Question 1

Bob's income can vary widely from year-to-year because much of his compensation comes from sales commissions and bonuses.It generally is in the $200,000 to $300,000 range.To minimize the risk of underpayment penalties for estimated tax he should pay in,through payroll withholding and estimated tax payments,100% of the prior year tax liability.

Accepted Answer

The answer of Bob's income can vary widely from year-to-year...

Question 2

If a taxpayer's AGI is greater than $150,000,no penalty will be imposed if the taxpayer pays estimated tax payments in 2014 equal to what percentage of 2013's income tax liability?
A)100%
B)90%
C)110%
D)120%

Accepted Answer

For taxpayers with an AGI greater than $150,000, they must pay 110% of the previous year's tax liability to avoid penalties on underpayment of estimated taxes.

Question 3

Nonrefundable personal tax credits are allowed against the taxpayer's tax liability before other credits are claimed.

Accepted Answer

Nonrefundable personal tax credits can reduce the taxpayer's tax liability, but cannot result in a refund if they exceed the taxpayer's tax liability. They are allowed before other credits are claimed on the tax return.

Question 4

Discuss the tax planning techniques available to a U.S.citizen who is on a foreign job assignment.

Accepted Answer

The answer of Discuss the tax planning techniques available to...

Question 5

Discuss actions a taxpayer can take if it is anticipated that his income taxes will be substantially underpaid in order to minimize penalties.

Accepted Answer

The answer of Discuss actions a taxpayer can take if...

Question 6

Discuss when Form 6251,Alternative Minimum Tax,must be filed.

Accepted Answer

The answer of Discuss when Form 6251,Alternative Minimum Tax,must be...

Question 7

Assume a taxpayer determines that his total income tax for the year is $25,000 at the time he files his tax return.Given the fixed tax liability,a taxpayer with savings should prefer a tax refund of $2,500 over a tax due of $2,500.

Accepted Answer

A taxpayer with savings should prefer a tax due of $2,500 because it means they had the use of their money throughout the year, rather than giving an interest-free loan to the government by overpaying taxes and receiving a refund.

Question 8

Beth and Jay project the following taxes for the current year:  How much in estimated tax payments (including withholding from wages and quarterly estimated payments)should the taxpayers pay this year in order to avoid underpayment penalties under the following assumptions regarding the preceding tax year?
a.Preceding tax year-AGI of $140,000 and total taxes of $36,000.
b.Preceding tax year-AGI of $155,000 and total taxes of $50,000.

Accepted Answer

The answer of Beth and Jay project the following taxes...

Question 9

With respect to estimated tax payments for a taxpayer with AGI of $150,000 or lower in the prior year,all of the following are generally true with the exception of
A)no penalty is imposed if the estimated tax is less than $1,000.
B)no penalty is imposed if the individual has no tax liability for the prior year.
C)no underpayment penalty is imposed if the estimated payments total at least 90% of the tax due for the current year.
D)no underpayment penalty is imposed if the estimated payments total at least 90% of the actual tax liability for the prior year.

Accepted Answer

The other statements are generally true for taxpayers with AGI of $150,000 or lower in the prior year. However, option D is incorrect as the threshold for avoiding underpayment penalties for estimated tax payments is either 90% of the tax due for the current year or 100% (or 110% for higher earners) of the actual tax liability for the prior year, whichever is smaller.

Question 10

A taxpayer at risk for AMT should consider which of the following decisions?
A)investing in corporate bonds
B)timing of state income tax estimated payments
C)choosing a depreciation method for a new business building
D)all of the above

Accepted Answer

A taxpayer at risk for AMT should consider timing their state income tax estimated payments to avoid triggering the AMT. Investing in corporate bonds and choosing a depreciation method for a new business building do not directly affect AMT calculations.

Quiz 28: Special Tax Computation Methods,tax Credits,and Payment of Tax

If a taxpayer's AGI is greater than $150,000,no penalty will be imposed if the taxpayer pays estimated tax payments in 2014 equal to what percentage of 2013's income tax liability?

Nonrefundable personal tax credits are allowed against the taxpayer's tax liability before other credits are claimed.

Discuss the tax planning techniques available to a U.S.citizen who is on a foreign job assignment.

Discuss actions a taxpayer can take if it is anticipated that his income taxes will be substantially underpaid in order to minimize penalties.

Discuss when Form 6251,Alternative Minimum Tax,must be filed.

Assume a taxpayer determines that his total income tax for the year is $25,000 at the time he files his tax return.Given the fixed tax liability,a taxpayer with savings should prefer a tax refund of $2,500 over a tax due of $2,500.

With respect to estimated tax payments for a taxpayer with AGI of $150,000 or lower in the prior year,all of the following are generally true with the exception of

A taxpayer at risk for AMT should consider which of the following decisions?