Tax Quiz 6 1 of 2

The Nonbusiness Energy Property Credit has a lifetime limit of $500, of which only ______ may be used for windows

$200

Mr. and Mrs. Smyth are both employed full time, Monday through Friday, from 8AM to 5PM. Mr. Smyth had earned income of $40,000 and Mrs. Smyth had earned income of $44,000 and their total adjusted gross income was $84,000. They filed married joint, used Form 1040 and the amount on line 18 of Form 1040 is $12,000. They have an eight-year-old daughter, who goes to school during the day, and the Smyth's paid a total of $5,100 in tuition for her schooling and $3,400 to the school she attends, for aft

$600; Key figures from IRS Form 2441 are as follows:Line 3, $3,000 (Note that the tuition expense of $5,100 does not factor into the credit as school tuition paid is not eligible for child care expense credit).Line 4, $44,000 (earned income)Line 5, $40,000 (lesser of the two incomes for Mr. and Mrs. Smyth)Line 6, $3,000 (smaller of lines 3, 4, and 5)Line 7, $84,000 (total adjusted gross income)Line 8, 0.20 (based on the table provided on Form 2441 and the Smyths' AGI of $84,000)Line 9a, $600 (3,000 x .20 = $600)Line 10, $12,000 (amount from the credit limit worksheet in the instructions) Line 11, $600 (The credit that can be taken. Note that this credit is a refundable credit if a taxpayer, or their spouse if married filing jointly, had a principal place of abode in the United States for more than half of 2022).

James and Janet Jones file married joint, file Form 1040 and have five dependent children who live with them, aged two, four, five, nine, and ten years old. Their adjusted gross income (AGI) and earned income were the same, $68,000 for the year and their tax liability before credits and adjustments. The amount on line 18 of Form 1040 was $8,000. The Jones' are not eligible for the Child and Dependent Care Expense Credit, Education Credits, or any other credits that could reduce or eliminate th

. $2,000

A qualified physician must certify that the condition that has caused an individual permanent and total disability has lasted or can be expected to last continuously for ___ or more, or that the condition can be expected to result in death. Select one:

12 months

Which of the following conditions must be met in order to be considered on permanent and total disability for purposes of the Credit for the Elderly or the Disabled? Select one: a.They must be 65 years of age or older b.A physician must certify that the condition has lasted or can be expected to last for 12 months or longer or that the condition can be expected to result in death c.They have not been employed for at least six months. d.All of the above are conditions that must be met

A physician must certify that the condition has lasted or can be expected to last for 12 months or longer or that the condition can be expected to result in death

Concerning the Credit for the Elderly or the Disabled, which of the following is not a necessary condition to be met by a qualified individual? Select one: a.Generally, must be a U.S. citizen or resident alien b.The individual's income is not more than certain limits c.Must be age 65 or older or retired on permanent and total disability d.Must file as Married Filing Joint, or Head of Household or Single

Must file as Married Filing Joint, or Head of Household or Single

In order to claim the EIC, the taxpayer, spouse and children must all have a social security number. Form ___ from the social security administration is filed to obtain an SSN.

SS-5

Which of the following individuals may be eligible for the Premium Tax Credit? Select one: a.Someone whose employer does not offer health insurance b.Their employer-offered health insurance plan covers less than 80% of covered benefits c.They qualify for government programs like Medicare and Medicaid d.All of the above are eligible e.A and B are eligible

Someone whose employer does not offer health insurance

Which of the following is a correct statement regarding the difference between the Child Tax Credit and the Additional Child Tax Credit?

The Additional Child Tax Credit is Refundable and the Child Tax Credit is not

Which of the following statements concerning the Earned Income Credit are false? Select one: a.A qualifying child cannot be used by more than one person to claim the EIC b.An adopted child is always treated as one's own child. It also includes a child lawfully placed with them for adoption c.The child must have applied for a social security number d.None of the above is false

The child must have applied for a social security number

The Earned Income Credit is a refundable credit. This means

The credit will offset tax liabilities and any unused portion of the credit will be refunded to the taxpayer along with any other refunds in the year that the tax return is filed

A taxpayer is considered 65 years or older for the purposes of taking the Credit for the Elderly on ______

The day before their 65th birthday

In order to obtain the required information from a care provider related to the Child and Dependent Care Credit, the taxpayer can use Form ____ to request the information.

W-10

Which of the following is a condition for filing the Additional Child Tax Credit? Select one: a.A taxpayer must have a qualifying child under the age of 17 b.A taxpayer must file Form 1040 c.A taxpayer must be over the age of 25 d.All of the above are conditions that must be met

A taxpayer must have a qualifying child under the age of 17

The Health Coverage Tax Credit (HCTC) is a tax credit that pays 72.5 percent of qualified health insurance premiums for eligible individuals and their families. The HCTC acts as partial reimbursement for premiums paid for qualified health insurance coverage and can be claimed for qualified coverage through 2020. Which of the following statements is false concerning the HCTC?

An individual is eligible to elect the HCTC in any month that they are enrolled in ACA Marketplace insurance.

