The child tax credit is not available for children ages 17 and older.
True
The child credit is $1,000 per qualifying child unless it is phased out due to higher levels of parental income.
True
The use of the earned income credit could result in a taxpayer receiving a refund even though he or she has not paid any income taxes.
True
To be eligible for the earned income credit for 2014, a taxpayer must have a "qualifying child.
False
Feedback: As long as adjusted gross income (AGI) is below a certain level, and the taxpayer is over 25 and under 65 years old and not claimed as a dependent on another return, a taxpayer may be eligible for the earned income credit even if the taxpa
Amounts paid to a relative generally do not qualify as child care expenses.
False
Feedback: Payments to relatives are eligible for the child and dependent care credit, unless the payments are to a dependent of the taxpayer or to the taxpayer's child who is under the age of 19 at the end of the tax year.
For 2014, the maximum amount of expenses that qualify for the child and dependent care credit is the same for three dependents as it is for two dependents.
True
A taxpayer with earned income of $50,000 is not eligible to claim the credit for child and dependent care expenses.
False
Feedback: Taxpayers at all levels of income are eligible to claim a credit of at least 20 percent of qualified expenses for child and dependent care expenses.
Married taxpayers must file a joint tax return to claim the child and dependent care credit.
True
In determining the amount of the child and dependent care credit, there is a limit of $2,000 on the amount of qualified expenses for one dependent.
False
Feedback: In determining the amount of the child and dependent care credit, there is a limit of $3,000 on the amount of qualified expenses for one dependent and $6,000 for two or more dependents.
All taxpayers are required to have minimum essential health coverage.?
False
Feedback: Certain taxpayers can file an exemption.
Taxpayers are required to wait until they file their tax return to receive the premium tax credit. ?
False
The foreign tax credit applies only to foreign corporations.
False
Feedback: The foreign tax credit applies to U.S. taxpayers who earned income from a foreign country and who were subject to income taxes in that foreign country.
The total expenses that can be taken as a credit for all tax years for adoption of a child without "special needs" is $6,000.
False
Feedback: For 2014, the total expenses that can be taken as a credit for all tax years with respect to an adoption of a child without "special needs" are $13,190.
An individual may claim both a credit and an exclusion from income in connection with the adoption of an eligible child, but may not claim both a credit and an exclusion for the same expense.
True
For all taxpayers, except those married filing separately, the individual alternative minimum tax rate for 2014 is 26 percent on the first $182,500 of income and 28 percent on income above $182,500.
True
Salary earned by minors may be taxed at their parents' tax rate.
False
Feedback: Only unearned income of minors may be taxed at their parents' tax rate.
Net unearned income of certain minor children is taxed at their parents' tax rates.
True
Unearned income of a 16-year-old child may be taxed at his or her parents' income tax rate.
True
Denice is divorced and files a single tax return claiming her two children, ages 7 and 9, as dependents. Her AGI for 2014 is $81,500. Denice's Child Credit for 2014 is:
$1,650
Feedback: (2 � $1,000) - [($81,500 - $75,000) / $1,000 rounded up to the nearest whole number � $50]
Curly and Rita are married, file a joint return, and have two dependent children, ages 11 and 13. Their AGI is $117,000. By how much is their child credit reduced in 2014?
$350
Feedback: ($117,000 - $110,000) / $1,000 rounded up to the nearest whole number � $50
The earned income credit:
Must be calculated on earned income as well as adjusted gross income in some cases.
In 2014, Alex has income from wages of $16,000, adjusted gross income of $18,000, and tax liability of $300 before the earned income credit. What is the amount of Alex's earned income credit for 2014, assuming his 5-year-old dependent son lived with him f
$3,274
Which one of the following taxpayers qualify for the earned income credit?
A 31-year-old construction worker with $22,000 of AGI and two children.
For the 2014 tax year, Sally, who is divorced, reported the following items of income:
Interest income
$ 600
Wages
$4,000
Earnings from self-employment
$3,000
She maintains a household for herself and her 1-year-old son who qualifies as her dependent. Wha
$2,389
Which of the following tax credits is not available for the 2014 tax year?
All of the above are available credits
Clark, a widower, maintains a household for himself and his two dependent preschool children. For the year ended December 31, 2014, Clark earned a salary of $32,000. He paid $3,500 to a housekeeper to care for his children in his home, and also paid $1,50
$1,300
Feedback: 26% � ($3,500 + $1,500)
The child and dependent care provisions:
Are available for spouses incapable of self-care.
Robert and Mary file a joint tax return for 2014, with adjusted gross income of $30,000. Robert and Mary earned income of $20,000 and $12,000 respectively, during 2014. In order for Mary to be gainfully employed, they pay the following child care expenses
$729
Feedback: 27% � ($1,700 + $1,000) = $729
The American Opportunity credit
Is available for qualifying expenses paid on behalf of the taxpayer and his or her spouse, in addition to those paid for dependents.
In the case of the adoption of a child who is not a U.S. citizen or resident of the U.S., the credit for qualified adoption expenses is available:
In the year the adoption becomes final.
Taxpayers are allowed two tax breaks for adoption expenses. They are allowed:
Qualified Expenses
Paid personally Paid by employer
Credit , Exclusion
Choose the correct statement:
A taxpayer may receive a 30-percent credit for installing a windmill, which generates electricity, at his vacation home.
Assume Karen is 12 years old and her only income is $2,500 of interest income from a bank account with money her parents have given her to save for college. What are the options Karen has for filing her tax return?
Karen can file a separate tax return or her parents can elect to include her in their tax return, paying tax on $500 of her interest income at their rate of tax.