Reference no: EM132955159

Questions -

Q1. What is the amount of dependent care credit for a couple with two children where they spend $5,000 for dependent care and the husband earns $40,000 for the year and the wife earns $4,500 before the income tax limitation?

a. $1,000

b. $990

c. $900

d. $0

e. None of these

Q2. The difference between a refundable credit and a nonrefundable credit is:

a. A refundable credit can only reduce a taxpayer's tax liability to zero

b. A nonrefundable credit can only reduce a taxpayer's tax liability to zero

c. Refundable tax credits are only available to individual taxpayers

d. Nonrefundable tax credits are only available to corporations

Q3. When tentative minimum tax exceeds the taxpayer's regular tax liability, the excess represents the taxpayer's:

a. Net income tax

b. Alternative minimum tax (AMT)

c. Total income tax liability

d. None of the above

Q4. What is the "alternative minimum tax" for 2020 that must be paid by a taxpayer filing a joint return, if the taxpayer has taxable income of $95,500, adjustments to taxable income of $29,000, tax preferences of $50,000, and an income tax before the alternative minimum tax of $6,000?

a. $23,400

b. $9,886

c. $17,400

d. $15,886

e. None of the above

Q5. A corporation pays $45,000 in foreign income taxes to Country X. The corporation's worldwide taxable income is $600,000 and its taxable income from Country X was $150,000. The tax on the $600,000 of worldwide income is $200,000. What is the corporation's foreign tax credit?

a. $45,000

b. $100,000

c. $50,000

d. $80,000

e. None of the above

Q6. Tuition paid to a private school for a first-grader qualifies for the dependent care credit.

a. True

b. False