Taxes on Individuals

Question 1

Penalty for over-contributing to Roth IRA

Answer 1

In 2021 you can’t contribute to Roth if MAGI is over $140K, if you do it’s a 6% penalty plus include contribution as income.

Question 2

Schedule H household employment taxes

Answer 2

File Sch H if:

• You paid a household employee $2,300 or more in cash wages
• Pay FUTA tax if combined cash wages for all hh employees is $1,000 or more in any calendar quarter.
• You withheld any fed income tax from their wages.

Question 3

Child and Dependent Care Credit

Answer 3

For 2021 ONLY:

• Max expenses of $8,000 for one kid, $16,000 for 2 or more and refundable
• Applicable % is 50% with AGI less than $125,000
• Max credit % is 20% reduced by 1% for each $2K that AGI exceeds $400,000

For 2017-2020:

• Max expenses of $3,000 for one kid, $6,000 for 2 or more, not refundable
• Applicable % is 35% with AGI less than $15,000
• Max 20% credit for AGI above $43,000
• Max credit $1,050 for one kid, $2,100 for 2 or more

Question 4

American Opportunity and Lifetime Learning credits

Answer 4

• Partial phaseout if MAGI is between $80,000-$90,000 ($160-$180 MFJ)
• Complete phaseout is MAGI $90,000 or more ($180K is MFJ)