Module 8-14

What is the maximum amount the additional child tax credit allows taxpayers to claim per qualifying child?

$1000

What is the maximum amount the child tax credit allows taxpayers to claim per qualifying child?

$1000

What is the lowest percentage used to compute the tax credit for child and dependent care expenses?

$20.00

For the tax credit for child and dependent care expenses, what are the maximum qualifying expenses for a taxpayer with four qualifying dependents?

$6000

Which person cannot be claimed as a qualifying child?

A 5-year-old sister whose mother is claiming the credit with this child

Which option is available for a taxpayer receiving a refund?

Direct deposit in the taxpayer's bank account

Tax professional who electronically transmits tax returns to the IRS

ERO

Self-employment earnings are classified as what type of income?

Earned

What does ERO stand for?

Electronic Return Originator.

House painter who works for A-1 Painting

Employee

Pizza delivery driver for Number 1 Pizza

Employee

Restaurant critic for the newspaper

Employee

Who prepares Form W-2?

Employer

Which form reports payments made to independent contractors?

Form 1099-MISC

Which form reports salary payments made to employees?

Form W-2

Interest and dividends are classified as what type of income?

Investment

The process by which the taxpayer completes the tax return online and electronically submits it to the IRS

Online, Self-prepared

Used to authenticate an electronically transmitted tax return

PIN

What is used by IRS to authenticate an electronically transmitted return?

PIN

Which of the following individuals is eligible for the American Opportunity Credit?

Paulo, who is taking at least one-half of the normal course load required for the computer science associate's degree program, attending classes the entire school year

What does PIN stand for?

Personal Identification Number

Which tax form is used to calculate self-employment profit?

Schedule C

Which tax form is used to calculate the self-employment tax?

Schedule SE

Book reviewer for numerous magazines and newspapers who decides what books he is willing to review and when he will do the review

Self-employed

House painter who works for herself

Self-employed

Who completes Schedule SE?

Self-employed

A yoga instructor who gives classes in her home

Self-employed.

What is reduced by the earned income credit?

Tax

A taxpayer tax liability can be reduced to $0 and still receive a refund with which tax credit?

The refundable additional child tax credit

All taxpayers can make tax payments using a direct debit from their bank account.

false

Both the American Opportunity Credit and Lifetime Learning Credit can be claimed if a taxpayer has paid higher education expenses for an eligible student as long as they meet the general requirements.

false

Completing all of the forms and schedules needed to compute and report the tax is known as ERO.

false

For the earned income credit, there is no adjusted gross income limit.

false

If adjusted gross income is the same, the highest earned income credit is for a taxpayer without a qualifying child.

false

A convenience fee is charged for credit card payments made through a service provider.

true

A tax deduction reduces the income subject to tax.

true

A tax payment can be made by check

true

A tax refund can be received by direct deposit to a taxpayer's bank account.

true

If they meet the requirements, taxpayers may be able to claim both the child tax credit and the additional child tax credit.

true

The taxpayer can receive the earned income credit even if the taxpayer's tax is zero.

true

Are there circumstances when a taxpayer with an unemployed spouse can claim the tax credit for child and dependent care expenses?

yes

Can an unemployed taxpayer who is actively seeking work claim the tax credit for child and dependent care expenses?

yes

Which taxpayer can claim the earned income credit if all other requirements are met?

A taxpayer who earned $5,000 in self-employment income

Taxpayers maintain good records to

All of the above

Which of the following is an example of a double benefit?

Kristin, who claims the American Opportunity Credit for expenses paid with a Pell grant

Mateo takes part-time classes at a local university. He is now a junior in college. Which credit is he eligible for?

Lifetime Learning Credit

The highest earned income credit is for taxpayers with how many qualifying children?

Three or more