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Exam 8: Individual Income Tax Computation and Tax Credits

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Question 91

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Maria and Tony are married. They are preparing to file their 2020 tax return. If they were to file as single taxpayers, Maria and Tony would report $40,000 and $60,000 of taxable income, respectively. On their joint tax return, their taxable income is $100,000. How much of a marriage penalty or benefit will Maria and Tony experience in 2020? (Use tax rate schedules.)

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Filing jointly will result in a "marriag...

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Question 92

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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?

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$690.
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Question 93

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Atlas earned $17,300 from his sole proprietorship in 2020. This was his only source of income. How much in self-employment taxes will Atlas be able to deduct?

The amount of expenditures eligible for the child and dependent care credit is the least of three amounts. Which of the following is not one of those amounts?

Harmony reports a regular tax liability of $15,000 and tentative minimum tax of $17,000. Given just this information, what is her alternative minimum tax liability for the year?

Assume Georgianne underpaid her estimated tax liability by $150 in the first quarter of 2021, $500 in the second quarter, $400 in the third quarter, and $200 in the fourth quarter. Calculate her underpayment penalty for 2021, assuming the federal short-term interest rate is 5 percent.

Akiko and Hitachi (married filing jointly for 2020)are both educators. They attended a conference to further their job-related skills. Tuition for the conference was $2,000 for each person. Their AGI was $124,000. How much lifetime learning credit can they claim?

If a married couple has one primary breadwinner, filing a joint return will likely result in a marriage penalty.

Which of the following is not one of the general tax credit categories?

The alternative minimum tax base is typically _____ the regular income tax base.

Quantitatively, what is the relationship between the AGI phase-out thresholds for the child tax credit?

In certain circumstances a child with very little income may have at least a portion of their income taxed at the trust and estate tax rates.

Miley, a single taxpayer, plans on reporting $31,125 of taxable income this year (all of her income is from a part-time job) . She is considering applying for a second part-time job that would give her an additional $10,000 of taxable income. By how much will the income from the second job increase her tax liability? (Use the tax rate schedules.)

Angelena files as a head of household. In 2020, she reported $56,000 of taxable income, including a $15,100 qualified dividend. What is her gross tax liability? (Round your answer to the nearest whole dollar amount.) (Use the tax rate schedules, long-term capital gains tax brackets)

Miley, a single taxpayer, plans on reporting $31,525 of taxable income this year (all of her income is from a part-time job) . She is considering applying for a second part-time job that would give her an additional $10,400 of taxable income. By how much will the income from the second job increase her tax liability? (Use the tax rate schedules.)

Lexa, a single taxpayer, worked as an employee during the first half of the year, earning $65,000 of salary. Lexa's employer withheld $4,030 of Social Security tax, $943 of Medicare tax, and $0 of additional Medicare tax. In the second half of the year, she was self-employed and she reported $180,000 of self-employment income on her Schedule C. What amount of self-employment taxes and additional Medicare tax is Lexa required to pay on her self-employment income? (Round intermediate calculations and final answer to the nearest dollar.)

Long-term capital gains, dividends, and taxable interest income are all taxed at preferential rates.

The computation of the alternative minimum tax base begins with regular taxable income. Which of the following is not part of the formula for computing the alternative minimum tax base?