{"id":7358,"date":"2021-10-12T19:54:26","date_gmt":"2021-10-12T19:54:26","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/tax-practice-questions-accounting-homework-help\/"},"modified":"2021-10-12T19:54:26","modified_gmt":"2021-10-12T19:54:26","slug":"tax-practice-questions-accounting-homework-help","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/tax-practice-questions-accounting-homework-help\/","title":{"rendered":"Tax practice questions | Accounting homework help"},"content":{"rendered":"
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\u00a0\u00a0<\/p>\n

Question 4<\/strong><\/p>\n

In which of the following scenarios does the taxpayer fail to meet the residency test for EIC purposes?<\/strong><\/p>\n

Select one:<\/p>\n

a. A taxpayer who is 64 years old and lived in the United States for more than half of the year\u00a0<\/p>\n

This answer is incorrect. \u00a0A taxpayer who is 64 years old and lived in the United States for more than half of the year meets the residency test for EIC purposes.<\/em><\/p>\n

b. A taxpayer whose child lived with him all year. \u00a0He and his spouse separated on May 29.<\/p>\n

c. A taxpayer whose child lived with him for 5 months and 28 days<\/p>\n

d. A taxpayer whose eligible foster child lived with him all year<\/p>\n

Question 8<\/strong><\/p>\n

Lucy had the following income in tax year 2019: \u00a0Wages $25,900, interest income of $1,300 and strike benefits paid by the union of $1,700. \u00a0For purposes of EIC, how much is considered earned income?<\/strong><\/p>\n

Select one:<\/p>\n

a. $25,900<\/p>\n

b. $30,200\u00a0<\/p>\n

This answer is incorrect. \u00a0All items of income listed are not earned income for EIC.<\/em><\/p>\n

c. $27,200<\/p>\n

d. $27,600<\/p>\n

Question 9<\/strong><\/p>\n

Which of the following correctly identifies a condition of eligibility for purposes of earned income credit?<\/strong><\/p>\n

Select one:<\/p>\n

a. The taxpayer is not required to have a qualifying child.<\/p>\n

b. The taxpayer must have only earned income.\u00a0<\/p>\n

This answer is incorrect. \u00a0To be eligible to receive EIC, the taxpayer must have earned income; however, may have had sourse of earned income as well.<\/em><\/p>\n

c. The taxpayer must have wages.<\/p>\n

d. The taxpayer\u2019s qualifying children must be under 25 years old.<\/p>\n

Question 10<\/strong><\/p>\n

Which of the following meets the age test for purposes of EIC?<\/strong><\/p>\n

Select one:<\/p>\n

a. Stuart\u2019s son is 23 years old and lived with him all year. \u00a0His son was a full-time student and attends an online school.<\/p>\n

b. Micheal\u2019s son turned 19 years old on March 31st of the tax year and is living with his parents. \u00a0Michael\u2019s son does not have a job and does not plan to attend college.\u00a0<\/p>\n

This answer is incorrect. \u00a0Michael\u2019s son was not under the age of 19 at the end of the year.<\/em><\/p>\n

c. Jacob is 22 years old. \u00a0His 23 year brother has lived with him since Jacob started living on his own two years ago. \u00a0Jabob\u2019s brother is a full-time student and works odd jobs to help with his support.\u00a0<\/p>\n

d. Natasha\u2019s 30 year old daughter is permantly and totally disabled. \u00a0Natasha\u2019s daughter lived with her all year.<\/p>\n

Question 11<\/strong><\/p>\n

Which of the following situations meets the residency test requirements for purposes of EIC?<\/strong><\/p>\n

Select one:<\/p>\n

a. Melissa is 18 years old and a full-time student. \u00a0Melissa lived with her grandmother until May. \u00a0She then moved in with her aunt and lived there until August, when she left and moved in with her father for the remainder of the year.<\/p>\n

b. Orlando is 17 years old and lived with his mother until June 28th, when he went to live with his father until December 1st. \u00a0Orlando then moved in with a friend.\u00a0<\/p>\n

This answer is incorrect. \u00a0Orlando lived with his mother and father for for less than 6 months of the year.<\/em><\/p>\n

c. Alex is 16 years old and lived with his parent\u2019s until May. \u00a0In May he was sent to a juvenile detention facility where he stayed through the remainder of the year.<\/p>\n

d. Sterling is 18 years old, a full-time student and lived with her grandmother until June 10th, when she rented an apartment and moved out on her own.<\/p>\n

Question 12<\/strong><\/p>\n

Wilson and Zoey live together and are not married. \u00a0Jason, their 4-year old son lives with them. \u00a0Also living with them the entire year is Wilson\u2019s sister Evie (age 12), Zoey\u2019s daughter, Belle (age 8) and Zoey\u2019s mother (age 64). \u00a0Wilson\u2019s AGI is \u00a0$30,300 and Zoey\u2019s AGI is $29,950. \u00a0Who would be a qualifying child for Wilson<\/strong><\/p>\n

