Smartbook Chapter 14

Molly was employed by Inside Interiors from January to July, earning $70,000 and with Middlebrook Designs from August to December, earning $100,000. For 2027, her excess social security credit is $___

1,426

Larissa and Louis are married and file jointly. They report $65,000 of taxable income. Included in the taxable income number is $1,000 of dividend income subject to a 0% preferential tax rate. Their joint income tax liability is ___. 1. $7,389 2. $7,269 3. $6,815

2

Lily is unmarried with no dependents. In 2021, Lily reports $97,000 of AGI. Included in AGI is $20,600 of qualified business income and a deduction of $600 for self-employment tax. She also reports $13,000 of itemized deductions. Lily's taxable income is __​_. 1. $67,800 2. $80,000 3. $93,000 4. $73,000

2

Luis and Marcella are married and file a joint return. In 2022, they report taxable income of $172,000. The 2022 federal income tax is: 1. $37,840 2. $29,074 3. $35,272

2

Michael is claimed as a dependent on his parent's tax return. This year, he earned $600 from mowing lawns and $220 in dividend income from stock gifted to him several years ago from his grandparents. His standard deduction for is _blank​_. 1. $1,400 2. $1,150 3. $12,950

2

Mildred and Milton and married and filing a joint return. Mildred is 72 years old and blind. Milton 70 years old. Their standard deduction is ___. 1. $27,300 2. $30,100 3. $28,700 4. $25,900

2

Mr. and Mrs. Backlund file a joint return. They provide more than 50% support for their three children, Lindsay (age 27, full-time college student, earned $10,000 from part-time job), Louisa (age 21, full-time college student, earned $17,000 from part-time job) and John (age 17, earned no income). All three children live full time in the Backlund's home. Which of the following statements is true? 1. All three are qualifying children of the Backlunds. 2. Both John and Louisa are qualifying children of the Backlunds. 3. John is the only qualifying child of the Backlunds.

2

Qualified dividend income is ___. 1. included in the tax computation below-the-line 2. permitted a preferential tax rate 3. not included in the computation of taxable income because it is subject to a preferential rate

2

Tax credits ___. 1. reduce taxable income by $1 for every $1 of credit 2. reduce the tax liability by $1 for every $1 of credit 3. increase AGI for every $1 of credit

2

The AMT exemption is ___. 1. is phased-out in an amount equal to 25% of AMTI in excess of the AMTI threshold 2. available to all taxpayers 3. is the same for regardless of income and filing status

2

The Alternative Minimum Tax (AMT) computation _blank​_. 1. is consistent for corporate and individual taxpayers 2. has a carryforward provision to alleviate the AMT tax burden for taxpayers who are only subject to AMT on a very temporary basis 3. provides taxpayers the opportunity to select and apply the most advantageous method for computing tax (regular or AMT).

2

The QBI deduction is ___. 1. is a result of the taxpayer earning dividend or interest income 2. is deducted from AGI 3. a deduction permitted in arriving at AGI (above-the-line

2

The child credit ___. 1. is only permitted for the first four children in the case of a taxpayer who files head of household, and six children for a couple filing jointly 2. provisions provide a reduced credit for certain non-child dependents 3. is partially phased-out for high income taxpayers

2

The practice of timing itemized deductions to concentrate them in a single year is referred to as ___. 1. sheltering 2. bunching 3. tax evasion

2

The safe-harbor estimate provision ___. 1. applies only to sole proprietors with business ventures that are profitable in the current year 2. provides taxpayers with certainty because accurately estimating current year tax obligation can be difficult 3. allows all taxpayers to avoid an underpayment penalty if tax payments equal to 100% of the prior year tax is paid by the regular filing deadline

2

Which of the following is false regarding AGI? 1. All taxable income items are included in the computation of AGI. 2. No deductions are included in the computation of AGI. 3. Deductible expenditures from a sole proprietorship are reported above-the-line, not separately, but included in the net profit number.

2

Which of the following is not a feature of the kiddie tax? 1. The kiddie tax can require that certain types of income reported on a child's tax return be taxed at the parent's marginal tax rate. 2. The kiddie tax applies only to earned income. 3. The kiddie tax provisions are triggered by investment income in excess of a specific statutory threshold.

2

Which of the following statements about AGI is false? 1. When deductions are termed "above-the-line," the referenced "line" is AGI. 2. AGI equals total income less itemized deductions. 3. The ability to take certain deductions or credits is often limited based on exceeding an AGI threshold.

