Question 1

Keith and Nicole are married filing joint with two daughters who qualify as dependents. Their gross income for 2016 is $21,000. Are they required to file a tax return? How do you know this without memorizing the gross income thresholds? In 2016, the standard deduction for taxpayers filing a joint return is $12,600 and the personal exemption is $4,050.

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Question 2

Wolfina's twins, Romulus and Remus, finished their first year of school at an accredited university in 2016. She paid $10,000 in qualified educational expenses for Romulus and $2,000 of qualifying expenses for Remus. Wolfina is a head of household with an AGI of $85,000. What amount of American opportunity credit may she claim?

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Question 3

Julien and Sarah are married, file a joint return, and have two children, Kaya and Christopher. Kaya just finished her third year at college and Christopher just finished his first year of graduate school (fifth year of college). Tuition and books for the past year were $1,800 for Kaya and $5,000 for Christopher. How much can Julien and Sarah claim in educational credits if their joint AGI was $123,000 for 2016?

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Question 4

In 206, Shawn's AGI is $170,000. He earned the income evenly throughout the year. He owed $24,900 in federal income tax plus alternative minimum tax of $263, and self-employment taxes of $2,590. Last year, he had a gross tax liability of $50,000. What is the minimum quarterly estimated tax payment Shawn must pay each quarter to avoid underpayment penalties for 2016?

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The answer of In 206, Shawn's AGI is $170,000. He...

Question 5

Akiko and Hitachi (married filing jointly for 2016) are both educators. They attended a conference to further their job-related skills. Tuition for the conference was $2,000 for each person. Their AGI was $117,000. How much lifetime learning credit can they claim?

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Question 6

During all of 2016, Mr. and Mrs. Clay lived with their four children (all are under the age of 17). They provided over one-half of the support for each child. Mr. and Mrs. Clay file jointly for 2016. Neither is blind, and both are under age 65. They reported the following tax-related information for the year:  
A.What is the Clays' taxes payable or (refund due)? (ignore the alternative minimum tax)
B.What is the Clays' tentative minimum tax and alternative minimum tax?

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Question 7

Sam is 30 years old. In 2016, 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 2016?

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Question 8

In 2016, John (52 years old) files as a head of household with one 18-year old dependent (qualifying) child. John is eligible to claim a $700 American opportunity credit for the year. John did not have any taxes withheld by his employer during the year and he did not make any estimated tax payments. After taking credits into account, what is the amount of John's taxes payable or refund assuming that his AGI is $26,000 (all from salary) and his taxable income is $9,000?

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Question 9

Atlas earned $17,300 from his sole proprietorship in 2016. This was his only source of income. How much in self-employment taxes will Atlas be able to deduct?

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Question 10

Assume Georgianne underpaid her estimated tax liability by $150 in the first quarter, $500 in the second quarter, $400 in the third quarter, and $200 in the fourth quarter. Calculate her underpayment penalty for the year, assuming the federal short-term interest rate is five percent.

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Question 11

Demeter is a single taxpayer. Her AGI in 2016 is $81,200. Demeter may claim a child tax credit for her daughter Persephone. What amount of child tax credit is Demeter entitled to claim after any applicable phase-out?

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Question 12

Clarissa's gross tax liability for 2016 is $1,300. She has a $1,500 nonrefundable personal tax credit, a $750 business tax credit, and a $400 refundable personal tax credit. Her employer withheld $1,000 from her pay for taxes. What is her net tax due or refund for this year?

Accepted Answer

The answer of Clarissa's gross tax liability for 2016 is...

Question 13

Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work. His AGI for the year was $37,500 (all earned income). What is the amount of his child and dependent care credit?

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Question 14

Harmony was self-employed for the first half of 2016, 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?

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Question 15

Johann had a gross tax liability of $22,508 in 2016, but his employer only withheld taxes of $19,500. Johann's gross tax liability was $21,000 in 2015. Calculate Johann's under/overpayment in each quarter for 2016 tax purposes.

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The answer of Johann had a gross tax liability of...

Question 16

Lexa 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 .9 percent 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 is Lexa required to pay?

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Question 17

Jackson earned a salary of $254,000 in 2016. What amount of FICA taxes should Jackson's employer withhold from his paycheck?

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

Quiz 8: Individual Income Tax Computation and Tax Credits