ACCT-104-CHAPTER 9 - HOMEWORK - QUIZ- EXTRA CREDIT
Nick and Katelyn paid $1,600 and $2,100 in qualifying expenses for their two daughters, Nicole and Naomi, respectively, to attend the University of Nevada. Nicole is a sophomore and Naomi is a freshman. Nick and Katelyn's AGI is $202,000. What is their allowable American opportunity tax credit?
$0. (The credit phases out completely for AGI greater than $180,000 for MFJ taxpayers.)
Sam is a single father with two dependent twin daughters, Amy and Amanda, ages 4. He has AGI of $31,000 and paid $5,300 to a qualified day care center. What amount of credit can Sam receive for child and dependent care credit?
$1,431. ( $5,300 × 27% = $1,431.)
Patricia is single and her son Quinn is age 11. If her AGI is $207,000, what amount of child tax credit can she claim?
$1,650.
Maria and Vincent, whose modified AGI is $169,000, adopted a little girl from Mexico which was finalized in 2019. They incurred a total of $16,000 in qualified adoption expenses. What is the amount of adoption credit they can claim in 2019?
$14,080. (Maximum allowed is $14,080.)
Kim paid the following expenses during November 2019 for her son Joshua's spring 2020 expenses, which begins in January 2020: Tuition$14,000 Housing 8,000 Meal plan 2,500 In addition, Kim's sister paid $800 for college fees on behalf of Joshua directly to the college. Joshua is claimed as Kim's dependent on her tax return. How much of the paid expenses qualify for purposes of the education credit deduction for Kim in 2019?
$14,800. ($14,000 + $800 = $14,800.)
Sam paid the following expenses during October 2019 for his son Aaron's spring 2020 college expenses: Spring 2020 semester begins in January 2020: Tuition$18,000 Housing 8,000 Meal plan 3,500 In addition, Aaron's uncle paid $500 for college fees on behalf of Aaron directly to the college. Aaron is claimed as Sam's dependent on his tax return. How much of the paid expenses qualify for purposes of the education credit deduction for Sam in 2019?
$18,500.
Sandra is single and her son Julius is 12 years old. If her AGI is $79,000, what amount of child tax credit can Sandra claim?
$2,000.
Mindy and Xavier have a total tax liability of $475 before EIC. Their EIC for the current year is $2,578. What is their total tax refund or tax owed for the current year (assume they have no other credits or additional tax liability)?
$2,103 tax refund. ($2,578 − $475 = $2,103 tax refund.)
Julia and Omar are married and file a joint tax return. They have two dependent daughters, ages 14 and 18. If their AGI is $98,000, what amount of child or other qualifying dependents tax credit can they claim?
$2,500
Matt is a single father. He paid $5,000 in qualifying expenses for his son, Kyle, to attend the University of Minnesota. Kyle is a sophomore. Matt's AGI is $47,000. What is his allowable American opportunity tax credit?
$2,500.
Casey and Lupe have AGI of $425,000. They have twin daughters, Ashley and Alley, ages 5. What amount of child tax credit can they claim?
$2,750. ([($425,000 − $400,000 = $25,000)/$1,000] = 25; $4,000 − ($50 × 25) = $2,750.)
Kyle and Alyssa paid $1,000 and $4,000 in qualifying expenses for their two daughters Jane and Jill, respectively, to attend the University of California. Jane is a sophomore and Jill is a freshman. Kyle and Alyssa's AGI is $137,000 and they file a joint return. What is their allowable American opportunity tax credit after the credit phase-out based on AGI is taken into account?
$3,500.
Shawn and Dahlia are married; both work and have one qualifying child. They had earned income of $19,000. What is their Earned Income Credit?
$3,526.
Joseph paid $1,750 in qualifying expenses for his daughter who attended a community college. How much is Joseph's lifetime learning credit without regard to AGI limitations or other credits?
$350.