2

Which of the following statements about the dependent credit is false? 1. The requirement that the taxpayer has earned income aligns with the purpose of providing tax relief, so taxpayers may maintain gainful employment. 2. High income taxpayers are not eligible for the credit. 3. For costs to be eligible for the credit, care may be provided by either a day care facility or a caregiver who works in the home.

2

Which of the following statements is false regarding the administration of Social Security tax? 1. In 2022, each taxpayer is ultimately subject to Social Security taxes on wages up to $147,000. 2. The Social Security Administration is responsible for refunding excess Social Security withheld on a taxpayer. 3. If a taxpayer changes jobs, the cumulative amount withheld for that taxpayer by all employers in a given year may exceed the annual maximum.

2

Which of the following statements is false? 1. Total itemized deductions differs across taxpayers. 2. The taxpayer will always opt to take the standard deduction if their AGI is less than $72,600. 3. AGI is reduced by either the standard deduction or by total itemized deductions.

2

Filing status ___. (select all that apply) 1. is determined by formal request to the IRS 2. reflects marital status and family situation 3. does not change once it has been assigned 4. is defined in the tax law

2 and 4

Missy is claimed as a dependent on her parent's tax return. She earned $2,000 from her job at Yummy Yogurt Shop. Her standard deduction is $___.

2,400

Tom files as a single taxpayer. In 2022, he reports taxable income of $120,000. His tax liability is $___, assuming that he has no income subject to a preferential rate. (round your answer to nearest whole dollar)

22,636

Mark and Mary file a joint return. They are both 40 years old and have two young children. Their standard deduction is $___.

25900

Mr. and Mrs. Grekas had the following tax information for 2022: 2020 AGI $140,000 2021 Tax liability $26,200 2022 Estimated AGI $140,000 2022 Estimated tax liability $32,000 To avoid an underpayment penalty, Mr. and Mrs. Grekas must pay $___ towards their 2022 tax liability by April 15, 2023.

26,200

A taxpayer's marginal tax rate can be difficult to estimate because 1. the marginal tax rate formula has complex actuarial estimates. 2. the IRS makes frequent changes to tax rates during each taxable year. 3. certain deductions and credits are a function of AGI.

3

Alyssa is a single mother. Based on her AGI and number of children, her earned income credit is $4,215. Her taxable income is $25,000, and the resulting tax is $2,718. Which of the following statements best describes Alyssa's tax position? 1. Alyssa will owe no federal income tax this year and may use the $1,497 credit in a future year when she has a tax liability. 2. Alyssa will owe no federal income tax in the current year. 3. Alyssa will owe no federal income tax and will receive a $1,497 refund attributable to the earned income credit.

3

Bryan and Liz married in 2016. They have two dependent children, ages 3 and 5. Bryan died in 2022. Which of the following statements describes the tax rate schedules Liz will use when she files? 1. Liz will use head of household rates in 2022 and then single rates for the following tax years. 2. Liz will use head of household rates in 2022 and subsequent tax years. 3. Liz will use the married, filing jointly rates in 2022, 2023, and 2024. In 2025, she will use head of household rates. 4. Liz will use the married, filing jointly rates in 2022 and then head of household for the following tax years.

3

For a given year, filing status is determined ______. 1. with respect to the criteria evaluated on July 1 (midpoint) of the taxable year 2. as the status for which the taxpayer qualified for the most days in the taxable year 3. with respect to the criteria evaluated on the last day of the taxable year 4. with respect to the criteria evaluated on the first day of the taxable year

3

In 2022, Taylor was employed as an executive with Pier 2 Exporters from January to November, earning $150,000 and with Global Associates starting in December, earning $30,000. His excess social security credit is ___. 1. $2,306 2. $1,959 3. $1,860

3

Jamal is single. His AGI is $56,000 and he reports $7,200 of itemized deductions. What amount will Jamal subtract from AGI? 1. The total of the standard and itemized deductions - $20,150. 2. Itemized deductions of $7,200 3. The standard deduction of $12,950

3

Jennifer and Justin were married with two young children. Justin died during 2022. Which tax rates will Jennifer use for 2022 and 2023? 1. Married, filing jointly for 2022 and head of household for 2023 2. Single for both tax years 3. Married, filing jointly for both tax years 4. Married, filing jointly for 2022 and single for 2023

3

John is single and reports $50,000 of taxable income. Included in the taxable income number is $2,000 of capital gains subject to a 15% preferential tax rate. John's income tax liability is __. 1. $6,177 2. $6,917 3. $6,477

3

Mario and Maria Moreno have no children of their own. However, their niece, Lupe, lives with them, and they provide more than one-half of her financial support. Which describes a scenario in which the Moreno's may not consider Lupe a qualifying child? 1. Lupe is 16 and lives with the Morenos seven months of the year. 2. Lupe is 18 years old, lives with the Morenos full time, and earns $10,000. 3. Lupe is 22 years old, lives with the Morenos full time, and is not a full-time student.

