Question 1

Apollo is single and his AMT base is $100,250.This amount includes $500 of qualified dividends (the dividends were taxed at 15% in determining the regular tax liability).What is Apollo's tentative minimum tax?

Accepted Answer

The answer of Apollo is single and his AMT base...

Question 2

Pyrrha,a 12-year-old dependent of Epimetheus and Pandora,received $8,200 of interest income in 2018.What is Pyrrha's gross tax liability for the year?

Accepted Answer

The answer of Pyrrha,a 12-year-old dependent of Epimetheus and Pandora,received...

Question 3

Jocelyn,a single taxpayer,had $742,000 of taxable income in 2018.All of the income is ordinary.What is her tax liability for the year? (Use Tax Rate Schedule.)

Accepted Answer

The answer of Jocelyn,a single taxpayer,had $742,000 of taxable income...

Question 4

Candace is claimed as a dependent on her parent's tax return.In 2018,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?

Accepted Answer

The answer of Candace is claimed as a dependent on...

Question 5

Paul and Melissa plan on filing jointly in 2018.For the year,the couple reported taxable income of $130,000.What is their gross tax liability? (Use Tax Rate Schedule.)

Accepted Answer

The answer of Paul and Melissa plan on filing jointly...

Question 6

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 are Henry and Janice's net investment income tax liability this year,rounded to the nearest whole dollar amount?

Accepted Answer

The answer of Henry and Janice are married and file...

Question 7

Which of the following statements regarding late filing penalties and/or late payment penalties is true?

Accepted Answer

If a taxpayer has not paid the full tax liability by the original due date of the return and the taxpayer has not filed a tax return by the due date of the return, the maximum late filing and late payment penalty will be no greater than the late filing penalty by itself. This means that even if the taxpayer has not paid the full amount of tax owed by the original due date, they can avoid the more severe late payment penalty as long as they file their tax return on time. An extension of time to file the tax return does not protect the taxpayer from late payment penalties, although it may protect them from late filing penalties as long as the tax is paid by the extended due date of the return. The penalty rate for late payment penalties is actually higher than the penalty rate for late filing penalties.

Question 8

Jerusha is married and she files a separate tax return in 2018.She claimed the standard deduction for regular tax purposes ($12,000).She had no other adjustments.Her regular taxable income was $67,800.What is Jerusha's AMTI?

Accepted Answer

The answer of Jerusha is married and she files a...

Question 9

Maria and Tony are married.They are preparing to file their 2018 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 2018? (Use Tax Rate Schedule.)

Accepted Answer

The answer of Maria and Tony are married.They are preparing...

Question 10

Lexa,a single taxpayer,worked as an employee during the first half of the year earning $65,000 of salary.Lexa's employer withheld $4,030 of Social Security tax,$943 of Medicare tax,and $0 of additional Medicare tax.In the second half of the year,she was self-employed and she reported $180,000 of self-employment income on her Schedule C.What amount of self-employment taxes and  additional Medicare tax is Lexa required to pay on her self-employment income?

Accepted Answer

The answer of Lexa,a single taxpayer,worked as an employee during...

Question 11

Maria and Tony are married.They are preparing to file their 2018 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 2018? (Use Tax Rate Schedule.)

Accepted Answer

The answer of Maria and Tony are married.They are preparing...

Question 12

Selene made $54,300 in 2018 working at the local burger joint,Moon Café.How much should her employer withhold from her paycheck for FICA taxes if the calculation is made correctly?

Accepted Answer

The answer of Selene made $54,300 in 2018 working at...

Question 13

Which of the following statements regarding late filing penalties is true?

Accepted Answer

The answer of Which of the following statements regarding late...

Question 14

In 2018,Athena reported $39,600 of taxable income.Of this,$34,600 came from her work at the local library and the remaining $5,000 was from capital gains to be taxed at preferential rates.Compute her tax liability for 2018 as a single taxpayer.Use Tax Rate Schedule.)

Accepted Answer

The answer of In 2018,Athena reported $39,600 of taxable income.Of...

Question 15

Hera wants to reduce her income tax liability by shifting some of her income to her 10-year-old daughter (a dependent),Athena.Last year,Hera gifted corporate bonds to Athena.This year,Athena received $1,550 in interest income from the bonds.What amount of tax will Athena pay on the interest income?

Accepted Answer

The answer of Hera wants to reduce her income tax...

Question 16

Jackson earned a salary of $254,000 in 2018.What amount of FICA taxes should Jackson's employer withhold from his paycheck?

Accepted Answer

The answer of Jackson earned a salary of $254,000 in...

Question 17

Harmony is single and was self-employed for the first half of 2018,earning $18,000 of Schedule C (business)net income.During the second half of the year,she began working as an employee and earned $38,000 in salary.What amount of self-employment taxes is Harmony required to pay?

Accepted Answer

The answer of Harmony is single and was self-employed for...

Question 18

What is the underpayment penalty rate that taxpayers pay when they underpay their estimated taxes?

Accepted Answer

Taxpayers pay the federal short-term interest rate plus three percentage points as an underpayment penalty when they underpay their estimated taxes.

Question 19

Max is a 14-year-old dependent of his parents.During 2018,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 2018 taxable income?

Accepted Answer

The answer of Max is a 14-year-old dependent of his...

Question 20

Costa is a single taxpayer.His regular tax liability was $38,000.For 2018,he reported $190,000 of alternative minimum taxable income.What is his alternative minimum tax?

Accepted Answer

The answer of Costa is a single taxpayer.His regular tax...

Quiz 7: Individual Income Tax Computation and Tax Credits