FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Individual Income Tax Computation and Tax Credits

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

If an employer withholds taxes from an employee, in general, when are these taxes treated as paid to the IRS?

A) As withheld
B) As the employee requests on his/her W-4 form
C) Evenly throughout the year
D) On April 15

E) C) and D)
F) B) and C)

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

Why would a taxpayer file a tax return if not required to do so?

A) to remain in favor with the IRS
B) to claim a refund of taxes paid
C) all taxpayers are required to file returns
D) in order to claim the standard deduction

E) None of the above
F) B) and D)

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

Which of the following statements regarding the child and dependent care credit is false?

Jack paid $5,000 in daycare expenses for his five-year-old daughter so he could work. His AGI for the year was $37,500 (all earned income). What is the amount of his child and dependent care credit?

Montague (age 15) is claimed as a dependent by his parents Matt and Mary. In 2014, Montague received $5,000 of qualified dividends and he received $800 from a part time job. What is his taxable income for 2014?

The alternative minimum tax system requires taxpayers to apply an alternative tax rate on the regular income tax base to determine the amount of the alternative minimum tax.

All else equal, a reduction in regular income tax rates would require more taxpayers to pay the alternative minimum tax.

Which of the following is not a barrier to income shifting among family members?

Angelena files as a head of household. In 2014, she reported $50,000 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability, rounded to the nearest whole dollar amount (use the tax rate schedules) ?

Rhianna and Jay are married filing jointly in 2014. They have six children for whom they may claim the child tax credit. Their AGI was $123,440. What amount of child tax credit may they claim on their 2014 tax return?

A marriage penalty occurs when a couple pays more taxes by filing a joint tax return than they would have paid had they filed married filing separate returns.

Baker earned $225,000 of salary as an employee in 2014. How much should his employer have withheld from his paycheck for FICA taxes (rounded to the nearest whole dollar amount) ?

Business credits are generally refundable credits.

For married couples, the Social Security wage base limitation applies separately to each spouse.

For alternative minimum tax purposes, taxpayers are allowed to deduct state income taxes but are not allowed to deduct charitable contributions.

Hester (age 17) is claimed as a dependent by his parents, Charlton and Abigail. In 2014, Hester received $10,000 of qualified dividends and he received $6,000 from a part time job. What is his taxable income for 2014?

All capital gains are taxed at preferential rates.

What is the underpayment penalty rate that taxpayers pay when they underpay their estimated taxes?

Parents may claim a child and dependent care credit for expenses incurred in providing for their dependents while the parents work as long as the children are over age 14 and under age 20 at year end.

Selene made $54,300 in 2014 working at the local burger joint, Moon Café. How much should her employer withhold from her paycheck for FICA taxes if the calculation is made correctly?