MCGRAW HILL TAXATION OF
INDIVIDUALS 16TH EDITION SPILKER
EXAMINATION TEST 2026 QUESTIONS
WITH SOLUTIONS
◉ Tax return is due on Answer: The 15th day of the 4th month of the
taxpayer's year end
◉ How long is an extension? Answer: 6 Months
◉ What is the exception for SE earnings? Answer: Must file when SE
earnings are >= $400
◉ What are the safe harbor requirements? Answer: -Pay: 90% of current
tax liability or 100% of previous years tax liability (25% @ each
estimated filing deadline)
-If AGI is > $150,000, must pay 110% of previous years liability
◉ What is the late filing penalty? Answer: -5% of tax owed per month,
up to 25% if not fraudulent
-15% of tax owed per month up to 75% if fraudulent
-No penalty if no tax due
, ◉ What is the late payment penalty? Answer: -.5% of amount due up to
25% if not fraudulent
-15% of amount due per month up to 75% if fraudulent
◉ What are the tax rates for long-term (net) capital gains? Answer: -
Generally 15% but could be up to 28% or zero
-2 different rates possible
◉ What are the tax rates for qualified dividends? Answer: -Generally
15% but could be up to 20% or zero
-2 different rates possible
◉ How do you know which preferential tax rate to use? Answer: -0% to
the extent the income would have been at 10 or 15% if it were ordinary
income
-20% to the extent the income would have been taxed at 39.6% if it were
ordinary income
-15% for all other taxpayers
◉ Step 1 in determining tax liability using preferential tax rates Answer:
Split income into the portion that is subject to the preferential rate and
the portion taxed at ordinary rates
◉ Step 2 in determining tax liability using preferential tax rates Answer:
Compute the tax separately on each type of income. (Use tax rate
schedule for portion of income that is taxed at ordinary rates)
INDIVIDUALS 16TH EDITION SPILKER
EXAMINATION TEST 2026 QUESTIONS
WITH SOLUTIONS
◉ Tax return is due on Answer: The 15th day of the 4th month of the
taxpayer's year end
◉ How long is an extension? Answer: 6 Months
◉ What is the exception for SE earnings? Answer: Must file when SE
earnings are >= $400
◉ What are the safe harbor requirements? Answer: -Pay: 90% of current
tax liability or 100% of previous years tax liability (25% @ each
estimated filing deadline)
-If AGI is > $150,000, must pay 110% of previous years liability
◉ What is the late filing penalty? Answer: -5% of tax owed per month,
up to 25% if not fraudulent
-15% of tax owed per month up to 75% if fraudulent
-No penalty if no tax due
, ◉ What is the late payment penalty? Answer: -.5% of amount due up to
25% if not fraudulent
-15% of amount due per month up to 75% if fraudulent
◉ What are the tax rates for long-term (net) capital gains? Answer: -
Generally 15% but could be up to 28% or zero
-2 different rates possible
◉ What are the tax rates for qualified dividends? Answer: -Generally
15% but could be up to 20% or zero
-2 different rates possible
◉ How do you know which preferential tax rate to use? Answer: -0% to
the extent the income would have been at 10 or 15% if it were ordinary
income
-20% to the extent the income would have been taxed at 39.6% if it were
ordinary income
-15% for all other taxpayers
◉ Step 1 in determining tax liability using preferential tax rates Answer:
Split income into the portion that is subject to the preferential rate and
the portion taxed at ordinary rates
◉ Step 2 in determining tax liability using preferential tax rates Answer:
Compute the tax separately on each type of income. (Use tax rate
schedule for portion of income that is taxed at ordinary rates)
