Question 1

The tax benefits resulting from tax credits and tax deductions are never affected by the tax rate bracket of the taxpayer.

Accepted Answer

A) True 
 B)False

Question 2

Kevin and Sue have two children,ages 8 and 14.They spend $6,200 per year on eligible employment related expenses for the care of their children after school.Kevin earned a salary of $20,000 and Sue earned a salary of $18,000.What is the amount of the credit for child and dependent care expenses?

Accepted Answer

A)   $690.
B)   $713.
C)   $1,380.
D)   $1,426.
E)   None of the above.F) C) and D)
G) A) and C)

Question 3

Qualified rehabilitation expenditures include the cost of acquiring the building,but not the cost of acquiring the land.

Accepted Answer

A) True 
 B)False

Question 4

Refundable tax credits include the:

Accepted Answer

A)   Foreign tax credit.
B)   Tax credit for rehabilitation expenses.
C)   Credit for certain retirement plan contributions.
D)   Earned income credit.
E)   None of the above.F) D) and E)
G) B) and D)

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true regarding the education tax credits?

Accepted Answer

A)   The lifetime learning credit is available for qualifying tuition and related expenses incurred by students pursuing only graduate degrees.
B)   The American Opportunity credit permits a maximum credit of 20% of qualified expenses up to $10,000 per year.
C)   The American Opportunity credit is calculated per taxpayer, while the lifetime learning credit is available per eligible student.
D)   Continuing education expenses do not qualify for either education credit.
E)   None of the above statements is true.F) D) and E)
G) A) and E)

Question 7

Only self-employed individuals are required to make estimated tax payments.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)   Ascertaining which employees and wages are covered by employment taxes and are subject to withholding for income taxes.
B)   Arriving at the amount to be paid and/or withheld.
C)   Reporting and paying employment taxes and income taxes withheld to the IRS on a timely basis through the use of proper forms.
D)   Each of the above issues needs to be resolved.
E)   None of the above is relevant to the employer.F) B) and C)
G) A) and B)

Question 9

An employee with outside income may be able to avoid the penalty for underpayment of estimated tax by having his employer increase income tax withholdings.

Accepted Answer

A) True 
 B)False

Question 10

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

Accepted Answer

The rehabilitation expenditures credit i...

Question 11

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.

Accepted Answer

Steve's allowable general business credi...

Question 12

The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older,economically distressed areas (i.e.,inner city)to newer locations.

Accepted Answer

A) True 
 B)False

Question 13

Which,if any,of the following correctly describes the earned income credit?

Accepted Answer

A)   Would be available regardless of the amount of the taxpayer's adjusted gross income.
B)   Not available to a surviving spouse.
C)   A taxpayer must have a qualifying child to take advantage of the credit.
D)   Is a refundable credit.
E)   None of the above.F) B) and D)
G) A) and D)

Question 14

If a taxpayer is required to recapture any tax credit for rehabilitation expenditures,the recapture amount need not be added to the adjusted basis of the rehabilitation expenditures.

Accepted Answer

A) True 
 B)False

Question 15

How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?

Accepted Answer

These taxes,commonly referred to as "pay...

Question 16

The tax credit for rehabilitation expenditures for certified historic structures differs from that for qualifying structures that are not certified historic structures.

Accepted Answer

A) True 
 B)False

Question 17

In 2011,Juan and Juanita incur $9,800 in legal and adoption fees directly related to the adoption of an infant son born in a nearby state.Over the next year,they incur another $4,500 of adoption expenses.The adoption becomes final in 2012.Which of the following choices properly reflects the amounts and years in which the adoption expenses credit is available. 2011 2012

Accepted Answer

A)   $9,800 $ 4,500
B)   None $12,650
C)   None $14,300
D)   $9,800 $ 2,850
E)   None of the above.F) A) and D)
G) B) and E)

Question 18

Jermaine and Kesha are married,file a joint tax return,have AGI of $82,500,and have two children.Devona is beginning her freshman year at State University during Fall 2012,and Arethia is beginning her senior year at Northeast University during Fall 2012 after having completed her junior year during the spring of that year.Both Devona and Arethia are claimed as dependents on their parents' tax return.Devona's qualifying tuition expenses and fees total $4,000 for the fall semester,while Arethia's qualifying tuition expenses and fees total $6,200 for each semester during 2012.Full payment is made for the tuition and related expenses for both children during each semester.The American Opportunity credit available to Jermaine and Kesha for 2012 is:

Accepted Answer

A)   $2,500.
B)   $3,000.
C)   $5,000.
D)   $6,000.
E)   None of the above.F) All of the above
G) A) and B)

Question 19

Qualified research and experimentation expenditures are not only eligible for the 20% tax credit,but also can be expensed in the year incurred.

