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Exam 13: Tax Credits and Payment Procedures

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Question 51

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A taxpayer's earned income credit is dependent on the number of his or her qualifying children.

A) True
B) False

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Question 52

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

A) True
B) False

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Question 53

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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.

The child tax credit is based on the number of the taxpayer's qualifying children under age 17.

If the cost of a building constructed and placed into service by an eligible small business in the current year includes the cost of a wheelchair ramp,the cost of the ramp qualifies for the disabled access credit.

Golden Corporation is an eligible small business for purposes of the disabled access credit.During the year,Golden makes the following expenditures on a structure originally placed in service in 1988. In addition,$8,000 was expended by Golden on a building originally placed in service in the current year to ensure easy accessibility by disabled individuals.Calculate the amount of the disabled access credit available to Golden Corporation.

An employer calculates the amount of income tax withheld from salary or wages based on the information an employee provides on the following form:

Which of the following correctly reflects current rules regarding estimated tax payments for individuals?

Which of the following issues does not need resolution in an employer's effort to comply with employment tax payment requirements?

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.

Which of the following correctly describes the tax credit for rehabilitation expenditures?

The work opportunity tax credit is available only for wages paid to qualifying individuals during their first year of employment.

The credit for child and dependent care expenses is an example of a refundable credit.

Jack and Jill are married,have three children,and have earnings during 2014 of $28,500.Do they qualify for the earned income credit? If so,calculate the amount of credit that is available to them.

Which,if any,of the following correctly describes the research activities credit?

Nonrefundable credits are those that reduce the taxpayer's tax liability but are not paid when the amount of the credit (or credits)exceeds the taxpayer's tax liability.

Some (or all)of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property.

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

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.Both children are subject to FICA withholding.

Steve has a tentative general business credit of $110,000 for the current year.His net regular tax liability before the general business credit is $125,000,and his tentative minimum tax is $100,000.Compute Steve's allowable general business credit for the year.