Question 1

If an employee has more than one employer during the year,all employers must withhold federal income taxes but only one employer must withhold FICA tax.

Accepted Answer

All employers must withhold FICA.

Question 2

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

D) No underpayment penalty is imposed if the estimated payments total at least 100% of the actual tax liability for the prior year.

Question 3

Individuals who do not have minimum essential health insurance coverage will pay an excise tax.

Accepted Answer

Taxpayers are subject to an excise tax known as the shared responsibility payment if they do not have minimum essential health insurance coverage for themselves and their dependents.

Question 4

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

A) A penalty is not imposed if the estimated tax for the current year is less than $1,000.

Question 5

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

When AGI exceeds $150,000, the taxpayer needs to pay in 110% of prior year tax liability.

Question 6

Hawaii,Inc.,began a child care facility for its employees during the year.The corporation incurred the following expenses:
  
What is the amount of Hawaii's credit for employer-provided child care?

Accepted Answer

The answer of Hawaii,Inc.,began a child care facility for its...

Question 7

If a taxpayer's AGI is greater than $150,000,no penalty will be imposed if the taxpayer pays estimated tax payments in 2017 equal to what percentage of 2016's income tax liability?

Accepted Answer

C) If the taxpayer's AGI is greater than $150,000, no penalty will be imposed if the taxpayer pays estimated tax payments in the current year equal to 110% of the preceding year's income tax liability.

Question 8

Ivan has generated the following taxes and credits this year:
  
How much general business credit will he apply to the current year tax liability?

Accepted Answer

The answer of Ivan has generated the following taxes and...

Question 9

Amelida expects to earn $145,000 of AGI and $125,000 of taxable income this year.She is concerned about underpayment penalties.Because of a substantial bonus,her prior year AGI was $155,000 and her taxable income was $135,000.Based on her fact pattern,which of the following scenarios will not allow her to avoid underpayment penalties?

Accepted Answer

B) Because her prior year AGI exceeded $150,000, she must rely on the 110% of the prior year tax liability safe harbor instead of the 100% level.

Question 10

If estimated tax payments equal or exceed 100% of the actual tax liability for the prior year,there is generally (assuming AGI less than or equal to $150,000) no penalty for underpayment of estimated taxes.

Accepted Answer

One of the safe harbor exceptions allowed by law to avoid the underpayment penalty is to pay in estimated taxes equal to or exceeding the prior year tax liability. This exception is available to taxpayers if their prior year AGI was $150,000 or less.

Question 11

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 $48,000.

Accepted Answer

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

Question 12

Assume you plan to volunteer at a Volunteer Income Tax Assistance (VITA) program for low income taxpayers and wish to prepare so you can help your clients achieve the maximum tax savings.Briefly discuss tax credits with which you should become familiar.

Accepted Answer

The answer of Assume you plan to volunteer at a...

Question 13

Claire accepts a new job.She will have access to health insurance coverage through her employer.The employer's policy meets the criteria for affordable minimum essential coverage.Claire prefers to purchase her own insurance policy through the state or federal exchange so she can retain access to her doctor.Assuming Claire's income is within the parameters specified,she will be eligible for the health insurance premium assistance credit.

Accepted Answer

Having access to affordable minimum essential coverage through her new employer disqualifies the taxpayer with respect to the health insurance premium assistance credit.

Question 14

Discuss tax-planning options available for expenses incurred for child and dependent care.

Accepted Answer

The answer of Discuss tax-planning options available for expenses incurred...

Question 15

During the year,Jim incurs $500,000 of rehabilitation expenditures in connection with a certified historic structure used in his business.The adjusted basis of the structure was $400,000 at the time the rehabilitation began.
a.What is the amount,if any,of his rehabilitation credit for the year?
b.What is the depreciable basis of the rehabilitation expenditures?

Accepted Answer

The answer of During the year,Jim incurs $500,000 of rehabilitation...

Question 16

Which of the following statements is incorrect regarding qualifying criteria for the health insurance premium tax credit?

Accepted Answer

A) The insurance must be purchased through a state or federal exchange.

Question 17

Yulia has some funds that she wishes to invest,but is concerned that she is at risk for AMT.Yulia should avoid investing in all municipal bonds.

Accepted Answer

Only specified private activity municipal bonds create a preference for AMT.

Question 18

Describe the differences between the American Opportunity Tax credit and the Lifetime Learning credit.

Accepted Answer

The answer of Describe the differences between the American Opportunity...

Question 19

Bonjour Corp.is a U.S.-based corporation with operations in France.The operations in France generated $200,000 of taxable income whereas worldwide operations generated total taxable income of $2,000,000.Its U.S.tax liability before credits is $680,000.Determine the allowable foreign tax credit assuming taxes paid to France as follows:
a. $40,000.
b. $80,000.

Accepted Answer

The answer of Bonjour Corp.is a U.S.-based corporation with operations...

Question 20

The health insurance premium assistance credit is designed to help lower and middle income taxpayers who purchase their own health insurance directly from an insurance company or through a state or federal exchange.

Accepted Answer

The credit is only available for premiums on policies purchased through the state or federal exchanges.

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