Question 1

Both the width (or range) of the tax brackets (the amount of income taxed at a particular rate) in the tax rate schedules and the range of the tax rates in the tax rate schedules (the difference between the lowest tax rate and the highest tax rate) vary by filing status.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements about estimated tax payments and underpayment penalties is True for individual taxpayers?

Accepted Answer

A)   Taxpayers who have paid their full tax liability by the original tax return due date are protected from underpayment penalties.
B)   Taxpayers who have paid their full tax liability by the extended tax return due date are protected from underpayment penalties.
C)   Taxpayers who have uneven income streams can pay estimated tax quarterly in uneven amounts and not be susceptible to underpayment penalties.
D)   Taxpayers who have paid their required amount of estimated tax, even though not on time, are protected from underpayment penalties.E) A) and B)
F) C) and D)

Question 3

Max is a 14-year-old dependent of his parents. During 2018, Max earned $1,800 working part time jobs and he received $1,500 of interest income from corporate bonds that were given to him last year. What is Max's 2018 taxable income?

Accepted Answer

$1,150
This consists of gross ...

Question 4

Taxpayers are not allowed to deduct the standard deduction for alternative minimum tax purposes.

Accepted Answer

A) True 
 B)False

Question 5

The Olympians have three children. The kiddie tax applies to unearned income received by which of the following children?

Accepted Answer

A)   Poseidon is a 20-year-old full-time student who does not support himself.
B)   Demeter, a 23-year-old full-time student who supports herself with a job at a grocery store.
C)   Zeus is 20 years old and not a student.
D)   "Demeter, a 23-year-old full-time student who supports herself with a job at a grocery store" and "Zeus is 20 years old and not a student".
E)   None of the choices are correct.F) A) and D)
G) A) and E)

Question 6

The wage base for which of the following taxes is capped?

Accepted Answer

A)   Federal income.
B)   Social Security.
C)   Medicare.
D)   Alternative minimum.E) C) and D)
F) None of the above

Question 7

Which of the following statement(s)  concerning estimated tax payments and underpayment penalties for individuals is (are)  True?

Accepted Answer

A)   Whether taxpayers are subject to underpayment penalties is determined on a quarterly basis.
B)   Due dates for estimated tax payments for a given year are April 15, June 15, September 15 of that year and January 15 of the next year unless these dates fall on a weekend or a holiday.
C)   The amount of penalty depends on the amount of the underpayment among other factors.
D)   All of these statements are True.E) B) and D)
F) A) and B)

Question 8

John and Sally pay Janet (Sally's older sister) to watch John and Sally's child Dexter during the day. Janet cares for Dexter in her home. John and Sally may claim a child and dependent care credit based on the amount they pay Janet to care for Dexter.

Accepted Answer

A) True 
 B)False

Question 9

Clarissa's gross tax liability for 2018 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

Refund of ...

Question 10

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold. This threshold is generally the ________.

Accepted Answer

A)   applicable standard deduction amount
B)   AMT exemption amount
C)   twice the applicable standard deduction amount
D)   applicable standard deduction amount plus the personal exemption amountE) A) and D)
F) B) and C)

Question 11

Which of the following taxpayers (all age 40)  are required to file a return?

Accepted Answer

A)   Jenny and Jim.
B)   Allen.
C)   Timmy.
D)   None of the choices are correct.E) All of the above
F) A) and B)

Question 12

Which of the following statements regarding the child tax credit is False?

Accepted Answer

A)   The child for whom the credit is claimed must be under the age of 15 at the end of the year.
B)   The credit is subject to phase-out based on the taxpayer's AGI.
C)   The full credit for a child who qualifies is $2,000.
D)   The child for whom the full credit is claimed must meet the definition of a qualifying child.E) C) and D)
F) A) and B)

Question 13

The late payment penalty is based on the amount of tax owed and the number of days that the tax is not paid. The maximum amount of the penalty is unlimited.

Accepted Answer

A) True 
 B)False

Question 14

Stephanie and Mitch are married and they file a joint tax return. Mitch received a slightly higher salary than Stephanie did during the year. They both make very high salaries. Which of the following statements is True?

Accepted Answer

A)   Stephanie and Mitch likely pay no tax marriage penalty nor receive a tax marriage benefit.
B)   Stephanie and Mitch likely pay a tax marriage penalty.
C)   Stephanie and Mitch likely receive a tax marriage benefit.
D)   Stephanie and Mitch likely will pay a tax marriage penalty and receive a tax marriage benefit.E) A) and C)
F) B) and C)

Question 15

Regular taxable income is the starting point for determining the alternative minimum tax.

Accepted Answer

A) True 
 B)False

Question 16

In 2018, Shawn's AGI is $170,000. He earned the income evenly throughout the year. He owed $29,890 in federal income tax 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 2018?

Accepted Answer

$7,308.
An...