Select one:<\/p>\n

a. Jason and Evie<\/p>\n

b. Jason and Belle\u00a0<\/p>\n

This answer is incorrect. \u00a0While one child meets the relationship test, the other does not.<\/em><\/p>\n

c. Jason, Evie, and Belle<\/p>\n

d. Jason<\/p>\n

Question 13<\/strong><\/p>\n

Fiona and her daughter (age 2) lived with Fiona\u2019s grandmother during the year. \u00a0Fiona is 23 years old and is a full-time student. \u00a0Fiona worked part-time and earned $9,450. \u00a0Fiona\u2019s grandmother received Social Security benefits of $22,600 and interest income of $800. \u00a0Fiona plans to file a tax return; however, her grandmother is not required to file a return. \u00a0Which of the following statements is most accurate?<\/strong><\/p>\n

Select one:<\/p>\n

a. Fiona meets the relationship, age, residency, and joint return tests for EIC. \u00a0Fiona is a qualifying child of her grandmother.<\/p>\n

b. Since Fiona\u2019s grandmother is not required to file a return, Fiona can file a return and claim EIC for herself; however cannot claim EIC for her daughter because her daughter is a qualifying child of her grandmother.<\/p>\n

c. Fiona and her daughter meet all the tests for EIC. \u00a0Fiona and her daughter are qualifying children of her grandmother.\u00a0<\/p>\n

This answer is incorrect. \u00a0While it is true that Fiona and her daughter are qualifying children of her grandmother, other facts cause this answer to be incorrect.\u00a0<\/em><\/p>\n

d. Since Fiona\u2019s grandmother is not required to file a return, Fiona can file a return claiming her daughter as a qualifying child. \u00a0Since all EIC test requirements have been met, Fiona is eligible to receive the EIC for her daughter.<\/p>\n

Question 14<\/strong><\/p>\n

Tyler is a qualifying widower and has 10-year old twin boys. \u00a0Tyler had the following income for the year:<\/strong><\/p>\n

\u00b7 Wages<\/strong> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0$28,750<\/strong><\/p>\n

\u00b7 Interest income<\/strong> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0$390<\/strong><\/p>\n

\u00b7 Raffle winnings<\/strong> \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a01,500<\/strong><\/p>\n

Assuming all EIC requirements are met, what amount of EIC is Tyler eligible to receive?<\/strong><\/p>\n

Select one:<\/p>\n

a. $3,702<\/p>\n

b. $3,386<\/p>\n

c. $3,776<\/p>\n

d. $3,460\u00a0<\/p>\n

This answer is incorrect<\/em><\/p>\n

Question 16<\/strong><\/p>\n

Fred prepared his tax return last year. \u00a0This year, Fred decided to have his tax return prepared by a professional. \u00a0During the interview process, Fred\u2019s tax preparer realized Fred needs to repay the education credit he took for his son last year. \u00a0For which of the following reasons would a taxpayer be required to repay an education credit?<\/strong><\/p>\n

Select one:<\/p>\n

a. The taxpayer received tax-free educational assistance for an expense used to calculate a higher education credit on their return.<\/p>\n

b. The taxpayer received a refund of transportation expenses.\u00a0<\/p>\n

This answer is incorrect. \u00a0Transportation expenses aren\u2019t deductible when calculating the education credit; therefore, there is no requirement to report a refund.<\/em><\/p>\n

c. The taxpayer received a refund of personal living expenses.<\/p>\n

d. The taxpayer received a gift from a relative to help pay lodging expenses.<\/p>\n

Question 17<\/strong><\/p>\n

Amy and Hobbes are married and file a joint return. \u00a0Their three children are 7, 9, and 18 years old. \u00a0Their modified AGI is $58,000, and their tax liability on Form 1040, line 12a is $3,647. \u00a0They have no other tax credits for the tax year. \u00a0What is the amount of their child tax credit\/credit for other dependents on Form 1040, line 13a?<\/strong><\/p>\n

Select one:<\/p>\n

a. $4,000\u00a0<\/p>\n

This answer is incorrect. \u00a0$4,000 is the maximum amount of CTC with two qualifying children under age 17 and no tax liability limitation.<\/em><\/p>\n

b. $3,647<\/p>\n

c. $6,000<\/p>\n

d. $4,500<\/p>\n

Question 18<\/strong><\/p>\n

Tony purchased a house in 2019 and received a mortgage credit certificate (MCC) issued by the local government. \u00a0The original amount of the mortgage is $150,000, the certified indebtedness amount on the MCC is $100,000, and the mortgage interest paid during the year is $6,500. \u00a0Determine the interest paid on the certified indebtedness amount.<\/strong><\/p>\n

Select one:<\/p>\n

a. $9,750<\/p>\n

b. $6,500<\/p>\n

c. $2,167\u00a0<\/p>\n

This answer is incorrect. \u00a0$2,167 is not the amount of interest allocated to the certified indebtedness amount.<\/em><\/p>\n

d. $4,333<\/p>\n

Question 19<\/strong><\/p>\n

Bob had two jobs in 2019, earning a total of $139,850 in taxable wages. \u00a0He paid Social Security taxes of $7,492.70 from his primary job and $1,178.00 from his second job. \u00a0What is the amount, if any, of Bob\u2019s excess SST?<\/strong><\/p>\n

