Answer

The qualified retirement savings contributions credit, also known as the Saver's Credit, is based on a maximum contribution of $2,000 made to a qualified retirement account.

Question 11

The adoption credit based on qualified adoption expenses is generally allowed in the year the adoption is finalized.

Accepted Answer

The adoption credit is generally allowed in the year the adoption is finalized, as long as the expenses were incurred during the adoption process. However, if the adoption is not finalized by the end of the tax year, the credit may be carried forward to the following year.

Question 12

The child and dependent care credit is partially refundable.

Accepted Answer

The answer of The child and dependent care credit is...

Question 13

All of the following are self-employment income except

Accepted Answer

The answer of All of the following are self-employment income...

Question 14

For purposes of the limitation on qualifying expenses for the child and dependent care credit,a spouse who is either a full-time student or is incapacitated is deemed to have earned income of $250 per month,or $500 per month if there are two or more qualifying individuals in the household.

Accepted Answer

According to IRS Publication 503, this statement is true. A spouse who is either a full-time student or is incapacitated is deemed to have earned income of $250 per month, or $500 per month if there are two or more qualifying individuals in the household, for purposes of the limitation on qualifying expenses for the child and dependent care credit.

Question 15

Lara started a self-employed consulting business in the last part of the year and earned $60,000 of self- employment income.She had been employed as manager in a consulting firm prior to starting her own business and had earned $175,000.
(a)What is Lara's Additional Medicare Tax for 2016,if any?
(b)What is Lara's deduction for AGI for the Additional Medicare Tax?

Accepted Answer

The answer of Lara started a self-employed consulting business in...

Question 16

The Lifetime Learning Credit is partially refundable.

Accepted Answer

The answer of The Lifetime Learning Credit is partially refundable....

Question 17

Nonrefundable personal tax credits can only offset an individual's regular tax,not AMT.

Accepted Answer

The answer of Nonrefundable personal tax credits can only offset...

Question 18

Sonya started a self-employed consulting business in the last part of the year and earned $40,000.She had been employed as manager in a consulting firm prior to starting her own business and had earned $125,000.
(a)What is Sonya's self employment tax for 2016?
(b)What is Sonya's deduction for AGI for the SE tax?

Accepted Answer

The answer of Sonya started a self-employed consulting business in...

Question 19

Jay and Cara's daughter is starting her freshman year of college.Jay and Cara will be able to claim the American Opportunity Tax Credit for a percentage of the cost of tuition,required fees and course materials,but the room and board charges will not qualify for the credit.

Accepted Answer

The statement is true. The American Opportunity Tax Credit can only be claimed for the cost of tuition, required fees, and course materials. Room and board charges are not eligible for this credit.

Question 20

Ava has net earnings from self-employment of $125,000.She also earned salary of $170,000 from a job held earlier in the year.How much Additional Medicare Tax will be owed on the self-employment income?

Accepted Answer

The answer of Ava has net earnings from self-employment of...

Quiz 14: Special Tax Computation Methods, tax Credits, and Payment of Tax