acc 241 - chapter 14
To claim the Lifetime Learning Credit, a student must take at least one-half of a full-time course load during the year.
False
The AMT minimum tax applies to individuals only if it exceeds the taxpayer's regular income tax.
True
The child and dependent care credit provides relief for working taxpayers who pay for care for younger children or an incapacitated dependent or spouse.
True
Nonrefundable credits may offset tax liability but may not result in additional payments to the taxpayer.
True
Brad and Shelly's daughter is starting her freshman year of college. They will be able to claim the American Opportunity Tax Credit for a percentage of the cost of tuition and room and board.
False
For purposes of the child and dependent care credit, qualifying employment-related expenses cannot include payments to a relative.
False
For the purposes of the AMT, the standard deduction, but not the personal and dependency exemption, is allowed.
False
If an employee has more than one employer during the year, all employers must withhold federal income taxes but only one employment must withhold FICA tax.
False
Qualified tuition and related expenses eligible for the American Opportunity Tax Credit are limited to those incurred the first two years of post secondary education.
False
Self-employed individuals are subject to the self-employment tax if their net earnings are more than the personal exemption amount.
False
A tax payer who paid AMT in prior years, but is not subjected to the AMT in the current year, may be entitled to an AMT credit against his regular tax liability in the current year.
True
Approximately one-half of the self-employment tax imposed is allowed as a for AGI deduction.
True
Casualty and theft losses in excess of 10% of AGI are deductible for AMT purposes.
True
If an individual is an employee and also has self-employment income, the maximum tax base for computing self-employment tax is reduced by the wages that are subject to the FICA tax.
True
If an individual is classified as an employee, the employer is required to withhold the employer's share of the FICA tax and to provide a matching amount.
True
Which one of the following is a refundable credit? a) earned income credit b) child and dependent care credit c) lifetime learning credit d) credit for the elderly and disabled
a) earned income credit
If an individual is liable for self-employment tax , a portion of the self-employment tax is a) for AGI b) from AGI c) a Schedule C d) non deductible
a) for AGI
Nonrefundable tax credits a) only offset a taxpayer's tax liability. b) may only be used if the taxpayer is receiving a refund. c) have expired but may be reinstated with the new tax legislation d) allow the excess over the taxpayer's liability to be paid to the taxpayer.
a) only offset a taxpayer's tax liability.
Max and Alexandra are married and incur $5,000 of qualifying expenses to care for their two children, ages 2 and 5,. Max's earned income is $35,000 and Alexandra's earnings from a part-time job are $5,000. What is the amount of the qualifying expenses for purposes of computing the child and dependent care credit? a) $3,000 b) $5,000 c) $5,500 d) $6,000
b) $5,000
The maximum amount of the American Opportunity Tax Credit for each qualified student is a) $1,500 b) $2,000 c) $2,500 d) $3,000
c) $2,500
In computing the AMT income, no deduction is allowed for a) alimony b) moving expenses c) personal exemptions d) individual retirement account contributions
c) personal exemptions
Refundable tax credits a) only offset a taxpayer's tax liability. b) may only be used if the taxpayer is receiving a refund. c) have expired but may be reinstated with the new tax legislation d) allow the excess over the taxpayer's liability to be paid to the taxpayer.
d) allow the excess over the taxpayer's liability to be paid to the taxpayer.
All of the following are allowable deductions under the AMT EXCEPT a) charitable contributions b) gambling loses c) qualified housing interest d) personal property taxes
d) personal property taxes