Select one:<\/p>\n

a. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a00.00\u00a0<\/p>\n

This answer is incorrect. \u00a0Bob is entitled to the credit because he had Social Security tax withheld from wages for more than one job, and the total exceeded the limit for the year.<\/em><\/p>\n

b. $1,178.00<\/p>\n

c. $ \u00a0\u00a0709.90<\/p>\n

d. $ \u00a0\u00a0430.90<\/p>\n

Question 20<\/strong><\/p>\n

Ellen and her husband separated in June, are still legally married and will be filing separate returns. \u00a0She wants to be able to claim the child and dependent care credit for her 6-year-old son, who lives with her. \u00a0All of the following are conditions that Ellen must meet to be considered unmarried and eligible to claim the child and dependent care credit <\/strong>except<\/strong><\/em>:<\/strong><\/p>\n

Select one:<\/p>\n

a. Ellen did not live with her husband during the last six months of the year.\u00a0<\/p>\n

This answer is incorrect. \u00a0The taxpayer must meet this condition to be eligible to take the child and dependent care credit.<\/em><\/p>\n

b. Ellen paid more than half the cost of keeping up her home for the year.<\/p>\n

c. Ellen\u2019s husband must sign a release to allow her to claim the dependent care credit.<\/p>\n

d. Ellen\u2019s home was the home of the qualifying individual for more than half the year.<\/p>\n

Question 21<\/strong><\/p>\n

Judy\u2019s expenses for her third year at a university include the following: $3,000 for tuition, $500 for books, $2,500 for her dormitory room, and $2,200 for food. \u00a0What amount of the expenses will qualify for the American Opportunity Credit?<\/strong><\/p>\n

Select one:<\/p>\n

a. $8,200<\/p>\n

b. $6,000\u00a0<\/p>\n

This answer is incorrect. \u00a0Some of the expenses are not qualified education expenses for the American Opportunity Credit.<\/em><\/p>\n

c. $3,500<\/p>\n

d. $3,000<\/p>\n

Question 23<\/strong><\/p>\n

Tom and Darla are married and have three children, ages 5, 11, and 18 years old. \u00a0Their modified AGI is $68,000, and their tax liability on Form 1040, line 12a is $4,847. \u00a0They claim $1,200 of education credits on Schedule 3 (Form 1040), lines 3. \u00a0What is the amount of their child tax credit\/credit for other dependents?<\/strong><\/p>\n

Select one:<\/p>\n

a. $2,800\u00a0<\/p>\n

This answer is incorrect. \u00a0$2,800 amount is the CTC with two qualifying children minus the other nonrefundable tax credits ($4,000 \u2013 $1,200 = $2,800).<\/em><\/p>\n

b. $3,647<\/p>\n

c. $3,300<\/p>\n

d. $4,500<\/p>\n

Question 24<\/strong><\/p>\n

Sophia is a single mom with a 17-year-old daughter whom she claims as a dependent on her tax return. \u00a0Sophia\u2019s AGI is $35,000, and her tax liability is $1,724. \u00a0She has no other nonrefundable credits. \u00a0What is the amount of her child tax credit\/credit for other dependents?<\/strong><\/p>\n

Select one:<\/p>\n

a. $1,771<\/p>\n

b. $ \u00a0\u00a0500<\/p>\n

c. $2,000<\/p>\n

d. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a00\u00a0<\/p>\n

This answer is incorrect. \u00a0Sophia is eligible for the CTC\/ODC.<\/em><\/p>\n

Question 25<\/strong><\/p>\n

Mia and Noah have four children, ages one month, 13, 15, and 19. \u00a0Their AGI is $96,500, and their tax liability is $8,267. \u00a0During the tax year, their 19-year-old son decided to postpone going to college and got a job instead. \u00a0He earned wages of $7,400 and provided most of his support. \u00a0They have no other nonrefundable tax credits. \u00a0What is the amount of their child tax credit\/credit for other dependents?<\/strong><\/p>\n

Select one:<\/p>\n

a. $6,000<\/p>\n

b. $6,500<\/p>\n

c. $4,000\u00a0<\/p>\n

This answer is incorrect. \u00a0This amount is the CTC with only two qualifying children.<\/em><\/p>\n

d. $8,000<\/p>\n

Question 26<\/strong><\/p>\n

John has two sons. \u00a0David is 3-year-old, and Tommy turned 13 on May 1st in 2019. \u00a0John paid a local daycare provider $12,000 for David from January through December and $3,000 for Tommy from January through June. \u00a0John\u2019s earned income is 60,000. \u00a0What is the maximum amount of qualified expenses John can use to figure the child and dependent care credit?<\/strong><\/p>\n

Select one:<\/p>\n

a. $ \u00a05,000<\/p>\n

b. $ \u00a06,000<\/p>\n

c. $ \u00a03,000\u00a0<\/p>\n

This answer is incorrect. \u00a0$3,000 is the maximum amount on which the child and depende<\/em><\/p>\n

nt care credit can be figured for one qualifying child.<\/em><\/p>\n

d. $15,000<\/p>\n

Question 27<\/strong><\/p>\n

Aria and Logan Johnson have two children, Sara, age 2, and Mia, age 4. \u00a0Logan is an engineer and Aria is a homemaker. \u00a0The Johnsons paid $8,800 for Sara and Mia to attend daycare during the year. \u00a0Logan received dependent care benefits from his employer of $2,000. \u00a0Their AGI is $65,000, and their tax liability is $4,487. \u00a0How much of the childcare expenses can be used to claim the child and dependent care credit?<\/strong><\/p>\n

