Both GGH and Murdock must pay the

29 Jun Both GGH and Murdock must pay the

Question
89. Mr. and Mrs. Arlette spent $5,900 for child care for their 12-year-old daughter. Mr. Arlette’s earned

income was $178,000, Mrs. Arlette’s earned income was $33,100, and the AGI on their joint return was

$225,200. Calculate their dependent care credit.

A. $5,900

B. $1,180

C. $600

D. $0

90. Mr. and Mrs. Borem spent $1,435 for child care for their two dependent children, who are two and four

years old. Mr. Borem’s earned income was $55,870, Mrs. Borem had no earned income, and the AGI on

their joint return was $66,210. Calculate their dependent care credit.

A. $0

B. $287

C. $502

D. $1,435

91. Mr. and Mrs. Harvey’s tax liability before credits was $1,675. Their income tax withholding was $1,050,

and they are entitled to a $1,189 earned income credit. Which of the following statements is true?

A. The Harveys are entitled to a $1,050 tax refund.

B. The Harveys are entitled to a $1,189 tax refund.

C. The Harveys are entitled to a $564 tax refund.

D. The Harveys owe no additional tax but they are not entitled to a refund.

92. Mr. Marshall was employed by IMP Inc. until October, when he accepted a new position with Turine Inc.

Mr. Marshall earned $129,000 compensation from IMP and $36,000 compensation from Turine. Which

of the following statements is false?

A. Turine must withhold Social Security tax from Mr. Marshall’s $36,000 compensation.

B. Turine must withhold Medicare tax from Mr. Marshall’s $36,000 compensation.

C.

Mr. Marshall is entitled to an income tax credit for excess Social Security tax withheld by his

employers this year.

D. None of the above is false.

93. Mrs. Lincoln was employed by GGH Inc. until October, when he accepted a new position with Murdock

Inc. Mrs. Lincoln earned $145,000 compensation from GGH and $36,000 compensation from Murdock.

Which of the following statements is false?

A. Murdock must withhold Social Security tax from Mrs. Lincoln’s $36,000 compensation.

B. Murdock must withhold Medicare tax from Mrs. Lincoln’s $36,000 compensation.

C.

Mrs. Lincoln is entitled to an income tax credit for both excess Social Security tax and excess Medicare

tax withheld by her employers this year.

D.

Both GGH and Murdock must pay the full amount of employer payroll tax on the compensation paid

to Mrs. Lincoln.

94. Which of the following statements concerning the individual alternative minimum tax (AMT) is true?

A.

The calculation of alternative minimum taxable income begins with taxable income for regular tax

purposes.

B. A taxpayer with no tax preference items for the year can’t be liable for AMT.

C. An individual is allowed the same exemption as a corporation in calculating the AMT base.

D. The individual AMT rate is a flat 28%.

95. Ruth Anne, a single taxpayer, reported $152,600 alternative minimum taxable income before any

exemption on her Form 1040. Calculate Ruth Anne’s alternative minimum tax exemption.

A. $10,025

B. $38,425

C. $48,450

D. None of the above

96. Mr. and Mrs. Stern reported $312,400 alternative minimum taxable income before any exemption on their

Form 1040. Calculate their alternative minimum tax exemption.

A. $0

B. $40,600