Which of the following are included in the four due diligence requirements that a tax preparer must meet when preparing a return that includes EITC? Select one: a.The tax preparer must personally identify all minor children included in the EITC computation b.Complete the form with the information the tax preparer gets from their client and document, at the time of the interview, any additional questions asked and their client's response c.The tax preparer must retain the EITC records for 1 one

Complete the form with the information the tax preparer gets from their client and document, at the time of the interview, any additional questions asked and their client's response

What is the Retirement Savers Contribution Credit (Savers Credit)?

Could result in a tax credit for contributors to a traditional or Roth IRA

The AMT is caused by two types of adjustments and preferences—deferral items and exclusion items. Deferral items (for example, depreciation) generally do not cause a permanent difference in taxable income over time. Exclusion items (for example, the standard deduction), on the other hand, do cause a permanent difference. The minimum tax credit is allowed for: Select one: a.Deferral items only b.Exclusion items only c.Both deferral and exclusion items

Deferral items only

If an individual paid for someone to care for their child or another qualifying person so they and their spouse could work or look for work, they may be able to claim a credit for the expenses for filing IRS Form 2441. A taxpayer must have earned income to qualify (a spouse who is a student or disabled may also qualify). File Form 2441 to receive dependent care benefits that can be excluded from income (normally shown in box 10 of IRS Form W-2). Which of the following individual's care would q

a. An 11-year-old child whom they can claim as a dependent;A qualifying child must be under the age of 13 to qualify. When the child turns 13, only expenses incurred for their care during the period of time during the tax year that the child was under the age of 13 will qualify for credit. In order for dependent care expenses to qualify, if the spouse or dependent age 13 or over is physically or mentally incapable of caring for themselves and lived with them for more than half the year Expenses to clean the house is not an expense related to the person's actual care. A short term recovery from surgery will not qualify for the credit.

Which of the following will be counted as earned income for purposes of determining EIC eligibility? Select one: a.A salary received for work as a restaurant manager b.Commission received from an employer for obtaining ten credit card applications c.Tips received as a taxi driver d.All of the above will be counted as earned income

a.A salary received for work as a restaurant manager b.Commission received from an employer for obtaining ten credit card applications c.Tips received as a taxi driver

To receive a credit for a contribution to a Retirement Savings Contribution Credit (also know as the "Saver's Credit"), the actual tax break the taxpayer will receive depends upon which of the following?

a.A taxpayer's income b.A taxpayer's filing status c.How much the taxpayer puts into a retirement plan

Qualified adoption expenses are reasonable and necessary expenses and can include which of the following expenses?

a.Adoption Fees b.Court Costs c.Attorney Fees

Concerning the Credit for the Elderly or the Disabled, which of the following conditions must apply for an individual to be eligible for the credit? Select one: a.Generally, must be a U.S. citizen or resident alien b.The individual is under 65 at the end of the year and is retired on permanent and total disability and all other conditions have been met c.The individual is under 65 d.A and B are correct

a.Generally, must be a U.S. citizen or resident alien b.The individual is under 65 at the end of the year and is retired on permanent and total disability and all other conditions have been met

Which of the following individuals might possibly be eligible to file Schedule R, Credit for the Elderly or the Disabled, with their completed Form 1040? Select one: a.Harry who is a 67 year old retired postal worker. b.Jennifer who is 56 years old and no longer able to continue work as a nurse because she is permanently and totally disabled c.Ryan, a 36 year former old race car driver who retired last year because his failing eye sight no longer allowed him to compete. He is now writing for a s

a.Harry who is a 67 year old retired postal worker. b.Jennifer who is 56 years old and no longer able to continue work as a nurse because she is permanently and totally disabled

An individual can not take a credit for foreign income taxes paid on income they exclude from U.S. tax under which of the following conditions?

a.Income from Puerto Rico exempt from U.S. tax b.Foreign Earned Income Exclusion c.Possession exclusion

To identify the child care provider on a tax return, they taxpayer must give the provider's

a.Name b.Address c.Taxpayer Identification Number

In order to claim the American Opportunity credit the student must have a which of the following?

a.Social Security Number (SSN) b.Adoption Taxpayer Identification Number (ATIN) c.Individual Taxpayer Identification Number (ITIN)

Which of the following taxpayers may not be eligible for the Child Tax Credit? Select one: a.Tax filers of Form 1040 b.A taxpayer with only one dependent child c.A taxpayer with a child that is 15 years old d.All of the taxpayers above are eligible to file

a.Tax filers of Form 1040 b.A taxpayer with only one dependent child c.A taxpayer with a child that is 15 years old

Which of the following statements concerning the Additional Child Tax Credit is true? Select one: a.The Additional Child Tax Credit is a refundable tax credit, meaning that it can actually increase a taxpayer's refund or provide a refund even if no taxes were paid b.Taxpayers with no earned income may be eligible for the Additional Child Tax Credit c.If the Additional Child Tax Credit increases a taxpayers tax refund, the additional funds received will be used to determine eligibility for certai

a.The Additional Child Tax Credit is a refundable tax credit, meaning that it can actually increase a taxpayer's refund or provide a refund even if no taxes were paid

Which of the following are not conditions that must be met in order for a child to be a qualifying child for purposes of the child tax credit

b. The child must have lived with the taxpayer for the entire year