Select one:<\/p>\n

a. $4,000\u00a0<\/p>\n

This answer is incorrect. \u00a0Under normal circumstances, the amount of childcare expenses that would be used to claim the dependent care credit would be $4,000. \u00a0However, Aria and Logan must meet other qualifications to claim the dependent care credit.<\/em><\/p>\n

b. $6,000<\/p>\n

c. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a00<\/p>\n

d. $6,800<\/p>\n

Question 29<\/strong><\/p>\n

Alicia\u2019s 18-year-old son is a freshman at a local college. \u00a0She paid the required tuition and fees for her son and received a Form 1098-T. \u00a0She is wondering whether she is eligible to claim an education credit on her 2019 tax return. \u00a0Which of the following statements is correct?<\/strong><\/p>\n

Select one:<\/p>\n

a. The phase-out amount based on the taxpayer\u2019s AGI for the Lifetime Learning Credit is greater than for the American Opportunity Credit.<\/p>\n

b. If the student has been convicted of a felony for possessing or distributing a controlled substance as of the end of 2019, he is not eligible for the American Opportunity Credit.<\/p>\n

c. Both the American Opportunity Credit and the Lifetime Learning Credit are nonrefundable tax credits.<\/p>\n

d. The Lifetime Learning Credit offers a higher maximum credit amount than the American Opportunity Credit.\u00a0<\/p>\n

This answer is incorrect. \u00a0The American Opportunity Credit offers a higher maximum credit amount than the Lifetime Learning Credit.<\/em><\/p>\n

Question 30<\/strong><\/p>\n

Shelly, single, is a full-time elementary school teacher. \u00a0She is interested in learning the basics of information technology to improve her current job skills and enrolled in a couple of IT courses at the local college. \u00a0Shelly paid $3,500 for tuition and fees and $300 for textbooks from a local bookstore (not required by the institution). \u00a0She received a Form 1098-T. \u00a0Her AGI is $56,000 and her tax liability on Form 1040, line 12a is $5,500. \u00a0Shelly has never been convicted of a felony for possessing or distributing a controlled substance. \u00a0Which education credit is Shelly eligible to claim and for what amount?<\/strong><\/p>\n

Select one:<\/p>\n

a. Lifetime Learning Credit; $760<\/p>\n

b. American Opportunity Credit; $2,375\u00a0<\/p>\n

This answer is incorrect. \u00a0Shelly is not pursuing a degree or other recognized credential, which is a requirement for American Opportunity credit.<\/em><\/p>\n

c. Lifetime Learning Credit; $700<\/p>\n

d. American Opportunity Credit; $2,450<\/p>\n

Question 31<\/strong><\/p>\n

Joshua is a 25-year-old graduate school student who paid $15,000 in tuition and fees to an eligible educational institution in 2019. \u00a0He received a Form 1098-T. \u00a0Joshua works part-time at a local firm and had wages of $22,500. \u00a0He has no other income or nonrefundable tax credits. \u00a0His tax liability on Form 1040, line 12a is $1,045. \u00a0What is the amount of his education credit for 2019?<\/strong><\/p>\n

Select one:<\/p>\n

a. $3,000<\/p>\n

b. $1,045<\/p>\n

c. $2,000<\/p>\n

d. $2,500\u00a0<\/p>\n

This answer is incorrect. \u00a0Joshua is not eligible for the American Opportunity Tax Credit.<\/em><\/p>\n

Question 32<\/strong><\/p>\n

The Browns are both managers and file jointly with a modified AGI of $166,000. \u00a0Their dependent son, Gary, is a full-time college student. \u00a0During tax year 2019, they paid $10,500 in qualifying education expenses for Gary\u2019s second year of college. \u00a0On their tax return, how will the Browns claim the tax benefit for Gary\u2019s education expenses?<\/strong><\/p>\n

Select one:<\/p>\n

a. They are not eligible to claim a tax benefit for the education expenses.\u00a0<\/p>\n

This answer is incorrect. \u00a0The Browns may be eligible to claim a tax benefit.<\/em><\/p>\n

b. They can claim an adjustment to income.<\/p>\n

c. They can claim the Lifetime Learning Credit.<\/p>\n

d. They can claim the American Opportunity Credit.<\/p>\n

Question 34<\/strong><\/p>\n

Geoffrey was age 23 on 12\/31\/19. \u00a0He was a full-time student and completed his 4th year of college in May of 2019. \u00a0His Spring semester was paid for in December of the prior year and credit on those expenses has been claimed on the prior year\u2019s return. \u00a0After graduation, he was unable to find employment, so he moved back in with his parents and entered graduate school in the fall of 2019. \u00a0Geoffrey\u2019s parents are claiming him as a dependent on their tax return, and they had an AGI of $57,000. \u00a0Geoffrey received a 1098-T from the college with Box 9 checked (graduate student).<\/strong><\/p>\n

Which of the following statements is correct?<\/strong><\/p>\n

Select one:<\/p>\n

a. Geoffrey\u2019s parents will claim him as a dependent and are eligible to take a Lifetime Learning Credit.<\/p>\n

b. Geoffrey\u2019s parents will claim him as a dependent and are eligible to take an American Opportunity Credit.\u00a0<\/p>\n

