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Exam 13: Tax Credits and Payment Procedures

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Question 1

True/False

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Unless a taxpayer is disabled, the tax credit for the elderly or disabled is available only if the taxpayer is at least 59 1/2 years old.

A) True
B) False

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Question 2

Multiple Choice

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Rex and Dena are married and have two children, Michelle age 7) and Nancy age 5) . During 2018, Rex earned a salary of $24,500, received interest income of $300, and filed a joint income tax return with Dena. Dena had $0 gross income. Their earned income credit for the year is:

A) $0.
B) $5,426.
C) $5,621.
D) $5,716.

E) A) and B)
F) A) and C)

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Question 3

Multiple Choice

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

Green Company, in the renovation of its building, incurs $9,000 of expenditures that qualify for the disabled access credit. The disabled access credit is:

The incremental research activities credit is 20% of the qualified research expenses that exceed the base amount.

A taxpayer who qualifies for the low-income housing credit claims the credit over a 20-year period.

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

If the cost of a building constructed and placed into service by an eligible small business in the current year includes the cost of a wheelchair ramp, the cost of the ramp qualifies for the disabled access credit.

Kevin and Sue have two children, ages 8 and 14. They spend $6,200 per year on eligible employment related expenses for the care of their children after school. Kevin earned a salary of $20,000 and Sue earned a salary of $18,000. What is the amount of the credit for child and dependent care expenses?

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

An employer's tax deduction for wages is affected by the work opportunity tax credit.

The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.

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

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

George and Jill are husband and wife, ages 67 and 65 respectively. During the year, they receive Social Security benefits of $4,000 and have adjusted gross income of $11,000. Assuming they file a joint return, their tax credit for the elderly, before considering any possible limitation due to their tax liability, is:

Which of the following best describes the treatment applicable to unused business credits?

The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

Certain high-income individuals are subject to three additional Medicare taxes-on wages, unearned income, and tax credits claimed.

How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?

The child tax credit is based on the number of the taxpayer's qualifying children under age 17.