Tax Exam 3 (Ch 14) Question and
answers verified to pass
What percentage of prior year tax should be paid in by 12/31/18 for a calendar
year individual taxpayer if their taxable income is $150,000 or less? - correct
answer 90% of prior year when taxable income is $150,000 or less
What are the new thresholds for phasing-out the AMT exemption for single
and married taxpayers under the 2018 TCJA? - correct answer $500,000 for
single
$1,000,000 for married filing joint
Michael works as a tax accountant for GCU and earned $130,000. He also
has a side business selling textbooks to college students and earned $20,000.
What is his self-employment tax for 2018? - correct answer $536
20,000*.9235 (given)=18,470
18,470*.029 (given) =536 (rounded)
Chris and Molly are married and file a joint tax return. In 2018 they reported
taxable income of $250,000 and had tax preference items of $90,000. Their
regular tax lability is $48,579. What is their total tax liability? - correct answer
$60,738
To find tentative minimum tax take $250,000 + 90,000 = $340,000. The AMT
exclusion for MFJ is $109,400 - and all of it is allowable because their AMTI
does not exceed $500,000. So take $340,000 - 109,400 = $230,600 tax base.
The first $191,500 is taxed at 26% for $49,790. The remainder is taxed at
28% (230,600-191,500=39,100 x .28 = 10,948. Then add $49,790 + 10,948 =
$60,738 tentative tax. Compared reg tax of $48,579 to tentative tax of $60,738
and their total liability is $60,738 because AMT is more.
answers verified to pass
What percentage of prior year tax should be paid in by 12/31/18 for a calendar
year individual taxpayer if their taxable income is $150,000 or less? - correct
answer 90% of prior year when taxable income is $150,000 or less
What are the new thresholds for phasing-out the AMT exemption for single
and married taxpayers under the 2018 TCJA? - correct answer $500,000 for
single
$1,000,000 for married filing joint
Michael works as a tax accountant for GCU and earned $130,000. He also
has a side business selling textbooks to college students and earned $20,000.
What is his self-employment tax for 2018? - correct answer $536
20,000*.9235 (given)=18,470
18,470*.029 (given) =536 (rounded)
Chris and Molly are married and file a joint tax return. In 2018 they reported
taxable income of $250,000 and had tax preference items of $90,000. Their
regular tax lability is $48,579. What is their total tax liability? - correct answer
$60,738
To find tentative minimum tax take $250,000 + 90,000 = $340,000. The AMT
exclusion for MFJ is $109,400 - and all of it is allowable because their AMTI
does not exceed $500,000. So take $340,000 - 109,400 = $230,600 tax base.
The first $191,500 is taxed at 26% for $49,790. The remainder is taxed at
28% (230,600-191,500=39,100 x .28 = 10,948. Then add $49,790 + 10,948 =
$60,738 tentative tax. Compared reg tax of $48,579 to tentative tax of $60,738
and their total liability is $60,738 because AMT is more.