This answer is incorrect. \u00a0Geoffrey\u2019s parents cannot take an American Opportunity Credit since \u201cgraduate student\u201d was checked in Box 9 of the 1098-T.<\/em><\/p>\n

c. Geoffrey\u2019s parents will claim him as a dependent and may take an American Opportunity Credit for the expenses for Geoffrey\u2019s 4th year in college and take a Lifetime Learning Credit for Geoffrey\u2019s graduate school expenses in 2019.<\/p>\n

d. Geoffrey\u2019s parents will claim him as a dependent but are ineligible to claim either an American Opportunity Credit or Lifetime Learning Credit for 2019.<\/p>\n

Question 36<\/strong><\/p>\n

The Grays\u2019 son, Joel, graduated and received his bachelor\u2019s degree in June 2019. \u00a0In 2019, Joel turned age 24 and provided more than half of his support. \u00a0The Grays file jointly with modified AGI of $116,000. \u00a0Joel has modified AGI of $26,000. \u00a0Who can claim a tax credit for education expenses paid by Joel during 2019?<\/strong><\/p>\n

Select one:<\/p>\n

a. Either the Grays or Joel (but not both) can claim an education tax credit.\u00a0<\/p>\n

This answer is incorrect. \u00a0Only one of them will be eligible for an education credit.<\/em><\/p>\n

b. Only Joel can claim the Lifetime Learning Credit or the American Opportunity Credit (if he qualifies), whichever is more beneficial.<\/p>\n

c. Neither the Grays nor Joel can claim an education tax credit.<\/p>\n

d. Only the Grays can claim the Lifetime Learning Credit or the American Opportunity Credit (if Joel qualifies), whichever is more beneficial.<\/p>\n

Question 37<\/strong><\/p>\n

Linda paid her tuition and later received a Pell grant (tax-free educational assistance) covering part of the tuition. \u00a0All of the following are true except:<\/strong><\/p>\n

Select one:<\/p>\n

a. If the Pell grant was received after Linda claimed the education credit on her return, she may have to repay all or part of the credit.<\/p>\n

b. The Pell grant should reduce the amount of qualified expenses for the education credit.<\/p>\n

c. Linda does not need to adjust her education credit by the Pell grant since it was received after she filed her return.<\/p>\n

d. If Linda claimed an education credit and received a reimbursement for that same year; Linda must refigure the credit for a previous year and report the difference as an additional tax on line 12a (Form 1040).\u00a0<\/p>\n

This answer is incorrect. Linda must refigure the credit and report the difference as an additional tax on line 12a (Form 1040).<\/em><\/p>\n

Question 38<\/strong><\/p>\n

Incorrect<\/p>\n

0.00 points out of 1.00<\/p>\n

Flag question<\/p>\n

Question text<\/p>\n

Madison, 18, is in her first year of college. \u00a0She lives with her parents and attends a local college. \u00a0Madison\u2019s parents continue to claim her as a dependent since she is a full-time student and under age 24.<\/strong><\/p>\n

Madison paid the following amount for qualified tuition in 2019:<\/strong><\/p>\n

\u00b7 $2,100 in March for the summer semester (2019)<\/strong><\/p>\n

Her parents paid the following amounts for qualified tuition in 2019:<\/strong><\/p>\n

\u00b7 $3,500 in June for the fall semester (2019)<\/strong><\/p>\n

\u00b7 $3,300 in December for the spring semester (2020)<\/strong><\/p>\n

What amount of qualified tuition will Madison be allowed to use in calculating her 2019 American Opportunity Credit on her tax return?<\/strong><\/p>\n

Select one:<\/p>\n

a. $2,100\u00a0<\/p>\n

This answer is incorrect. \u00a0$2,100 is not the amount of qualified tuition Madison would be allowed to use if she otherwise qualified.<\/em><\/p>\n

b. $5,600<\/p>\n

c. $8,900<\/p>\n

d. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a00<\/p>\n

Question 39<\/strong><\/p>\n

Incorrect<\/p>\n

0.00 points out of 1.00<\/p>\n

Flag question<\/p>\n

Question text<\/p>\n

If used to pay tuition at an eligible educational institution, which of the following would reduce the amount of qualified education expenses a taxpayer could use to claim education credit on his tax return?<\/strong><\/p>\n

Select one:<\/p>\n

a. A gift from a friend\u00a0<\/p>\n

This answer is incorrect. \u00a0Education expenses paid for from a gift received by the taxpayer are treated as paid by the taxpayer.<\/em><\/p>\n

b. A Pell grant<\/p>\n

c. A family inheritance<\/p>\n

d. A student loan<\/p>\n

Question 40<\/strong><\/p>\n

Judi and May adopted a child in 2019. \u00a0Their adoption expenses include $3,500 of court fees, $6,880 of traveling fees, and $3,250 of attorney fees. \u00a0The child is not a special needs child. \u00a0They also received a $2,250 reimbursement from their employer for adopting the child. \u00a0Their modified AGI is $200,500. \u00a0What is the amount of their adoption credit in 2019?<\/strong><\/p>\n

