The use of the earned income credit could result in a taxpayer receiving a refund even though the taxpayer has not paid any income taxes.
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The use of the earned income credit could result in a taxpayer receiving a refund even though the taxpayer has not paid any income taxes.
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- Discuss actions a taxpayer can take if it is anticipated that his income taxes will be substantially underpaid in order to minimize penalties.A landlord who receives prepaid rent is required to report that amount as gross income when the payment is received. Why would Congress choose to do this? What problem does this create for the taxpayer? C O A. Congress taxes prepaid rental income due to the concern that taxpayers who spend the money will be unable to pay the tax when t comes due. The problem created for taxpayers is that they are taxed before they incur related expenses, such as repairs, insurance, and depreciation. Therefore, there is a mismatching of revenue and expense. O B. O C. Congress taxes prepaid rental income to collect more taxes from a taxpayer by increasing their tax bracket with the additional income. The problem this causes for the taxpayer is inconsistent taxable income from year to year and increases the risk of an audit. O D. Congress taxes prepaid rental income due to numerous landlords not reporting this income in the following tax year. The problem created for taxpayers is that they are taxed…Which of the following is an adjustment that will generally result in lower tax liability for an eligible taxpayer because it directly reduces the taxpayer's total income? An education credit. The health savings account deduction. Medical and dental expenses deduction. The retirement savings contributions credit (Saver's Credit)
- A taxpayer can not claim the hefalth insurance premium tax credit if?s this statement true about underpayment penalties? The taxpayer will never received an underpayment penalty so long as their taxes are paid before the original due dateWhen applying credits against a taxpayer's gross tax liability, nonrefundable personal credits are applied first, then business credits, and finally refundable personal credits. True or False
- Describe some reasons why it is a good idea to file a tax return if you have earned income, even if you do not owe any taxes.True or false: After calculating your income taxes, you may find yourself owing to the IRS instead of getting a refund?What is the consequence of the purchases of a OPT-taxpayer from a VAT taxpayer? Options: i. The transaction shall be subject to VAT, the amount of which forming part to the cost of the purchase. ii. The transaction shall be subject to VAT, the amount of which can be used as an input tax credit. iii. The transaction shall be subject to zero-rated VAT since the buyer is not subject to VAT. iv. The transaction shall not be subject to value-added tax since he is not VAT registered.
- Which of the following statements is false regarding the earned income credit (EIC)? Multiple Choice If certain requirements are met, a taxpayer may receive advance payments of EIC. Maximum amount of the credit depends on the earned income and number of children. A taxpayer without children cannot claim the credit. The credit is refundable.What is the maximum investment income a taxpayer is allowed to have and still be allowed to claim the earned income credit?$ Why is there an investment income limit in the tax law regarding the credit? The earned income credit is meant to assistWhile earnings on assets held in a Tax Free Savings Account (TFSA) will not be taxed while the assets are in the plan, the accumulated income will be subject to tax when it is withdrawn from the plan. True or False
