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Adjusted Gross Income Informed Consent Form Public High School Tuition And Fees
Vita Certification Test Questions – Flashcards 79 terms
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Kenneth McQuaid
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Adjusted Gross Income Consumer Economics Federal Income Tax Federal Income Tax Return
Test 4 EPF – Flashcards 15 terms
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Judith Simpson
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Adjusted Gross Income Disability Income Insurance Insurance Marketing-Insurance
Test Answers on Chapter 18 – Flashcards 20 terms
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Ben Stevenson
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Accounting Adjusted Gross Income Civil Law Federal Income Tax Income Tax Accounting Self Employment Tax
Fed Income Tax 5 – Flashcards 90 terms
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Oscar Hall
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Accounting Adjusted Gross Income Civil Law Federal Income Tax Income Tax Accounting
Income tax Quiz 2 – Flashcards 142 terms
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Blake Terry
142 terms
Which type of retirement account is tax-deferred; some or all contributions may be deductible from current taxes, depending on the individual’s adjusted gross income and coverage by an employer sponsored retirement plan?
Individual retirement account (IRA)
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When completing an individual tax return on Form 1040, one of the most important numbers is the adjusted gross income (AGI). Which of the following would NOT be included in AGI? A) Tax-exempt interest received from municipal bonds B) Alimony received from a former spouse C) Qualifying dividends on common stock D) Salary and commissions
Tax-exempt interest received from municipal bonds
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The adjusted gross income (AGI) limitation on medical expenses is 15 percent.
False, Medical expenses can be deducted to the extent that they exceed 10 percent of the taxpayer’s AGI. If the taxpayer is age 65 or older, the 7.5 percent limit applies.
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T/F: If you are in a 25 percent tax bracket then every dollar of your adjusted gross income will be taxed at 25 percent
False
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expenses incurred for the production or collection of income generally are deductions from adjusted gross income.
Arthur, age 19, is a full-time student at Gordon College and is a candidate for a bachelor’s degree. During the current tax year he received the following amounts: Tuition scholarship $2,400; Loan from college financial aid office $1,000; Cash support from parents $2,000; Ordinary cash dividend $500; and Cash prize awarded in contest $300. What is his adjusted gross income for the current tax year?
Multiple Choice 6-1 Child Tax Credit (LO 6.1) Russ and Linda are married and file a joint tax return claiming their three children, ages 4, 7, and 18, as dependents. Their adjusted gross income for 2015 is $105,300. What is Russ and Linda’s total child credit for 2015?
$2,000 Note: For an individual taxpayer to claim the child tax credit, certain criteria must be met. Post-Submission: Taxpayers are permitted to take a tax credit based on the number of their dependent children. The children must be under age 17, U.S. citizens, claimed as dependents on the taxpayer’s return, and meet the definition of ”qualifying child.” For a child to be a dependent, he or she must meet the following tests: Relationship test – child must be the taxpayer’s child, stepchild, or adopted child or the taxpayer’s brother/sister, half-brother/half-sister, or stepsibling or descendant of any of these. Domicile test – the child must have the same principal place of abode as the taxpayer for more than half the year. Age test – the child must be under age 19 or a full-time student under the age of 24. Joint return test – the child must not file a joint return with his or her spouse. Citizenship test – the dependent must be a United States citizen, a resident of the United States, Canada, or Mexico or an alien child adopted by and living with a U.S. citizen. Self-support test – a child who provides more than one-half of his or her own support cannot be claimed as a dependent of someone else. For 2015, the child tax credit is $1,000 per qualifying child. The available credit begins phasing out when AGI reaches $110,000 for joint filers ($55,000 for married taxpayers filing separately) and $75,000 for single or head of household taxpayers. The credit is phased out by $50 for each $1,000 (or part thereof) of AGI above the threshold amounts. Russ and Linda have two dependent children under the age of 17. Therefore, the available child tax credit is $2,000 ($1,000 x 2). The credit is not subject to the phaseout because their AGI is below the $110,000 threshold for joint filers.
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Multiple Choice 6-2 Child Tax Credit (LO 6.1) Jennifer is divorced and files a head of household tax return claiming her children, ages 4, 7, and 17, as dependents. Her adjusted gross income for 2015 is $91,300. What is Jennifer’s total child credit for 2015?
$1,150 Note: For an individual taxpayer to claim the child tax credit, certain criteria must be met. And, you round up when phasing out. Post-Submission: Taxpayers are permitted to take a tax credit based on the number of their dependent children. The children must be under age 17, U.S. citizens, claimed as dependents on the taxpayer’s return, and meet the definition of ”qualifying child.” The available credit begins phasing out when AGI reaches $110,000 for joint filers ($55,000 for married filing separately) and $75,000 for single or head of household taxpayers. The credit is phased out by $50 for each $1,000 (or part thereof) of AGI above the threshold amounts. For 2015, the child tax credit is $1,000 per qualifying child, or $2,000 total. Jennifer’s credit is calculated as follows: -Full credit for qualifying children ($1,000 x 2) | $2,000 -Phase out reduction* | ($850) -Jennifer’s child tax credit, 2015 | $1,150 * ($50 x [{$91,300 – $75,000} / $1,000] = ($50 x [$16,300 / $1,000] = ($50 x 17) = $850 (Note: Recall that the credit is phased out by $50 for each $1,000 (or part thereof). So, [$16,300 / $1,000] = 16.3 and is rounded up to 17 to cover ”or part thereof”).
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Multiple Choice 6-6 Individual Shared Responsibility (LO 6.4) James did not have minimum essential coverage for any part of 2015. If James is single and has 2015 adjusted gross income of $48,000, what is his individual shared responsibility payment?
$754 Note: There is a ”penalty tax” for failing to carry health insurance at a minimum level. The individual shared responsibility provisions require a taxpayer and members of the taxpayer’s family to have minimum essential coverage (MEC) or an exemption from MEC. Post-Submission: There is a ”penalty tax” for failing to carry health insurance at a minimum level. The individual shared responsibility provisions require a taxpayer and members of the taxpayer’s family to have minimum essential coverage (MEC) or an exemption from MEC. Alternatively, the taxpayer must pay a tax (referred to as the individual shared responsibility) when filing the 2015 federal income tax return in 2016. MEC is the level of coverage required by the ACA and is intended to ensure that the health insurance purchased by taxpayers covers essential health benefits that might be needed by taxpayers and their families. Taxpayers will typically obtain MEC health insurance through their employer, by purchasing directly from an insurance company or by purchasing coverage through one of the health insurance marketplaces (or exchanges) operated by a state or the federal government. If the minimum premiums for MEC are more than 8 percent of the taxpayer’s income, then the taxpayer is exempt from the shared responsibility tax. In addition, a gap in MEC of less than three consecutive months does not require a payment of the shared responsibility. There are also other hardship exemptions from the payment available. Taxpayers using an exemption to avoid the individual shared responsibility should file Form 8965. For 2015, the annual individual shared responsibility is the greater of (1) 2% of the household income above the required filing threshold for the taxpayer’s filing status or (2) the 2015 flat annual dollar amount of $325 per adult and $162.50 per child limited to a family maximum of $975. James’ payment is the greater of $754 (rounded) [($48,000 – $10,300*) x 2%] or $95. *($4,000 + $6,300) = $10,300
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