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Exam 12: Tax Credits and Payments

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Question 21

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A taxpayer who meets the age requirement and receives no Social Security benefits will be entitled to the full tax credit for the elderly.

A) True
B) False

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Question 22

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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.

A) True
B) False

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Question 23

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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?

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

Which,if any,of the following correctly describes the research activities credit?

Amber is in the process this year of renovating the office building (placed in service in 1976) used by her business.Because of current Federal Regulations that require the structure to be accessible to handicapped individuals,she incurs an additional $11,000 for various features,such as ramps and widened doorways,to make her office building more accessible.The $11,000 incurred will produce a disabled access credit of what amount?

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.

The education tax credits (i.e.,the American Opportunity credit and the lifetime learning credit) are available to help defray the cost of higher education regardless of the income level of the taxpayer.

In May 2017,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 2017. a.Compute Blue Corporation's work opportunity tax credits for 2016 and 2017. b.Assume Blue Corporation pays total wages of $500,000 to its employees during 2017. How much may Blue Corporation claim as a wage deduction for 2017 if the work opportunity tax credit is claimed?

In computing the foreign tax credit,the greater of the foreign income taxes paid or the overall limitation is allowed.

Molly has generated general business credits over the years that have not been utilized.The amounts generated and not utilized follow: ​ In the current year,2017,her business generates an additional $15,000 general business credit.In 2017,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 2017 is available for future years?

Cardinal Corporation hires two persons certified to be eligible employees for the work opportunity tax credit under the general rules (e.g.,food stamp recipients) ,each of whom is paid $9,000 during the year.As a result of this event,Cardinal Corporation may claim a work opportunity credit of:

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

The additional Medicare taxes assessed on high-income individuals carry differing tax rates depending on the tax base.

Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.

Jack and Jill are married,have three children,and have earnings during 2017 of $28,500.Do they qualify for the earned income credit? If so,calculate the amount of credit that is available to them.

Because current U.S.corporate income tax rates are higher than many foreign corporate income tax rates only infrequently will the credit's,the overall limitation yield a lower foreign tax credit than the amount of foreign taxes actually paid.

Rex and Dena are married and have two children,Michelle (age 7) and Nancy (age 5) .During 2017,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:

Only self-employed individuals are required to make estimated tax payments.

The components of the general business credit include all of the following except: