Chapter 8 Flashcards
true/false
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
true
true/false
capital gains are always taxed at a higher rate than ordinary income
false
The AOTC applies to:
qualifying education expenses for the first four years of postsecondary education
capital gains is taxed at ____ for a single taxpayer with income up to $44,625
0%
the child tax credit is ______ per QC and _____ per QD
$2,500
$500
for the child tax credit, a QC has to be ______ at YE and a QD has to be _______ at YE
under 17
17 or older
formula for excess AGI in child tax credit
[(AGI - 200,000)/1,000]50
subtracted from the CTC before phase-out
*400,000 if MFJ
order in which tax credits are applied
nonrefundable, business, refundable
is it refundable?
child tax credit
partially
is it refundable?
child and dependent care credit
no
is it refundable?
earned income credit
yes
is it refundable?
AOTC
partially (40%)
is it refundable?
Lifetime Learning Credit
no
how much is the child and dependent care credit?
20% to 35% of childcare expenses, depending on AGI
which tax credits phase out based on AGI?
child tax credit
AOTC
lifetime learning credit
qualifications for the EIC
must have earned income AND must have a QC, or be between 25 and 65
the child and dependent care credit is for:
children under 13 or those permanently disabled
qualifications to claim the child and dependent care credit:
must work (earned income) or be a full-time student
AOTC maximum
$2,500 per year
formula to find LLC
20% of up to $10,000 qualifying expenses
formula to find AOTC
100% of first $2,000 qualified expenses + 25% in excess, up to $2,500
when are taxpayers required to file a return?
when their gross income exceeds their standard deduction