3

Married individuals ___. 1. must file separately if both are employed. 2. must file jointly. 3. may elect to file either a joint or separate return.

3

Mr. and Mrs. Jinx are married and file jointly. They have two children, ages 10 and 12. They report AGI of $450,000. Mr. and Mrs. Jinx can claim a child credit of 1. $0 2. $500 3. $1,500 4. $2,000

3

Rian reports AMTI of $119,000 in excess of his permitted exemption amount. His regular tax liability is $22,960. His AMT is __​_. 1. $22,960 2. $0 3. $7,980 4. $30,940

3

Riley reports AMTI of $165,000 in excess of her permitted exemption amount. Her regular tax liability is $44,990. Her AMT is __​_. 1. $11,690 2. $2,090 3. $0 3. $42,900

3

AGI is ___. 1. a measure often used to determine whether the taxpayer is eligible for a deduction or credit the final step in the computation of taxable income an "above-the-line" income item included in the tax computation

1

An above-the-line deduction __​_ reduces AGI and __​_ reduces taxable income. An itemized deduction __​_ reduces AGI and __​_ reduces taxable income. 1. always; always; never; sometimes 2. always; always; always; always 3. never; always; never; always 4. always; always; sometimes; sometimes

1

Clint and Charlotte are married with one dependent child, and AGI of $120,000. They pay $12,000 per year for their 2-year old daughter to attend the daycare in the building in which they are employed. Their dependent care credit is _blank​_. 1. $600 2. $0 3. $3,000

1

Elizabeth and Shane were married for twenty years and have two grown children. They divorced on December 20 of the current year. Their filing status for this year is ___. 1. single 2. married, filing jointly or surviving spouse 3. married, filing separately 4. head of household

1

Itemized deductions only create a tax savings when itemized deductions __​_ the standard deduction. 1. exceed 2. are less then 3. are equal to

1

Jamal is single. His AGI is $56,000 and he reports $7,200 of itemized deductions. What amount will Jamal subtract from AGI? 1. The standard deduction of $12,950 2. Itemized deductions of $7,200 3. The total of the standard and itemized deductions - $20,150.

1

Kelsi and Kirk are both 35 years old and file a joint return. In 2022, their itemized deductions total $22,500. On their 2022 tax return, they will reduce AGI by ___. 1. the standard deduction of $25,900 2. the standard deduction of $25,900 and by $22,500 of itemized deductions 3. $22,500 of itemized deductions

1

Meaghan is a single taxpayer. Her AGI is $37,000, and she reports total itemized deductions of $14,300. If she is subject to a 12% marginal tax rate, the incremental tax benefit from itemizing is ___. 1. $162 2. $0 3. $1,716 4. $1,554

1

Milton is a retired, unmarried taxpayer with no dependents. In a typical year, his only itemized deductions are his property taxes of $6,500 and a $6,000 donation to his church. His tax accountant has advised him to consider making an $12,000 contribution to his church every other year instead of an annual $6,000 contribution. This technique is best described as _blank​_. 1. bunching 2. tax sheltering 3. tax evasion

1

Mr. Jones is single. He reports the following items: Net profit from sole proprietorship $75,000 Dividend income 12,000 Interest income 322 Deduction for self-employment tax 5,299 Itemized deductions 14,000 Mr Jones's AGI is $__​_. 1. $82,023 2. $87,322 3. $68,023

1

Mr. and Mrs. Henley could not complete their 2021 Form 1040 before April 15, 2022. They estimate that they will owe a balance of $2,500 with the return. Which of the following statements is true? 1. The Henleys can file an extension request by April 15 to extend the filing deadline six months, but they must pay the balance with the request. 2. The Henleys can file an extension request by April 15 to extend the tax payment and filing deadline by six months. 3. If the Henleys fail to file their tax return by April 15, they will be subject to a failure to file penalty in all circumstances.

