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Exam 13: Tax Credits and Payment Procedures

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Question 41

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Bradley has two college-age children, Clint, a freshman at State University, and Abigail, a junior at Northwest University.Both Clint and Abigail are full-time students.Clint's expenses during the 2019 fall semester are as follows: $2,400 tuition, $250 books and course materials, and $1,600 room and board.Abigail's expenses for the 2019 calendar year are as follows: $10,200 tuition, $1,200 books and course materials, and $3,600 room and board.Tuition and the applicable room and board costs are paid at the beginning of each semester. Bradley is married, files a joint tax return, claims both children as dependents, and reports a combined AGI with his wife Allie of $114,000 for 2019.Determine Bradley's available education tax credit for 2019.

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In 2019, both Clint and Abigail qualify ...

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Question 42

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In the event that overwithholding of FICA tax occurs because the taxpayer has more than one employer, the excess amount should be claimed as a credit on the Federal income tax return of the employee.

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Question 43

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The ceiling amounts and percentages for 2019 for the two portions of the self-employment tax are: $\begin{array} { l c } { \text { SocialSecurityPortion } } & \text { MedicarePortion } \\\end{array}$ a. $\begin{array}{llcc}\quad\$ 132,900 ; 12.4 \% & \quad\text { Unlimited; } 2.9 \%\end{array}$ b. $\begin{array}{llcc}\quad\$ 132,900 ; 15.3 \% &\quad \text { Unlimited; } 2.9 \%\end{array}$ c. $\begin{array}{llcc}\quad\$ 128,400 ; 12.4 \% &\quad \text { Unlimited; } 2.9 \% \end{array}$ d. $\begin{array}{llcc}\quad \$ 128,400 ; 2.9 \% &\quad \text { Unlimited; } 13.3 \%\end{array}$

The disabled access credit was enacted to encourage small businesses to make their businesses more accessible to disabled individuals.

An employer calculates the amount of income tax withheld from salary or wages based on the information an employee provides on the:

Pat generated self-employment income in 2019 of $76,000.The self-employment tax is:

In May 2019, Blue Corporation hired Camilla, Jolene, and Tyrone, all of whom are certified as long-term family assistance recipients.Each employee is paid $12,000 during 2019. a.Compute Blue's work opportunity tax credits for 2019. b.Assume that Blue pays total wages of $500,000 to its employees during 2019.How much may Blue claim as a wage deduction for 2019 if the work opportunity tax credit is claimed?

In describing FICA taxes, which (if any) of the following statements is incorrect?

Which of the following, if any, correctly describes the earned income credit?

Which of the following correctly reflects current rules regarding estimated tax payments for individuals?

The earned income credit is available only if the taxpayer has at least one qualifying child in the household.

The base amount for the Social Security portion (old age, survivors, and disability insurance) is different from that for the Medicare portion of FICA.

Which of the following issues does not need resolution in an employer's effort to comply with employment tax payment requirements?

Consider the FICA tax and the self-employment tax.How are these two taxes similar and how do they differ?

For purposes of computing the credit for child and dependent care expenses, the qualifying employment-related expenses are limited to an individual's actual or deemed earned income.

Which of the following statements concerning the credit for child and dependent care expenses is not correct?

An employee with another source of income may be able to avoid the penalty for underpayment of estimated tax by having his employer increase income tax withholdings.

Molly has generated general business credits over the years that have not been utilized.The amounts generated and not utilized equal: $\begin{array} { l r } 2015 & \$ 2,500 \\2016 & 7,500 \\2017 & 5,000 \\2018 & 4,000\end{array}$ In the current year, 2019, her business generates an additional $15,000 general business credit.In 2019, based on her tax liability before credits, she can utilize a general business credit of up to $20,000.After utilizing the carryforwards and the current year credits, how much of the general business credit generated in 2019 is available for future years?

In March 2019, Gray Corporation hired two individuals, both of whom were certified as long-term recipients of family assistance benefits.Each employee was paid $11,000 during 2019.Gray's work opportunity tax credit amounts for 2019 is:

A taxpayer's earned income credit may be determined by the number of his or her qualifying children.