Select one:<\/p>\n

a. $11,380<\/p>\n

b. $14,080\u00a0<\/p>\n

This answer is incorrect. \u00a0$14,080 is the maximum amount of the adoption credit a taxpayer can claim in 2019.<\/em><\/p>\n

c. $11,830<\/p>\n

d. $13,630<\/p>\n

Question 41<\/strong><\/p>\n

Junie Jones, a tax preparer, explains to Scott that the foreign income taxes he paid may be claimed in which of following ways on his 2019 tax return?<\/strong><\/p>\n

Select one:<\/p>\n

a. Both on Schedule 3 (Form 1040), line 1 and on Schedule A as \u201cOther taxes\u201d if he itemizes deductions<\/p>\n

b. Only reported on Schedule 3 (Form 1040), line 1\u00a0<\/p>\n

This answer is incorrect. \u00a0The foreign tax credit can be reported on line 1 of Schedule 3 (Form 1040). \u00a0However, it is not the best answer.<\/em><\/p>\n

c. Either on Schedule 3 (Form 1040), line 1 or on Schedule A as \u201cOther taxes\u201d if he itemizes deductions<\/p>\n

d. Only reported on Schedule A as \u201cOther taxes\u201d if he can itemize deductions<\/p>\n

Question 43<\/strong><\/p>\n

Tom\u2019s Tier II Railroad Retirement benefits are reported on Form RRB-1099-R. \u00a0Tom\u2019s tax preparer must know all the following to calculate the taxable amount of Tier II Railroad Retirement benefits using the Simplified Method, <\/strong>except<\/strong><\/em>:<\/strong><\/p>\n

Select one:<\/p>\n

a. The current age of the taxpayer<\/p>\n

b. How much has been recovered tax-free since 1986<\/p>\n

c. The age at which the taxpayer started drawing retirement\u00a0<\/p>\n

This answer is incorrect. \u00a0The age at which the taxpayer started drawing retirement is one of the facts the tax preparer must know when using the Simplified Method Worksheet.<\/em><\/p>\n

d. The number of payments received in the year<\/p>\n

Question 45<\/strong><\/p>\n

Hank has contributed more than the maximum allowable amount to his IRA. \u00a0What is the penalty for excess contributions to an IRA?<\/strong><\/p>\n

Select one:<\/p>\n

a. 6% on the excess amount in the year the excess is deposited<\/p>\n

b. 6% per year on the excess amount for as long as the excess remains in the account<\/p>\n

c. 6% per year on the account balance for as long as the excess remains in the account<\/p>\n

d. 6% on the account balance in the year the excess is deposited\u00a0<\/p>\n

This answer is incorrect. \u00a0The account balance is not subject to the 6% penalty.<\/em><\/p>\n

Question 46<\/strong><\/p>\n

Jack, 60, retired in March on disability. \u00a0Before retirement, his employer paid 100% of his disability insurance premiums and included the amount in his wages. \u00a0Jack received a total of $5,800 disability benefits this year. \u00a0How much of Jack\u2019s disability payments are taxable?<\/strong><\/p>\n

Select one:<\/p>\n

a. $2,900\u00a0<\/p>\n

This answer is incorrect. $2,900 is 50% of the disability payments. \u00a0The insurance premiums paid by Jack’s employer were included in his wages.<\/em><\/p>\n

b. $5,800<\/p>\n

c. $1,450<\/p>\n

d. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a00<\/p>\n

Question 47<\/strong><\/p>\n

Chuck is 65-years old and started receiving his pension in May 2019. \u00a0Chuck contributed to his pension plan (after-tax dollars) over the years of his employment. \u00a0Chuck wants to use the Simplified Method to determine his tax-free portion of the pension. \u00a0Which of the following pension or annuity plans would not allow him to use the Simplified Method?<\/strong><\/p>\n

Select one:<\/p>\n

a. Private annuity<\/p>\n

b. Qualified employee plan\u00a0<\/p>\n

This answer is incorrect. \u00a0If Chuck receives his pension from a qualified employee plan, then he can use the Simplified Method to figure the tax-free portion of the payments.<\/em><\/p>\n

c. 403(b)<\/p>\n

d. Qualified employee annuity<\/p>\n

Question 49<\/strong><\/p>\n

Doris was 70 \u00bd on May 20, 2018. \u00a0\u00a0The bank which held her IRA account had indicated that she would be required to take a Required Minimum Distribution (RMD) of $3,000. \u00a0She took her RMD on June 30, 2019, which was the year after the year that she turned 70 \u00bd. \u00a0Assume that her federal tax rate is 22%. \u00a0What amount of federal taxes must she pay on her $3,000 withdrawal?\u00a0<\/strong><\/p>\n

Select one:<\/p>\n

a. $1,500<\/p>\n

b. $ \u00a0\u00a0960<\/p>\n

c. $ \u00a0\u00a0660\u00a0<\/p>\n

This answer is incorrect. \u00a0$660 would be her regular tax on the $3,000 distribution ($3,000 x .22 = $660).<\/em><\/p>\n

d. $2,160<\/p>\n

Question 50<\/strong><\/p>\n

Steve, age 55, retired last year on disability due to back problems. \u00a0Before retirement, his employer paid 75% of his disability insurance premiums. \u00a0Last year, Steve received $1,350 per month from disability (for 12 months). \u00a0How much of Steve\u2019s disability payments are reported as taxable income?<\/strong><\/p>\n