1

The "kiddie tax" was originally implemented 1. to limit the ability to shift income from a parent's high tax bracket to a lower tax bracket. 2. to ensure that all taxpayers who earn income are subject to taxation. 3. to provide tax relief to children who earn income.

1

The dependent care credit ___. 1. is only available if the taxpayer has earned income 2. phases out completely for high income taxpayers 3. is available to offset the cost of care for any dependent of the taxpayer

1

The determination that an individual is a dependent has the potential to impact all of the following except ___. 1. the due date of the return 2. filing status of the taxpayer claiming the dependent 3. the availability of certain credits for the taxpayer 4. the tax rates applied to the taxpayer claiming the dependent

1

The earned income credit is __​_. 1. designed to financially encourage unemployed individuals to enter the workforce 2. computed independent of family size or marital status 3, a non-refundable credit

1

The earned income credit is __​_. 1. designed to financially encourage unemployed individuals to enter the workforce 2. computed independent of family size or marital status 3. a non-refundable credit

1

The kiddie tax ___. 1. refers to rules that require a child's unearned income to be taxed at the parent's tax rate. 2. generally applies only to children under the age of 14 3. is a special tax filing status for children under the age of 14 who earn income

1

Total income ___. 1. includes both income earned from business ventures and as an employee 2. excludes income earned from business ventures and from investments 3. excludes income earned as an employee

1

Which of the following reflects the typical due dates for quarterly estimated tax payments? 1. April 15; June 15; September 15; January 15 of the following year 2. April 15; July 15; October 15; January 15 of the following year 3. March 15; June 15; September 15; December 15

1

Which of the following statements about a qualifying relative as defined under the dependency rules is false? 1. A qualifying relative must be related to the taxpayer. 2. A qualifying relative must receive more than one-half their financial support from the taxpayer for whom they are a dependent. 3. A qualifying relative may not have gross income in excess of $4,400 (in 2022).

1

Which of the following statements about deductions is true? 1. An above-the-line deduction always reduces taxable income. 2. Itemized deductions can be above-the-line or below-the-line. 3. An itemized deduction always reduces taxable income.

1

Which of the following statements about payment of taxes is false? 1. Investment brokers are required to withhold tax on all investment income. 2. Employers are required to withhold tax on wages. 3. Quarterly estimated tax payments are usually required for sole proprietors with taxable income.

1

Which of the following statements about total income is false? 1. Total income excludes income from business ventures in which the taxpayer engages. 2. Computing total income is the first step in computing taxable income. 3. Total income includes compensation and salaries.

1

Which of the following statements concerning the individual alternative minimum tax (AMT) computation is true? 1. The calculation of alternative minimum taxable income begins with taxable income for regular tax purposes. 2. A taxpayer with no preference items for the year cannot be liable for AMT. 3. The AMT rate is a flat 20%.

1

Which of the following statements is false with respect to tax payments? 1. A tax refund indicates that the taxpayer has engaged in careful tax preparation and planning. 2. The filing deadline for an individual taxpayer is the 15th day of the fourth month after the close of the calendar year. 3. If withholding is less than the income tax liability, the balance is due April 15.

1

Which of the following statements regarding tax payments is true? 1. Sole proprietors must make quarterly estimated tax payments for both income and self-employment tax. 2. Sole proprietors are not required to make tax payments for income or self-employment tax until the return is filed. 3. Sole proprietors must make quarterly estimated tax payments of income tax, but self-employment tax is not due until the return is filed. 4. Sole proprietors must make quarterly estimated tax payments for self-employment tax, but income tax is not due until the return is filed.

1

Identify which of the following are refundable credits. (Select all that apply.) 1. Earned Income Credit 2. Excess Social Security 3. Dependent Care Credit

1 and 2

Mr. and Mrs. White file a joint return. They have two children. Both are full-time college students, and the Whites provide more than half of their financial support. Trenton is 22 years old, lives on campus, and he earned $7,000 from a part-time job. Lisa is 26 years old, lives at home, and earns $2,000 from a part-time job. Which of the following statements are true? (Select all that apply.) 1. Trenton is a qualifying child. 2. Trenton is a qualifying relative. 3. Lisa is a qualifying child. 4. Lisa is a qualifying relative. 5. Trenton is not a qualifying child or qualifying relative. 6. Lisa is not a qualifying child or qualifying relative.