Juan paid $1,750 in qualifying expenses for his daughter who attended a community college. How much is Juan's lifetime learning credit without regard to AGI limitations or other credits?
$350. ( $1,750 × 20% = $350.)
Edward and Ethel are ages 71 and 59, respectively, and file a joint return. They have AGI of $11,000 and received $2,000 in nontaxable social security benefits. How much can Edward and Ethel take as a credit for the elderly or the disabled?
$375. (($5,000 − $2,000 − $500) × 15% = $375.)
Bob and Joyce are married, file a joint return, and have one dependent child, Dane, age 9. Bob has earned income of $72,000. Joyce was a full-time student (for nine months) with no income. They paid a qualified day care center $4,000. What amount of child and dependent care credit can Bob and Joyce receive?
$450. ($250 × 9 months) × 20% = $450.)
Guillermo and Felicia are married, file a joint return, and have one dependent child; Hannah, age 6. Guillermo has earned income of $38,000. Felicia was a full-time student (for 8 months) with no income. They paid a qualified day care center $4,800. What is the amount of their child and dependent care credit for the year?
$460. (($3,000 × 8/12) × 23% = $460.)
Jillian is single and her son, Parker is 18 years old. If her AGI is $76,200, what is her child or qualifying dependent tax credit for Parker?
$500 (Qualifying child must be under age 17 for the child tax credit, but the $500 qualifying dependent tax credit is available.)
Kevin paid $2,550 in qualifying expenses for his daughter, Jasmine, who attended a community college. What is Kevin's lifetime learning credit without regard to AGI limitations or other credits?
$510.
Ian and Jolene are ages 70 and 72, respectively, and file a joint return. They have AGI of $15,000 and received $1,000 in nontaxable social security benefits. How much can Ian and Jolene take as a credit for the elderly or the disabled?
$600. (($7,500 − $1,000 − $2,500) × 15% = $600.)
Kobe is a single dad with two dependent children, Lizzie, age 7 and Leslie, age 3. He has AGI of $51,000 and paid $3,700 to a qualified day care center. What amount of credit can Kobe receive for the child and dependent care credit?
$740. ($3,700 × 20% = $740.)
Max and Nora have modified AGI of $75,000, and adopted a little boy from San Antonio, Texas, in the current year and incurred a total of $13,000 in qualified adoption expenses. In addition, Max's employer provided the couple with adoption benefits of $4,000. What is the maximum amount of adoption credit they can take this year?
$9,000.
Sean and Jenny are married, file a joint return and have two dependent children, Blake, age 9 and Jake, age 5. Sean has earned income of $72,000. Jenny was a full-time student (for nine months) with no income. They paid a qualified day care center $7,000. What amount of child and dependent care credit can Sean and Jenny receive?
$900. ($500 × 9 months (while in school) = $4,500; $4,500 × 20% = $900.)
Tuan and Marisa are married, file a joint return, and have two dependent children, Zack, age 6 and Aaron, age 5. Tuan has earned income of $72,000. Marisa was a full- time student (for nine months) with no income. They paid a qualified day care center $5,000. How much is Tuan and Marisa's child and dependent care credit for the year?
$900. (($500 × 9) × 20% = $900.)
Cooper is a single dad with 1 child and his total tax liability for the current tax year is $2,100. His EIC amount is $3,094 and he had no withholdings during the year. What amount of tax refund or tax owed would be on Cooper's tax return?
$994 tax refund.
Which of the following statements regarding adoption credits is not true?
Adoption of foreign country children does not qualify for the credit.
Which of the following conditions must be met for a taxpayer to be able to claim the foreign tax credit without filing Form 1116?
All of these must be met. (All of the foreign-source income is passive income. Total foreign taxes paid were less than $300 ($600 if married filing jointly). Taxpayer is not subject to foreign tax limitation rules.)
A qualifying child for the child tax credit must be a dependent and under the age of 14.
