In general, the tax rate schedules and tax tables are set up to tax higher levels of income at higher tax rates than lower levels of income.
Capital gains are always taxed at a lower rate than ordinary income.
The alternative minimum tax system requires higher-income taxpayers to be taxed at an alternative, higher tax rate on the regular income tax base to determine the amount of the alternative minimum tax.
Taxpayers are allowed to deduct personal and dependency exemptions for alternative minimum tax purposes.
Employees must pay the Social Security tax on all of their wages and Medicare tax on wages up to a fixed amount.
The American opportunity credit applies to qualifying education expenses for the first four years of post secondary education.
A taxpayer must have both earned income in excess of the standard deduction and at least one qualifying dependent to qualify for the earned income credit.
In certain circumstances, in the current year, a taxpayer may need to pay in more than 100% of her prior year tax liability to avoid estimated tax penalties.
Which of the following is not a taxpayer filing status for purposes of determining the appropriate tax rate schedule?
|A)||Head of Household|
|B)||Qualifying Widow or Widower|
|C)||Married Filing Separately|
Henry is single. In 2010, he reported $30,000 of taxable income, including a long-term capital gain of $10,000. At what rate will his long-term capital gain be taxed (use the tax rate schedules)?
In 2010, Wilma (who files as a head of household) reported regular taxable income of $150,000. She itemized her deductions, deducting $10,000 in charitable contributions and $2,000 in state income taxes. She claimed exemptions for herself and her two sons, Romulus and Remus, ($3,650 each). What is Wilma's alternative minimum taxable income?
Christine has a regular tax liability of $22,500 and a tentative minimum tax of $20,000. Given just this information, what is her alternative minimum tax liability for the year?
Ian earned $150,000 of salary as an employee in 2010. How much should his employer have withheld from his paycheck for FICA taxes (rounded to the nearest whole dollar amount)?
Which of the following suggests that a working taxpayer is an employee rather than an independent contractor?
|A)||Works for only one firm|
|B)||Working hours set for taxpayer|
|C)||Works on employer premises|
|D)||All of the above suggest employee status|
Boyd and Susan are married filing jointly in 2010. They have three children for whom they may claim the child tax credit. Their AGI was $115,000. What amount of child tax credit may they claim on their 2010 tax return?