1 and 4

Trent has a 24% marginal tax rate. He is offered the following option: A tax credit of $1,000 or an additional itemized deduction of $4,000. Assuming that his itemized deductions exceed the standard deduction, which of the following statements are true? (Select all that apply.) 1. As Trent's marginal tax rate increases, the value of the deduction increases. 2. As Trent's marginal tax rate increases, the value of the credit increases. 3. The value of the credit is $280. 4. The value of the $4,000 deduction is $960.

1 and 4

The Hamiltons had the following tax information in considering their 2022 estimated tax payments: 2020 AGI $180,000 2020 Tax liability $36,200 2021 Estimated AGI $200,000 2021 Estimated tax liability $36,000 Which of the following statements is false regarding their 2021 tax obligation? 1. The Hamiltons may request an extension to file, but must satisfy their tax obligation by April 15, 2023. 2. If the Hamiltons' 2022 estimates are accurate, they will avoid an underpayment penalty if they pay tax of $32,400 by April 15, 2023. 3. If the Hamiltons choose not to rely on their estimates, they may avoid an underpayment penalty if they pay $36,200 by April 15, 2023.

3

The marriage penalty ___. 1. is not present in the U.S. federal income tax system 2. is generally more prevalent among low income taxpayers relative to high income taxpayers 3. refers to the notion that the tax system is not neutral with respect to marital status

3

Which of the following is false regarding the computation of federal income tax? 1. Tax rates are a function of filing status. 2. The tax rate structure is progressive. 3. Tax is computed by applying the tax rate tables to AGI. 4. The tax rate tables include 7 tax brackets.

3

Which of the following statements are false? 1. The purpose of the standard deduction is to allow all taxpayers a certain amount of income "tax free." 2. The measure "taxable income" includes many adjustments that reflect how a taxpayer's personal situation may impact their ability to pay. 3. The amount of the standard deduction is directly related to a taxpayer's cash flows.

3

Which of the following statements is false regarding marginal tax rates for individual taxpayers? 1. High income taxpayers must evaluate the impact of phase-outs when assessing the value of an itemized deduction. 2. Especially for high income taxpayers, a sure way to precisely identify the marginal tax rate is to do the full income tax computation. 3. The marginal tax rate can always be determined by consulting the appropriate line on the tax rate schedule.

3

Which of the following statements is false? 1. A widower may file as married filing jointly in the year the spouse died. 2. Unmarried individuals with dependent children will not normally file using the single filing status. 3. Married individuals must file a joint return.

3

Which of the following statements is false? 1. The AMT exemption can be completely phased out. 2. The availability of an AMT exemption is a function of filing status and income level. 3. All taxpayers are entitled to an AMT exemption.

3

Which of the following statements is true? 1. With respect to individuals, only U.S. citizens are taxable entities for federal tax purposes. 2. All individuals are taxed at the same rate for federal tax purposes. 3. Differences exist in the computation of taxable income for individuals depending on their filing status.

3

A minor child with earned income 1. must use the "head of household" filing status. 2. may choose between reporting the income on their parent's return or filing independently using the "single" filing status. 3. may choose to report their income on their parents tax return. 4. must use the "single" filing status.

4

Hunt is single. His disabled father lives with him and is considered a dependent. Hunt's filing status is ___. 1. married, filing separately 2. married, filing jointly and surviving spouse 3. single 4. head of household

4

In 2022, a child's unearned income in excess of the inflation-adjusted base amount of $2,300 is 1. taxed at the single taxpayer's rate. 2. taxed at the rate applied to estate and gifts. 3. not taxed. 4. taxed at the parent's marginal rate.

4

Jillian is a single parent of two children, ages 14 and 16. She reports AGI of $65,000. Jillian can claim a child credit of ___. 1. $0 2. $1,000 3. $2,000 4. $4,000

4

Kristen and Austin married in 2014. They have no children. Kristen died on January 2, 2022. Which tax rates will Austin use for 2022 and 2023? 1. Married, filing jointly for 2022 and head of household for 2023 2. Married, filing jointly for both tax years 3. Single for both tax years 4. Married, filing jointly for 2022 and single for 2023

4

Which of the following is false regarding the computation of federal income tax? 1. The tax rate tables include 7 tax brackets. 2. The tax rate structure is progressive. 3. Tax rates are a function of filing status. 4. Tax is computed by applying the tax rate tables to AGI.

