R2-M3

Question 1

Methods of computing estimated taxes due:

Answer 1

Lesser of:
Annualization method: 90% current yr tax
Prior year method: 100% of prior yr (110% if AGI>$150,000)

Question 2

Failure to pay penalty:

Answer 2

Does not apply to amts

Question 3

Adoption credit:

Answer 3

• Reasonable exp, cost and fees

- Does NOT include medical expenses

Question 4

Refundable credits:

Answer 4

• Child tax credit
• Earned income credit*
• Withholding taxes
• Part of american opp credit & social security taxes paid

Question 5

Child and dependent care credit:

Answer 5

• qualifying child under 13
• taxpayers must both produce earned income
• 35% (20% high AGI) OF:
• eligible expenditures OR
• $3000 or $6000 max for >1 child OR
• limited to lowest earned income

Question 6

Refund for excess FICA (social security tax withheld) when:

Answer 6

• Taxpayer has Two or more employers

- Tax withheld in amt greater than max

Question 7

Retirement plan contribution credit:

Answer 7

• At least 18
• Not a full time student
• Not a dependent
• Credit decreases as income increases

Question 8

Child tax credit

Answer 8

• $1000 for each qualifying child under 17

- phase out for higher AGI

Question 9

Earned income credit requirements

Answer 9

• Live in US >1/2 yr
• Meet low income threshold
• Not have over specified amt of disqualified income
• Be over 25 and under 65

Question 10

Foreign tax credit

Answer 10

• Can be deduction or credit
• Credit limitation= (taxable income from all foreign operations / worldwide taxable income)* US tax liability before credit on worldwide taxable income
• Lesser of foreign taxes paid or limitation amt

Question 11

American opportunity tax credit

Answer 11

• Qualified exp for first 4 years of college
• -max of $2,500
• 100% of first $2,000, 25% of next 2,000
• per student
• High AGI limit

Question 12

Credit for elderly and disabled

Answer 12

• Either over 65 or permanently disabled

- 15% of eligible income