Question 1

How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?

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Question 2

Summer Corporation's business is international in scope and is subject to income taxes in several countries.Summer's earnings and income taxes paid in the relevant foreign countries are:
  If Summer Corporation's worldwide income subject to taxation in the United States is $2,400,000 and the U.S.income tax due prior to the foreign tax credit is $816,000, compute the allowable foreign tax credit.If, instead, the total foreign income taxes paid were $550,000, compute the allowable foreign tax credit.

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Question 3

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

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Question 4

Dabney and Nancy are married, both gainfully employed, and have two children who are 3 and 6 years old.Dabney's salary is $35,000 while Nancy's salary is $40,000.During the year, they spend $7,000 for child care expenses that are required so both of them can work outside of the home.Calculate the credit for child and dependent care expenses.

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Question 5

Discuss the treatment of unused general business credits.

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Question 6

Susan generated $55,000 of net earnings from the conduct of a tax preparation business that she operated during the tax-filing season.She also received wages of $60,000 from her full-time job.Compute the self-employment taxes due for 2012.

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Question 7

Explain the purpose of the disabled access credit and describe the general characteristics of its computation.

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Question 8

Bradley has two college-age children, Clint, a freshman at State University, and Abigail, a junior at Northwest University.Both Clint and Abigail are full-time students.Clint's expenses during the 2012 fall semester are as follows: $2,400 tuition, $250 books and course materials, and $1,600 room and board.Abigail's expenses for the 2012 calendar year are as follows: $10,200 tuition, $1,200 books and course materials, and $3,600 room and board.Tuition and the applicable room and board costs are paid at the beginning of each semester.Bradley is married, files a joint tax return, claims both children as dependents, and has a combined AGI with his wife of $114,000 for 2012.Determine Bradley's available education tax credit for 2012.

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Question 9

Phil and Audrey, husband and wife, are both employed by Laurel Corporation.Phil earns $112,000 in salary in 2012, and Audrey earns $70,000.How much FICA tax must they pay for 2012?

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Quiz 12: Tax Credits and Payments