In connection with the application of the kiddie tax,
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Internal Service Revenue [IRS] of USA tries to prevent tax evasion by certain taxpayers by transfering their investments to their children. So Kiddie tax is charged on unearned income of chiledren through interest and dividentds.
With above information we will solve this MCQ as under --
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Solved in 2 steps
- 3. Use the same assumptions as we did above (a couple is married, filing jointly, with no dependents, using the standard deductions and exemptions). Use the tax schedules provided to determine the AGI and fill in the tables for the following scenarios. a. Suppose a couple paid $3,000 in taxes in 1963. Use this information and the 1963 tax schedule to fill in the remaining boxes of the table. Description Amount Adjusted Gross Income Standard Deductions (married, filing jointly, no dependents) $1,200 Taxable Income Total Tax (calculate from schedule) $3,000 Effective tax rate b. Suppose a couple paid $3,000 in taxes in 1988. Use this information and the 1988 tax schedule to fill in the remaining boxes of the table. Description Amount Adjusted Gross Income Standard Deductions (married, filing jointly, no dependents) $8,900 Taxable Income Total Tax (calculate from schedule) $3,000 Effective tax rate C. Suppose a couple paid $3,000 in taxes in 2013.Which of the following correctly completes the sentence regarding the tax treatment of a housing allowance received by an ordained minister? The housing allowance is ______ income for federal income tax purposes and ___________ income for self-employment tax purposes. Included in; included in. Included in; excluded from. Excluded from; included in. Excluded from; excluded from.Mathhh
- For purposes of computing the credit for child and dependent care expenses, the qualifying child or dependent care expenses are limited to the actual or deemed earned income of the lower earning spouse. True FalseWhich one of the following statements describes the consequences of using the filing status 'married filing jointly'? A spouse may not be held responsible for tax if that spouse had no income. The tax rates are generally more favorable than that of two single individuals if one has high income and the other has low income. If it is elected on an original return, it may be changed on an amended return.3. Which one of the following are valid deductible educational expenses? A. Professional development courses required by an employer for retaining a position. B. A tax seminar attended for reasons unrelated to one’s present job. C. A college or vocational course necessary to be considered for a job. D. A professional continuing education program that qualified the taxpayer for a new job.
- Which of the following statement is true? A. Lifetime learning tax credit is available for each qualified student including taxpayers and dependents. B. Tax credits reduces a taxpayer’s taxable income dollar for dollar. C. The child tax credit is subject to phase-out based on the taxpayer’s AGI. D. To qualify for the earned income credit, the taxpayer must have a qualified dependent. E. The American opportunity credit is available only for those students who are in their first or second year of post-secondary education.Caleb is a resident of the fictional state of Vernetticut. Vernetticut begins its income tax calculation with federal adjusted gross income. Caleb may need to make an addition on his Vernetticut return if he: 1)Received income that is taxable at the federal level but not at the Vernetticut level. 2) Claimed a deduction allowed at the federal level but not allowed on the Vernetticut return. 3)Received income exempt from both federal and Vernetticut income tax. 4)Incurred an expense that is deductible at both the federal and state levels.Mark for follow up Question 30 of 50. Which of the following taxpayers may qualify for the Premium Tax Credit? Each purchased health care coverage through the Healthcare Marketplace, and each received Form 1095-A, Health Insurance Marketplace Statement. None received unemployment income. Alanis. She files single and her tax liability is zero. Caleb. He and his spouse file married filing separately, but live in the same house. Jordan. He files head of household and was eligible for employer-sponsored coverage, but he chose not to enroll in the plan because it would have cost him 5% of his household income. Sydney. She files single and will be claimed as a dependent on her grandmother's return. Mark for follow up
- Self-employed individuals (including a partner in a partnership) and employees with other income sources are required to submit a return of income and estimated income on gazette forms as required by the Income Tax Act. Select one: True FalseDetermine the number of dependents in each of the following independent situations: (for example, 1, 2, 3, and so on). Determine whether the individuals will qualify as the taxpayer's dependent in each of the following independent scenarios. Specify whether the dependent would come under the qualifying child category, the qualifying relative category, or "not applicable" (if the individual does not qualify as a dependent). a. Andy maintains a household that includes a cousin (age 12), a niece (age 18), and a son (age 26). All are full-time students. Andy furnishes all of their support, and all are “members of the household.” Cousin Niece Son b. Mandeep provides all of the support of a family friend's son (age 20), who lives with her. She also furnishes most of the support of her stepmother, who does not live with her. Family friend's son Stepmother c. Raul, a U.S. citizen,…Give an example of child tax credit under two tax filing statuses married file jointly and married file separately?
