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Exam 8: Individual Income Tax Computation and Tax Credits

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Question 81

True/False

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Individuals may file for and receive a six-month extension of time to file their tax return and pay their taxes without penalty.

A) True
B) False

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Question 82

Multiple Choice

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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) C) and D)
F) None of the above

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Question 83

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Katlyn reported $300 of net income from her sole proprietorship.She is not required to pay self-employment tax.

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?

Which of the following does not affect the amount of the earned income credit?

Employee status is always better than independent contractor status for a taxpayer because the employee is responsible for paying the employee portion of the FICA taxes.

Allen Green is a single taxpayer with an AGI (and modified AGI) of $210,000, which includes $170,000 of salary, $25,000 of interest income, $10,000 of dividends, and $5,000 of long-term capital gains.What is Allen's net investment income tax liability this year, rounded to the nearest whole dollar amount?

Selene made $54,300 in 2019 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?

Which of the following statements regarding the earned income credit is true?

Which of the following statements regarding the AMT exemption amounts is not true?

Angelena files as a head of household.In 2019, she reported $53,450 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, long-term capital gains tax brackets.)

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

If both spouses of a married couple earn roughly equivalent high levels of wages, the couple is likely to pay a marriage penalty due to the nature of the tax rate schedules.

Paul and Melissa plan on filing jointly in 2019.For the year, the couple reported taxable income of $130,000.What is their gross tax liability? (Use Tax rate schedules.)