Question 1

Individuals without children are eligible for the earned income credit if they meet all the following conditions except

Accepted Answer

Individuals without children can still claim the earned income credit if they meet the following conditions:
- At tax year end, they are between the ages of 25 and 64
- They are not claimed as a dependent by anyone else
- They have earned income from working for someone else or from running their own business
- They are U.S. citizens or residents and have a valid Social Security number
It does not matter whether they file as single, head of household, or married filing jointly. However, if they file as married filing separately, they cannot claim the earned income credit. Therefore, choice A is incorrect.

Question 2

Nick and Nicole are both 68 years old and file a joint return.They have AGI of $15,000 and receive nontaxable Social Security payments of $4,200 during the current year.What is the amount of the tax credit for the elderly?

Accepted Answer

The answer of Nick and Nicole are both 68 years...

Question 3

Layla earned $20,000 of general business credits from her sole proprietorship.Her regular tax liability is $45,000,and her tentative minimum tax is $49,000.During the current year Layla will apply general business credits of

Accepted Answer

The answer of Layla earned $20,000 of general business credits...

Question 4

George and Meredith who are married,have a regular tax liability of $23,108,taxable income of $125,000,tax preferences of $25,000,and positive adjustments attributable to limitations on itemized deductions of $18,700 this year.They claim $11,700 of personal and dependency exemptions for themselves and their 20-year old dependent daughter.What is George and Meredith's alternative minimum tax for 2013?

Accepted Answer

The answer of George and Meredith who are married,have a...

Question 5

Kors Corporation has 30 employees and $5 million of gross receipts.Kors spends $15,000 for qualified structural improvements for access for the disabled.The disabled access credit is

Accepted Answer

The answer of Kors Corporation has 30 employees and $5...

Question 6

Which of the following expenditures will qualify as a research expenditure for purposes of the research credit?

Accepted Answer

Only choice A qualifies as a research expenditure for the research credit because it involves the development of a new type of packaging which requires experimentation and analysis to determine the optimal design and materials. Choices B and C involve the development of new designs and marketing strategies which, while they may involve some level of research, do not meet the requirements for the research credit under the Internal Revenue Code.

Question 7

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

Accepted Answer

All of the options except D are generally true with respect to estimated tax payments for a taxpayer with AGI of $150,000 or lower in the prior year. Option D is incorrect because the estimated payments need to total at least 100% (or 110% for higher-income taxpayers) of the actual tax liability for the prior year to avoid an underpayment penalty.

Question 8

Which one of the following is a refundable credit?

Accepted Answer

The earned income credit is a refundable credit, meaning if the credit exceeds the amount of taxes owed, the taxpayer can receive a refund for the difference. The other options are non-refundable credits, meaning they can only reduce the amount of taxes owed and cannot result in a refund.

Question 9

Annie has taxable income of $100,000,a regular tax liability of $21,293,a positive AMT adjustment due to limitations on itemized deductions of $20,000,and tax preferences of $25,000 in 2013.Annie is single and takes a $3,900 personal exemption for herself only.What is Annie's AMT for 2013?

Accepted Answer

The answer of Annie has taxable income of $100,000,a regular...

Question 10

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 2013?
(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 11

Tom and Anita are married,file a joint return with an AGI of $165,000,and have one dependent child,Tim,who is a first-time freshman in college.The following expenses are incurred and paid in 2013:
  What is the maximum education credit allowed to Tom and Anita?

Accepted Answer

The answer of Tom and Anita are married,file a joint...

Question 12

If a taxpayer's AGI is greater than $150,000,no penalty will be imposed if the taxpayer pays estimated tax payments in 2013 equal to what percentage of 2012's income tax liability?

Accepted Answer

For taxpayers with an AGI greater than $150,000, they must pay estimated tax payments equal to 110% of the previous year's tax liability to avoid a penalty.

Question 13

Dwayne has general business credits totaling $30,000 before limitation.His regular tax liability is $83,000 and his tentative minimum tax is $79,000.What amount of general business credit can Dwayne take this year?

Accepted Answer

The answer of Dwayne has general business credits totaling $30,000...

Question 14

An individual with AGI equal to or less than $150,000 in the prior year may generally avoid penalties for underpayment of estimated tax in each of the following cases with the exception of

Accepted Answer

The answer of An individual with AGI equal to or...

Question 15

Sam and Megan are married with two dependent children.Both Sam and Megan work,earning $50,000 and $55,000,respectively.Their AGI totals $110,000.They incur $6,500 of qualifying child care expenses of which $2,500 is reimbursed by Megan's dependent care program at work.
What is the amount of their child and dependent care credit?

Accepted Answer

The answer of Sam and Megan are married with two...

Question 16

Lara started a self-employed consulting business in the last part of the year and earned $60,000 of net 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 2013,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 17

Tyler and Molly,who are married filing jointly with $200,000 of AGI in 2013,incurred the following expenses in their efforts to adopt a child:
  The adoption was finalized in 2013.What is the amount of the allowable adoption credit in 2013?

Accepted Answer

The answer of Tyler and Molly,who are married filing jointly...

Question 18

Runway Corporation has $2 million of gross receipts in the preceding year.For purposes of the disabled access credit,what is the maximum number of full-time employees the corporation can have in the preceding year?

Accepted Answer

The answer of Runway Corporation has $2 million of gross...

Question 19

A taxpayer will be ineligible for the earned income credit if he or she has disqualified investment income of more than $3,300.Disqualified income includes all the following except

Accepted Answer

Disqualified investment income includes net rental income, net capital gains, and tax-exempt interest. Self-employment income is not classified as disqualified investment income and does not affect the eligibility for the earned income credit.

Question 20

The general business credit may not exceed the net income tax minus the greater of the tentative minimum tax or

Accepted Answer

The answer of The general business credit may not exceed...

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