False
A taxpayer can receive both American opportunity tax and lifetime learning credits for the same education expenses in the same tax year.
False
The American opportunity tax and lifetime learning credits are available to taxpayers without any limitations due to AGI amounts.
False
The adoption credit is only available for domestic adoptions.
False
The child tax credit of $2,000 per child is available for taxpayers with children under the age of 18 as of the end of the tax year.
False
The earned income credit (EIC) is a nonrefundable credit.
False
The main goal of Congress in offering tax credits is to collect additional revenues.
False
The maximum allowable credit for the elderly or the disabled is equal to 30% of the taxpayer's base amount.
False
The retirement savings contributions credit is available for head of household taxpayers only.
False
The retirement savings contributions credit is available only for married filing joint taxpayers.
False
Which of the following statements is not true regarding the education credits?
The American opportunity tax credit is only available for the first two years of postsecondary education.
Which of the following statements regarding adoption credits is true?
The adoption credit may be limited if AGI amounts exceed certain levels.
Which of the following statements is true about education credits?
The lifetime learning credit may be limited by AGI levels and may completely phase out when modified AGI exceeds a certain amount (the amount depending on the tax year).
A qualifying individual for purposes of the credit for child and dependent care expenses includes a dependent or a spouse of the taxpayer who is incapable of caring for himself or herself who lived with the taxpayer at least half the year.
True
If the modified AGI of a married filing joint taxpayer exceeds $136,000 in 2019, the lifetime learning credit phases out completely.
True
The credit for child and dependent care expenses can only be claimed if a taxpayer incurs employment-related expenses to care for one or more qualifying individuals.
True
The maximum American opportunity tax credit is $2,500 per student per year.
True
The maximum amount per year of dependent care expenses that can be used for calculating the credit for child and dependent care expenses is $3,000 for one qualifying individual.
True
There are two types of education credits available, the American opportunity tax credit (also known as the Hope scholarship credit) and the lifetime learning credit.
True
Assuming that an AGI limitation does not apply, what amounts of credit for the elderly or the disabled would be permitted in each of the following instances?
a .A single taxpayer eligible for the credit who receives $2,000 of nontaxable social security benefits.$450 b.Taxpayers filing a joint return for which one taxpayer is eligible for the credit and the taxpayers have received no social security benefits.$750 c.Taxpayers filing a joint return, and both are eligible for the credit and received $4,000 of nontaxable social security benefits.$525
Assuming that an AGI limitation does not apply, what amounts of credit for the elderly or the disabled would be permitted in each of the following instances?
a .A single taxpayer eligible for the credit who receives $2,800 of nontaxable social security benefits. $330 b.Taxpayers filing a joint return for which one taxpayer is eligible for the credit and the taxpayers have received no social security benefits. $750 c.Taxpayers filing a joint return, and both are eligible for the credit and received $4,800 of nontaxable social security benefits. $405
Tim and Martha paid $6,700 in qualified employment-related expenses for their three young children who live with them in their household. Martha received $1,900 of dependent care assistance from her employer, which was properly excluded from gross income. The couple had $39,900 of AGI earned equally. Use Child and Dependent Care Credit AGI schedule. Required: What amount of child and dependent care credit can they claim on their Form 1040? How would your answer differ (if at all) if the couple had AGI of $37,200 that was earned entirely by Martha?
a. Child and dependent care tax credit: $902 b.Child and dependent care tax credit : $0
Tim and Martha paid $6,300 in qualified employment-related expenses for their three young children who live with them in their household. Martha received $1,500 of dependent care assistance from her employer, which was properly excluded from gross income. The couple had $39,500 of AGI earned equally. Use Child and Dependent Care Credit AGI schedule. Required: What amount of child and dependent care credit can they claim on their Form 1040? How would your answer differ (if at all) if the couple had AGI of $37,600 that was earned entirely by Martha?
a. Child and dependent care tax credit: $990 b.Child and dependent care tax credit : $0
