Ch 9 QUIZ

Mr. And Mrs. Z have four children ranging in age from two to ten. Mr. Z has wages of $80,000 and Mrs. Z $25,000. Two of the children went to nursery school at a total cost of $8,000. The two older children attended a qualified after school program that costs $2,500. Mr. Z received dependent care benefits from his employer of $5,000 that was not included in his income. What amount of childcare expenses can be used to determine the credit on their return? a. $1,000 b. $3,000 c. $6,000 d. $10,500

$1000

For purposes of the student loan interest deduction, when does phase out begin and when is the deduction fully phased out on a Married Filing Joint return? a. No phase out b. $125,000-$210,000 c. $70,000-$85,000 d. $140,000-$170,000

$140,000-$170,000

A taxpayer has two dependent children who are attending an accredited college. His son is a senior who spent $11,000 for tuition and fees. His daughter is a freshman and had tuition expenses for $4,000. The taxpayer meets all the income and filing status requirements for the education credits. There is no tax-free assistance to pay these expenses. What is the maximum credit that he may claim on his tax return? a. $5,000 American Opportunity Credit. Correct b. $2,500 American Opportunity Credit and $2,500 Lifetime Learning Credit. c. $2,200 American Opportunity Credit and $2,000 Lifetime Learning Credit. d. $2,500 American Opportunity Credit. Incorrect AOC.

$5,000 American Opportunity Credit

To qualify for the earned income credit, a taxpayer cannot be a qualifying child of another person. A taxpayer is the qualifying child of another person if: a. The taxpayer is the other person's child, adopted child, stepchild, grandchild, or eligible foster child b. The taxpayer is under age 19, under age 23 and a full-time student, or any age and permanently and totally disabled at any time during the year. c. The taxpayer lived with that person in the U.S. for more than half a year (all year if an eligible foster child). d. All of the these

All of the these

What information is required from a caregiver for purposes of claiming the Child Care Credit? a. Daycare Name b. Address c. All of the these d. EIN or SSN e. None of the these f. Phone number

All of these

Which form is used to claim education credits? a. Form 8863 b. Form 8867 c. Form 2441 d. None of the these e. All of the these

Form 8863

A married couple both work full time. They have three children ages 18, 6, and 3. For purposes of claiming the Child Care Credit, which of the following expenses qualify? a. Payments to the taxpayer's 18-year-old daughter to care for her 3-year-old sister. b. Payments to the husband's mother who cares for the children and lives with them but does not qualify as their dependent. c. Payments to a private school for their 6yr old to attend the first grade. d. Payments to the taxpayer's 20-year-old niece who lives with them and can be claimed as their dependent.

Payments to the husband's mother who cares for the children and lives with them but does not qualify as their dependent.

Which of the following statements is NOT true regarding tax benefits for education? Choose one answer. a. The lifetime Learned Credit allowed for tuition paid for graduate program studies. b. The dollar limitation for the American Opportunity Credit are calculated on a per student basis. c. The American Opportunity Credit may be claimed for tuitrse relion expenses incurred in the first 4 years of post-secondary education. d. Room and board are qualifying expenses for all education credits.

Room and board are qualifying expenses for all education credits.

A single taxpayer received a Form 1099-DIV from her global mutual fund that showed dividend income of $500 and foreign taxes withheld of $67. The is the only foreign source income she received for the year. Her income tax before any credits is $4,320. On which of the following forms may she elect to claim a credit for the foreign tax paid? a. Form 1040, Schedule A, itemized Deductions, line 6, "other taxes" b. Schedule 5 (Form 1040) as a refundable credit. c. Schedule 3 (Form 1040) as a no refundable credit. d. Form 1040, Schedule B, by electing to reduce the dividend income by $67.

Schedule 3 (Form 1040) as a no refundable credit.

Which of the following statements is NOT true regarding the child tax credit? a. The child tax credit is nonrefundable and reduces tax owed while the additional child tax credit is refundable and is treated as a payment on form 1040. b. The child tax credit may be limited depending on modified adjusted gross income. c. A qualifying child can be a nonresident alien d. The maximum child tax credit for each qualifying child is $2,000

A qualifying child can be a nonresident alien

Which of the following is NOT a qualified adoption expense? a. Court Costs b. Expenses for carrying out any surrogate parenting arrangement. c. Attorney Fees d. Travel expenses

Expenses for carrying out any surrogate parenting arrangement.

The earned income credit is available to all of the following EXCEPT: Choose one answer. a. Persons with investment income of $3,600 or more b. Persons with a qualifying child. c. Persons without a qualifying child d. Some resident Aliens.

Persons with investment income of $3,600 or more