Multiple Choice Questions
1. Jamison is a single dad with two dependent children, Zoey, age 7 and Conner, age 3. He has an AGI of $81,000 and paid $6,300 to a qualified day care center for the two children. What amount can Jamison receive for the child and dependent care credit?
a. $600.
b. $1,200.
c. $1,260.
d. $6,300.
2. Allie and Buddy are married, file a joint return, and have one son, Zack, age 5. Buddy has earned income of $42,000 and Allie was a full-time student for 8 months (with no income). They paid a qualified child care center $3,450. How much is Allie and Buddy’s child and dependent care credit for the year?
a. $0.
b. $420.
c. $630.
d. $725.
3. Avril and John are ages 70 and 72, respectively, and file a joint return. They have an AGI of $18,000 and received $1,500 in nontaxable Social Security benefits. How much can Avril and John take as a credit for the elderly or the disabled?
a. $300.
b. $1,125.
c. $1,500.
d. $2,000.
4. Dennis and Vera are ages 69 and 59, respectively, and file a joint return. They have an AGI of $28,000 and received $2,000 in nontaxable Social Security benefits. How much can Dennis and Vera take as a credit for the elderly or the disabled?
a. $0.
b. $1,125.
c. $2,000.
d. $7,500.
5. Nathan paid $2,750 in qualifying expenses for his daughter who attended a community college. How much is Nathan’s lifetime learning credit without regard to AGI limitations or other credits?
a. $250.
b. $550.
c. $825.
d. $1,375.
6. DJ and Gwen paid $3,200 in qualifying expenses for their son, Nikko, who is a freshman attending the University of Colorado. DJ and Gwen have AGI of $170,000 and file a joint return. What is their allowable American opportunity tax credit (AOTC) after the credit phaseout based on AGI is taken into account?
a. $0.
b. $1,150.
c. $2,500.
d. $3,200.
7. Darren paid the following expenses during November 2014 for his son Sean’s college expenses for spring 2015 semester, which begins in January 2015:
Tuition………………………….. $12,000
Housing ………………………… 8,000
Books …………………………… 1,500
In addition, Sean’s uncle paid $500 in fees on behalf of Sean directly to the college. Sean is claimed as Darren’s dependent on his tax return. How much of the above paid expenses qualify for the purpose of the American opportunity tax credit deduction for Darren in 2014?
a. $3,500.
b. $8,000.
c. $12,000.
d. $14,000.