Select one:<\/p>\n

a. $12,150<\/p>\n

b. $ \u00a04,050\u00a0<\/p>\n

This answer is incorrect. \u00a0$4,050 is the amount of disability received, which would not be taxable income.<\/em><\/p>\n

c. $16,200<\/p>\n

d. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a00<\/p>\n

Question 53<\/strong><\/p>\n

Kevin operates a floral retail store as a sole proprietorship. \u00a0During tax year 2019, he had a net profit of $150,000. \u00a0What is the correct amount of his self-employment tax?<\/strong><\/p>\n

Select one:<\/p>\n

a. $19,645\u00a0<\/p>\n

This answer is incorrect. \u00a0This amount used was last year\u2019s Social Securty limit of $ 128,400. $128,400 \u00d7 12.4% + $128,400 \u00d7 2.9% = $19,645. \u00a0The excess earnings are not taxed.<\/em><\/p>\n

b. $22,950<\/p>\n

c. $20,497<\/p>\n

d. $21,194<\/p>\n

Question 54<\/strong><\/p>\n

Justin, a teacher, spent a total of $500 on classroom supplies for his third-grade students. \u00a0He asks his tax preparer if he\u2019s able to deduct any of these expenses. \u00a0How much is he able to deduct, if any, and where does he report this amount on his tax return?<\/strong><\/p>\n

Select one:<\/p>\n

a. The money Justin has spent out-of-pocket is not deductible.<\/p>\n

b. Justin can report $250 as an adjustment to income on Schedule 1 (Form 1040), line 10 and the remaining $250 is not deductible.<\/p>\n

c. Justin can report all his expenses as an adjustment to income on Schedule 1 (Form 1040), line 10.\u00a0<\/p>\n

This answer is incorrect. \u00a0Schedule 1 (Form 1040), line 10 is the correct place to report educator expenses; however, a limit applies.<\/em><\/p>\n

d. Justin can deduct $250 as an adjustment to income on Schedule 1 (Form 1040), line 10. The remainder can be reported on Schedule A, line 21 as an unreimbursed employee expense.<\/p>\n

Question 56<\/strong><\/p>\n

Steve (age 55) and May (age 48) are married and will file a joint return. \u00a0Steve is an elementary school teacher, and May is unemployed. \u00a0During the year, Steve contributed $7,000 to his traditional IRA and May contributed $6,000 to her traditional IRA. \u00a0Steve had wages of $10,500 for the year. \u00a0Steve also received $8,500 in unemployment compensation during the year. \u00a0They received $1,580 in interest income and $3,560 in dividend income. \u00a0What would the couple\u2019s IRA deduction be for the tax year?<\/strong><\/p>\n

Select one:<\/p>\n

a. $ \u00a07,000<\/p>\n

b. $10,500<\/p>\n

c. $12,000\u00a0<\/p>\n

This answer is incorrect. \u00a0$12,000 would be the maximum contribution for Steve and May if both were under age 55. \u00a0Other limits would apply.<\/em><\/p>\n

d. $13,000<\/p>\n

Question 58<\/strong><\/p>\n

Jodie, age 52, filed her tax return using the Married Filing Separately status and lived with her husband during the year. \u00a0Her modified AGI is $68,000. \u00a0She is considering making a contribution to her Roth IRA. \u00a0What amount is Jodie allowed to contribute to her Roth IRA for the tax year?<\/strong><\/p>\n

Select one:<\/p>\n

a. $7,000\u00a0<\/p>\n

This answer is incorrect. \u00a0There is a modified AGI limit regarding the taxpayer\u2019s filing status for contributing funds to a Roth IRA.<\/em><\/p>\n

b. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a00<\/p>\n

c. $3,000<\/p>\n

d. $6,000<\/p>\n

Question 60<\/strong><\/p>\n

The Jenkins, a married couple who file Married Filing Jointly, want to set up Traditional IRA accounts. \u00a0If neither are covered by a retirement plan at work, what is the limit of their modified AGI in order for the Jenkins to be able to contribute to a Traditional IRA?<\/strong><\/p>\n

Select one:<\/p>\n

a. Less than $64,000\u00a0<\/p>\n

This answer is incorrect. \u00a0Less than $64,000 is the amount at which the phase-out begins for Single, Head of Household covered by a retirement plan.<\/em><\/p>\n

b. Less than $203,000<\/p>\n

c. Less than $123,000<\/p>\n

d. Limits do not apply<\/p>\n

Question 61<\/strong><\/p>\n

Randy, age 42, wants to open an IRA for retirement. \u00a0Randy meets the eligibility requirements necessary to make an IRA contribution. \u00a0Which of the following statements regarding Randy\u2019s IRA contributions is correct?<\/strong><\/p>\n

Select one:<\/p>\n

a. Randy can only make a Roth IRA contribution.\u00a0<\/p>\n

This answer is incorrect. \u00a0Randy may make a contribution to either a traditional or a Roth IRA.<\/em><\/p>\n

b. If Randy chooses to make a contribution to a traditional IRA, his contribution will be nondeductible due to his age.<\/p>\n

c. Randy can only make a traditional IRA contribution.<\/p>\n

d. Randy can contribute to a traditional or Roth IRA; however, his contribution could be limited.<\/p>\n

