Reference no: EM132467780

Question 1: Jaimee earned $150,000 as an employee. She also had her own business where she earned $100,000. On how much of the income from her own business must she pay social security tax?

Select one:

a. zero

b. 6.2% of $100,000

c. 12.4% of $92,350

d. 12.4% of $100,000

e. 6.2% of 92,350

Question 2: An employee who has two different employers during the year may be entitled to a tax credit (a refund) for overpaid Social Security taxes. (T/F).

Question 3: Amanda, a single taxpayer and resident of Massachusetts, earned $30,000 ordinary income from her job. She also cashed in a Massachusetts state bond, earning $100 interest income. The interest income from the bonds is taxed at:

Select one:

a. It is not taxed

b. 10%

c. 15%

d. 20%

Question 4: Which of the following is NOT an itemized deduction?

Select one:

a. Alimony paid

b. Medical expenses

c. Personal property taxes paid on a personal use automobile based upon the auto's value

d. Charitable contributions

Question 5: Harrison is a lawyer and earned $1,000,000 last year. In addition he received a qualified dividend. Without knowing any additional facts, which of the following statements is true regarding the rate at which the dividend will be taxed to Harrison?

Select one:

a. The dividend will be taxed at a 20% tax rate plus the 3.8% Net Investment Income rate.

b. The dividend will be taxed at a 15% tax rate plus the 3.8% Net Investment Income rate.

c. The entire dividend will be taxed at either 15% or the entire dividend will be taxed at 20% depending on Harrison's marginal ordinary income tax rate plus the 3.8% Net Investment Income rate.

d. None of the choices are correct.

Question 6: Hestia (age 17) is claimed as a dependent by her parents, Rhea and Chronus. In 2018, Hestia received $1,000 of interest income from a corporate bond that she owns. In addition, she has earned income of $200. Which of the following statements is true?

Select one:

a. Because Hestia is 17 she is not subject to the kiddie tax

b. All of Hestia's income is taxed at the trust and estate rate brackets

c. Because Hestia's interest income is under $2,100 none of it is taxable at the trust and estate rate brackets.

d. The $1,000 of interest income is taxable at the trust and estate rate brackets but the earned income is taxed at 10% rate.

Question 7: Millicent is single. Last year she had $200,000 of income working as a Model. In addition, she had $100,000 earnings from interest, dividends and stock sales. How much of this income, if anything, is subject to the net investment tax?

Select one:

a. $0

b. 75,000

c. $100,000

d. $275,000