Exam 8: Individual Income Tax Computation and Tax Credits

The wage base for which of the following taxes is capped?

Correct Answer
verified

Stephanie and Mitch are married and they file a joint tax return. Mitch received a slightly higher salary than Stephanie did during the year. They both make very high salaries. Which of the following statements is True?

Correct Answer
verified

Max is a 14-year-old dependent of his parents. During 2018, Max earned $1,800 working part time jobs and he received $1,500 of interest income from corporate bonds that were given to him last year. What is Max's 2018 taxable income?

Correct Answer
verified
$1,150
This consists of gross ...
View Answer

Correct Answer
verified
$7,308.
An...
View Answer

Both the width (or range) of the tax brackets (the amount of income taxed at a particular rate) in the tax rate schedules and the range of the tax rates in the tax rate schedules (the difference between the lowest tax rate and the highest tax rate) vary by filing status.

Correct Answer
verified

Clarissa's gross tax liability for 2018 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?

Correct Answer
verified
Refund of ...
View Answer

The late payment penalty is based on the amount of tax owed and the number of days that the tax is not paid. The maximum amount of the penalty is unlimited.

Correct Answer
verified

The Olympians have three children. The kiddie tax applies to unearned income received by which of the following children?

Correct Answer
verified

Regular taxable income is the starting point for determining the alternative minimum tax.

Correct Answer
verified

Which of the following taxpayers (all age 40) are required to file a return?

Correct Answer
verified

Which of the following statements about estimated tax payments and underpayment penalties is True for individual taxpayers?

Correct Answer
verified

John and Sally pay Janet (Sally's older sister) to watch John and Sally's child Dexter during the day. Janet cares for Dexter in her home. John and Sally may claim a child and dependent care credit based on the amount they pay Janet to care for Dexter.

Correct Answer
verified

Which of the following statement(s) concerning estimated tax payments and underpayment penalties for individuals is (are) True?

Correct Answer
verified

Which of the following statements regarding the child tax credit is False?

Correct Answer
verified

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold. This threshold is generally the ________.

Correct Answer
verified

Taxpayers are not allowed to deduct the standard deduction for alternative minimum tax purposes.

Correct Answer
verified

Exam 8: Individual Income Tax Computation and Tax Credits

The wage base for which of the following taxes is capped?

Correct AnswerverifiedShow Answer

Stephanie and Mitch are married and they file a joint tax return. Mitch received a slightly higher salary than Stephanie did during the year. They both make very high salaries. Which of the following statements is True?

Correct AnswerverifiedShow Answer

Max is a 14-year-old dependent of his parents. During 2018, Max earned $1,800 working part time jobs and he received $1,500 of interest income from corporate bonds that were given to him last year. What is Max's 2018 taxable income?

Correct Answerverified$1,150This consists of gross ...View AnswerShow Answer

Correct Answerverified$7,308.An...View AnswerShow Answer

Both the width (or range) of the tax brackets (the amount of income taxed at a particular rate) in the tax rate schedules and the range of the tax rates in the tax rate schedules (the difference between the lowest tax rate and the highest tax rate) vary by filing status.

Correct AnswerverifiedShow Answer

Clarissa's gross tax liability for 2018 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?

Correct AnswerverifiedRefund of ...View AnswerShow Answer

The late payment penalty is based on the amount of tax owed and the number of days that the tax is not paid. The maximum amount of the penalty is unlimited.

Correct AnswerverifiedShow Answer

The Olympians have three children. The kiddie tax applies to unearned income received by which of the following children?

Correct AnswerverifiedShow Answer

Regular taxable income is the starting point for determining the alternative minimum tax.

Correct AnswerverifiedShow Answer

Which of the following taxpayers (all age 40) are required to file a return?

Correct AnswerverifiedShow Answer

Which of the following statements about estimated tax payments and underpayment penalties is True for individual taxpayers?

Correct AnswerverifiedShow Answer

John and Sally pay Janet (Sally's older sister) to watch John and Sally's child Dexter during the day. Janet cares for Dexter in her home. John and Sally may claim a child and dependent care credit based on the amount they pay Janet to care for Dexter.

Correct AnswerverifiedShow Answer

Which of the following statement(s) concerning estimated tax payments and underpayment penalties for individuals is (are) True?

Correct AnswerverifiedShow Answer

Which of the following statements regarding the child tax credit is False?

Correct AnswerverifiedShow Answer

Taxpayers are not required to file a tax return unless their gross income passes a certain threshold. This threshold is generally the ________.

Correct AnswerverifiedShow Answer

Taxpayers are not allowed to deduct the standard deduction for alternative minimum tax purposes.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$1,150
This consists of gross ...
View Answer

Correct Answer
verified
$7,308.
An...
View Answer

Correct Answer
verified

Correct Answer
verified
Refund of ...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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