Question 1

Both education tax credits are available for qualified tuition expenses,and in certain instances,also may be available for room and board.

Accepted Answer

Education tax credits like the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC) are available for qualified tuition and related expenses, but they do not cover room and board.

Question 2

The American Opportunity credit is available per eligible student,while the lifetime learning credit is calculated per taxpayer.

Accepted Answer

The American Opportunity credit is available per eligible student, meaning that each student can claim the credit for themselves, while the lifetime learning credit is calculated per taxpayer, meaning that the taxpayer can claim the credit for multiple students.

Question 3

On October 2,2012,Ross quits his job with Blue Corporation.If requested by Ross,Blue Corporation must furnish a Form W-2 to Ross within 60 days after the date of the request or the final wage payment,whichever is later.

Accepted Answer

The answer of On October 2,2012,Ross quits his job with...

Question 4

For the current year,the base amount for the Social Security portion (old age,survivors,and disability insurance)is different from that for the Medicare portion of FICA.

Accepted Answer

The base amount for Social Security portion of FICA is $142,800 in 2021, while there is no limit on the amount of earnings subject to Medicare portion of FICA.

Question 5

Child and dependent care expenses do not include amounts paid for general household services.

Accepted Answer

The answer of Child and dependent care expenses do not...

Question 6

The maximum credit for child and dependent care expenses is $2,100 if only one spouse is employed and the other spouse is a full-time student.

Accepted Answer

This is true according to the IRS. If only one spouse is employed and the other spouse is a full-time student, the maximum credit for childcare expenses is $2,100.

Question 7

Only self-employed individuals are required to make estimated tax payments.

Accepted Answer

Both self-employed individuals and individuals with income from sources such as investments may be required to make estimated tax payments if they expect to owe at least $1,000 in taxes after withholding.

Question 8

Expenses that are reimbursed by a taxpayer's employer under a dependent care assistance program canalso qualify for the credit for child and dependent care expenses.

Accepted Answer

The answer of Expenses that are reimbursed by a taxpayer's...

Question 9

Child care payments to a relative are not eligible for the credit for child and dependent care expenses if the relative is a child (under age 19)of the taxpayer.

Accepted Answer

According to IRS guidelines, child care payments to a relative who is a child (under age 19) of the taxpayer are not eligible for the credit for child and dependent care expenses.

Question 10

In the event that overwithholding of FICA tax occurs because the taxpayer has more than one employer,the excess amount should be claimed as a credit on the Federal income tax return of the employee.

Accepted Answer

If there is overwithholding of FICA tax due to having multiple employers, the excess amount should be claimed as a credit on the employee's federal income tax return using Form 1040.

Question 11

John owns and operates a real estate agency as a sole proprietor.On a full-time basis,he employs his 17-year old daughter as a receptionist and his 22-year old son as a bookkeeper.Only the son is subject to FICA withholding.

Accepted Answer

The answer of John owns and operates a real estate...

Question 12

If an employee holds two jobs during the year,an overwithholding of FICA tax will result.

Accepted Answer

The answer of If an employee holds two jobs during...

Question 13

The education tax credits (i.e.,the American Opportunity credit and the lifetime learning credit)are available to help defray the cost of higher education regardless of the income level of the taxpayer.

Accepted Answer

The education tax credits phase out at higher income levels, meaning taxpayers with incomes above certain thresholds are not eligible for these credits.

Question 14

Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.

Accepted Answer

This is true according to the IRS. Qualifying tuition expenses must be paid with the taxpayer's own funds in order to be eligible for an education tax credit.

Question 15

For purposes of computing the credit for child and dependent care expenses,the qualifying employment-related expenses are limited to an individual's actual or deemed earned income.

Accepted Answer

The qualifying employment-related expenses used for computing the credit for child and dependent care expenses are limited to an individual's actual or deemed earned income.

Question 16

Even though an item of income is not subject to income tax withholding by a taxpayer's employer,it may be subject to the income tax.

Accepted Answer

Just because an item of income is not subject to income tax withholding by an employer does not mean it is exempt from income tax. The taxpayer may still be required to report and pay income tax on that income.

Question 17

Juan refuses to give the bank where he maintains a savings account his Social Security number.Juan is subject to backup withholding for the interest earned on the savings account.

Accepted Answer

According to IRS regulations, if a taxpayer refuses to provide their Social Security number to a financial institution, they are subject to backup withholding on any interest earned on the account.

Question 18

A taxpayer may qualify for the credit for child and dependent care expenses if the taxpayer's dependent is age 13 or less.

Accepted Answer

The dependent can be any age if they are physically or mentally incapable of caring for themselves. Otherwise, the dependent must be under the age of 13.

Question 19

Certain situations exist where the wage-bracket table method of determining income tax withholdings cannot be used.

Accepted Answer

Situations such as when an employee is paid irregularly or has multiple jobs may require alternative methods for determining income tax withholdings.

Question 20

Sam and Betty are married,have four dependent children,and both are employed.For withholding purposes,they may allocate their total allowances between themselves as they see fit.

Accepted Answer

Married couples can choose to distribute their allowances as they see fit.

Quiz 13: Tax Credits and Payment Procedures