Accepted Answer

A) True 
 B)False

Question 20

Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.

Accepted Answer

A) True 
 B)False

Exam 13: Tax Credits and Payment Procedures

If a taxpayer is required to recapture any tax credit for rehabilitation expenditures,the recapture amount need not be added to the adjusted basis of the rehabilitation expenditures.

Correct Answer
verified

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

Correct Answer
verified

The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older,economically distressed areas (i.e.,inner city)to newer locations.

Correct Answer
verified

Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The tax credit for rehabilitation expenditures for certified historic structures differs from that for qualifying structures that are not certified historic structures.

Correct Answer
verified

The tax benefits resulting from tax credits and tax deductions are never affected by the tax rate bracket of the taxpayer.

Correct Answer
verified

Only self-employed individuals are required to make estimated tax payments.

Correct Answer
verified

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

Correct Answer
verified
The rehabilitation expenditures credit i...
View Answer

Refundable tax credits include the:

Correct Answer
verified

Which,if any,of the following correctly describes the earned income credit?

Correct Answer
verified

An employee with outside income may be able to avoid the penalty for underpayment of estimated tax by having his employer increase income tax withholdings.

Correct Answer
verified

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.

Correct Answer
verified
Steve's allowable general business credi...
View Answer

Qualified research and experimentation expenditures are not only eligible for the 20% tax credit,but also can be expensed in the year incurred.

Correct Answer
verified

Qualified rehabilitation expenditures include the cost of acquiring the building,but not the cost of acquiring the land.

Correct Answer
verified

Kevin and Sue have two children,ages 8 and 14.They spend $6,200 per year on eligible employment related expenses for the care of their children after school.Kevin earned a salary of $20,000 and Sue earned a salary of $18,000.What is the amount of the credit for child and dependent care expenses?

Correct Answer
verified

How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?

Correct Answer
verified
These taxes,commonly referred to as "pay...
View Answer

Which of the following statements is true regarding the education tax credits?

Correct Answer
verified

Exam 13: Tax Credits and Payment Procedures

If a taxpayer is required to recapture any tax credit for rehabilitation expenditures,the recapture amount need not be added to the adjusted basis of the rehabilitation expenditures.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older,economically distressed areas (i.e.,inner city)to newer locations.

Correct AnswerverifiedShow Answer

Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The tax credit for rehabilitation expenditures for certified historic structures differs from that for qualifying structures that are not certified historic structures.

Correct AnswerverifiedShow Answer

The tax benefits resulting from tax credits and tax deductions are never affected by the tax rate bracket of the taxpayer.

Correct AnswerverifiedShow Answer

Only self-employed individuals are required to make estimated tax payments.

Correct AnswerverifiedShow Answer

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

Correct AnswerverifiedThe rehabilitation expenditures credit i...View AnswerShow Answer

Refundable tax credits include the:

Correct AnswerverifiedShow Answer

Which,if any,of the following correctly describes the earned income credit?

Correct AnswerverifiedShow Answer

An employee with outside income may be able to avoid the penalty for underpayment of estimated tax by having his employer increase income tax withholdings.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedSteve's allowable general business credi...View AnswerShow Answer

Qualified research and experimentation expenditures are not only eligible for the 20% tax credit,but also can be expensed in the year incurred.

Correct AnswerverifiedShow Answer

Qualified rehabilitation expenditures include the cost of acquiring the building,but not the cost of acquiring the land.

Correct AnswerverifiedShow Answer

Kevin and Sue have two children,ages 8 and 14.They spend $6,200 per year on eligible employment related expenses for the care of their children after school.Kevin earned a salary of $20,000 and Sue earned a salary of $18,000.What is the amount of the credit for child and dependent care expenses?

Correct AnswerverifiedShow Answer

How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?

Correct AnswerverifiedThese taxes,commonly referred to as "pay...View AnswerShow Answer

Which of the following statements is true regarding the education tax credits?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The rehabilitation expenditures credit i...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Steve's allowable general business credi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
These taxes,commonly referred to as "pay...
View Answer

Correct Answer
verified