4

Indicate which of the following is not a filing status. 1. Single 2. Married, filing jointly or surviving spouse 3. Married, filing separately 4. Head of household 5. Permanent resident of the U.S.

5

Jim is single. His AMTI is $618,400. He is entitled to an AMT exemption of $___

56,275

Allie is single with no dependent children. Her 2022 tax information is as follows: Wages $60,000 Dividends 500 Itemized Deductions 4,000 Allie's AGI is $___ and her taxable income is $___.

60,500; 47,550

True or false: A single taxpayer with $75,000 of taxable income pays tax on that income at a flat rate of 22%.

false

True or false: If requested by the filing deadline, a taxpayer may request a six month extension to both file their return and pay their outstanding tax obligation.

false

True or false: The classification of an individual as a dependent only has the potential to affect a taxpayers filing status.

false

True or false: The original purpose of AMT was to ensure that tax preferences did not result in low income taxpayers not paying an equitable share of taxes.

false

Julia and Rob are both unmarried and file as single taxpayers. Julia's individual tax liability is $22,500 and Rob's is $32,000. If Julia and Rob were married, they would file jointly and their joint tax would be $60,000 which is $5,500 more than the amount computed by adding their individual tax liabilities together. This illustrates the ___ ___ present in the U.S. federal income tax structure.

marriage penalty

Congress enacted the earned income credit as a(n) ___ credit so that taxpayers receive any excess of the credit over the tax liability to offset the payroll tax burden.

refundable

In 2022, a child's unearned income in excess of the inflation-adjusted base amount of $2,300 is 1. taxed at the rate applied to estate and gifts. 2. taxed at the parent's marginal rate. 3. not taxed. 4. taxed at the single taxpayer's rate.

2

In general, which of the following does not normally triggers the need to make an estimated tax payment? 1. significant investment income 2. a significant increase in wages relative to the prior year 3. profit generated from a sole proprietorship

2

Mr. and Mrs. Short are married and file a joint return. They report the following items: Salary - Mrs. Short $100,000 Dividend Income 2,000 Share of partnership income 24,000 Above-the-line deductions 3,000 Itemized deductions 14,000 The Short's AGI is $___.

123,000

Eloise, a single taxpayer, had $110,000 of taxable income. If taxable income of $110,000 includes $10,000 in capital gains subject to a preferential rate of 15%, the tax liability is $___.

19,336

Marissa is a single mom with two dependent children. She is 30 years old. Her standard deduction is $___.

19,400

A taxpayer's marginal tax rate can be difficult to estimate because 1. the IRS makes frequent changes to tax rates during each taxable year. 2. certain deductions and credits are a function of AGI. 3. the marginal tax rate formula has complex actuarial estimates.

2

Alternative Minimum Taxable Income (AMTI) ___. 1. is computed independently of taxable income for regular tax purposes 2. is computed as regular tax purposes adjusted upward or downward for AMT adjustment and preferences 3. represents a second computation of taxable income to be used at the discretion of the taxpayer

2

An extension of time to file an individual tax return __​_. 1. may be denied by the IRS if the taxpayer fails to provide a reasonable explanation 2. does not extend the time for payment of tax 3. is always four months 4. is only granted if the taxpayer who requests an extension to file provides the IRS with a reasonable reason

2

Clint and Charlotte are married with one dependent child, and AGI of $120,000. They pay $12,000 per year for their 2-year old daughter to attend the daycare in the building in which they are employed. Their dependent care credit is __​_. 1. $0 2. $600 3. $3,000

2

Eileen and Elliot are married and file a joint return. Their AGI is $105,000, and they report total itemized deductions of $23,250. If they are subject to a 22% marginal tax rate, the incremental tax benefit from itemizing is __​_. 1. $165 2. $0 3. $5,115 4. $5,280

2

Estimated tax payments are due 1. according to the schedule proposed by the taxpayer. 2. in four quarterly installments. 3. in two semi-annual installments. 4. when a taxpayer files their return.

2

In 2022, Marshall was employed by Buckeye, Inc. until September when he accepted a new position with Spartan Company. Marshall earned $100,000 from Buckeye and $70,000 from Spartan. Which of the following reflects the amount of wages on which Spartan must withhold Social Security and Medicare tax? 1. Social Security on $47,000; Medicare tax on $41,600 2. Social Security on $70,000; Medicare tax on $70,000 3. Social Security on $47,000; Medicare tax on $70,000 4. No Social Security; Medicare tax on $70,000

2