Question 63<\/strong><\/p>\n

Jake is a self-employed carpenter. \u00a0Last year his net self-employment income was $25,200. \u00a0How much would Jake\u2019s self-employment tax be on line 4 of Schedule 2 (Form 1040)?<\/strong><\/p>\n

Select one:<\/p>\n

a. $3,856\u00a0<\/p>\n

This answer is incorrect. \u00a0$3,856 is figured as: $25,200 x 15.3% = $3,856.<\/em><\/p>\n

b. $1,928<\/p>\n

c. $1,781<\/p>\n

d. $3,561<\/p>\n

Question 64<\/strong><\/p>\n

Sylvia graduated from college last year and started repaying her student loans. \u00a0She received a statement from the bank showing she paid $2,750 in interest on her student loans for the year. \u00a0Her total income before adjustments is $38,500, and she meets all requirements to be able to deduct the interest. \u00a0How much, if any, will Sylvia be allowed to deduct as an adjustment to her income?<\/strong><\/p>\n

Select one:<\/p>\n

a. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a00\u00a0<\/p>\n

This answer is incorrect. \u00a0Sylvia will be allowed to deduct a certain amount of the student loan interest.<\/em><\/p>\n

b. $2,750<\/p>\n

c. $1,375<\/p>\n

d. $2,500<\/p>\n

Question 65<\/strong><\/p>\n

Joseph cashed in a CD (certificate of deposit) early because he needed money quickly to buy a new car. \u00a0Unfortunately, the bank charged him an early withdrawal penalty of 5% which amounted to $250. \u00a0Can Joseph deduct the penalty on his taxes and, if so, how much can be deducted?<\/strong><\/p>\n

Select one:<\/p>\n

a. No, Joseph will not be allowed to deduct any of the early withdrawal penalty.<\/p>\n

b. Yes, Joseph can deduct $250 on line 17 of Schedule 1 (Form 1040) as an adjustment to income.<\/p>\n

c. Yes, but only half of the early withdrawal penalty may be deducted.\u00a0<\/p>\n

This answer is incorrect. \u00a0The penalty on an early withdrawal of savings can be deducted as an adjustment to income, but the limitation is not 50%.<\/em><\/p>\n

d. Yes, but Joseph can only deduct the early withdrawal penalty if he uses Schedule A and itemizes his deductions.<\/p>\n

Question 66<\/strong><\/p>\n

Avery and Jenna divorced in December 2017. \u00a0Avery was ordered by the court to pay Jenna $750 each month for child support and $250 each month in alimony. \u00a0He made the payments for the entire year. \u00a0How much of the payments will Avery be able to claim as a deduction when he files his 2019 tax return?<\/strong><\/p>\n

Select one:<\/p>\n

a. $12,000\u00a0<\/p>\n

This answer is incorrect. \u00a0$12,000 is the full amount of both the child support and alimony which Avery paid. \u00a0This total includes amounts that are not considered alimony.<\/em><\/p>\n

b. $ \u00a03,000<\/p>\n

c. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a00<\/p>\n

d. $ \u00a09,000<\/p>\n

Question 67<\/strong><\/p>\n

Darren and Amy are married and filing separate returns for 2019. \u00a0During 2019, Darren paid $3,500 in interest on his student loan. \u00a0His modified AGI is $61,580. \u00a0How much of the student loan interest can Darren deduct as an adjustment to income on his 2019 tax return?<\/strong><\/p>\n

Select one:<\/p>\n

a. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a00<\/p>\n

b. $3,500<\/p>\n

c. $1,750\u00a0<\/p>\n

This answer is incorrect. \u00a0$1,750 is 50% of the student loan interest he paid during the year. \u00a0This is not the correct restriction or limitation that will apply.<\/em><\/p>\n

d. $2,500<\/p>\n

Question 68<\/strong><\/p>\n

In 2019, Charlotte had to relocate to another city as required by her employer. \u00a0The new home is 800 miles away from her previous home. \u00a0She paid $5,000 for moving costs and drove her car 800 miles to her new home. \u00a0She paid $150 for one-night lodging on the trip and $50 for meals during the trip. \u00a0She also received a $2,000 reimbursement from her employer. \u00a0How much is Charlotte\u2019s moving expense adjustment?<\/strong><\/p>\n

Select one:<\/p>\n

a. $5,294\u00a0<\/p>\n

This answer is incorrect. \u00a0$5,294 amount includes all her expenses. \u00a0There are limitations and restrictions that apply.<\/em><\/p>\n

b. $3,294<\/p>\n

c. $3,344<\/p>\n

d. $ \u00a0\u00a0\u00a0\u00a0\u00a0\u00a00<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

\u00a0\u00a0 Question 4 In which of the following scenarios does the taxpayer fail to meet the residency test for EIC purposes? Select one: a. A taxpayer who is 64 years old and lived in the United States for more than half of the year\u00a0 This answer is incorrect. \u00a0A taxpayer who is 64 years old […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-7358","post","type-post","status-publish","format-standard","hentry","category-homework-help"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/7358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=7358"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/7358\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=7358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=7358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=7358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}