Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Question
Chapter 5, Problem 17MCQ
To determine
Concept Introduction:
Gross income is the starting point for calculating a taxpayer’s liability. It includes all the income from any sources unless there is an exception in the law. In gross income, non-cash items are included at the fair market value. These incomes are excluded from the
The cost of expense which is not deductible as medical expense.
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Which of the following is true about the self-employed health insurance deduction?
a.The deduction can be claimed when a subsidized employer health insurance plan is also available.
b.Long-term care premiums may not be deducted within specified dollar limitations based on age.
c.Dental insurance is not included as deductible self-employed health insurance.
d.The deduction can be claimed if the taxpayer has an overall business loss from self-employment.
e.The self-employed health insurance deduction is a for AGI deduction.
What is the maximum amount of qualified expenses that a taxpayer with one qualifying child can claim for the basis of the Form 2441 credit for dependent care for TY2023?
a. $6,000
b. $5,000
c. $3,000
d. There is no limit to the expenses
For purposes of the Child and Dependent Care Credit, all the following are qualified
expenses except for which one?
a.
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b.
d.
A $700 adult day care expense for a disabled spouse while the taxpayer workers.
A $450 childcare expense while the taxpayer obtains emergency medical care.
A $500 payment to a grandparent for childcare while the taxpayer is employed.
A $350 payment to a day care center while the taxpayer is looking for
employment.
Chapter 5 Solutions
Income Tax Fundamentals 2020
Ch. 5 - Prob. 1MCQCh. 5 - Prob. 2MCQCh. 5 - Prob. 3MCQCh. 5 - Which of the following is true about the...Ch. 5 - Lyndon, age24, has a nonworking spouse and earns...Ch. 5 - Prob. 6MCQCh. 5 - Prob. 7MCQCh. 5 - Prob. 8MCQCh. 5 - Prob. 9MCQCh. 5 - Prob. 10MCQ
Ch. 5 - Prob. 11MCQCh. 5 - Prob. 12MCQCh. 5 - Prob. 13MCQCh. 5 - Prob. 14MCQCh. 5 - Eliza is a kindergarten teacher for Alexander...Ch. 5 - Prob. 16MCQCh. 5 - Prob. 17MCQCh. 5 - Prob. 18MCQCh. 5 - Prob. 19MCQCh. 5 - Prob. 20MCQCh. 5 - Prob. 21MCQCh. 5 - Prob. 22MCQCh. 5 - Prob. 23MCQCh. 5 - Prob. 24MCQCh. 5 - Prob. 25MCQCh. 5 - Prob. 26MCQCh. 5 - Prob. 27MCQCh. 5 - Prob. 28MCQCh. 5 - Prob. 29MCQCh. 5 - Prob. 30MCQCh. 5 - Which of the following would typically be...Ch. 5 - Which of the following is not a possible...Ch. 5 - Prob. 33MCQCh. 5 - Prob. 34MCQCh. 5 - Evan participates in an HSA carrying family...Ch. 5 - Prob. 2PCh. 5 - Karen, 28 years old and a single taxpayer, has a...Ch. 5 - Phil and Linda are 25 -year-old newlyweds and file...Ch. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 7PCh. 5 - Bob is a single, 40 -year-old doctor earning...Ch. 5 - Prob. 9PCh. 5 - During 2019 , Jerry is a self-employed therapist,...Ch. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Janet needs an elevator seat attached to her...Ch. 5 - Lyndon's employer withheld $10,100 in state income...Ch. 5 - Mike sells his home to Jane on April 2,2019 . Jane...Ch. 5 - Prob. 20PCh. 5 - Prob. 21PCh. 5 - Prob. 22PCh. 5 - Ken paid the following amounts for interest during...Ch. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - At the end of 2019, Mark owes $250,000 on the...Ch. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - On January 3,2019, Carey discovers his diamond...Ch. 5 - Prob. 32PCh. 5 - Prob. 33P
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- Which of the following is true about the self-employed health insurance deduction? The deduction can be claimed when a subsidized employer health insurance plan is also available. The deduction can be claimed if the taxpayer has an overall business loss from self-employment. Long-term care premiums may not be deducted within specified dollar limitations based on age. The self-employed health insurance deduction is a for AGI deduction. Dental insurance is not included as deductible self-employed health insurance.arrow_forwardGreg has self-employment income in 2021 of $96,000. The self-employment tax is: (round to the nearest dollar)arrow_forwardA self-employed taxpayer may be eligible to deduct amounts paid for medical insurance for themselves and for their families, as long as neither they nor their spouse were eligible for employer-sponsored health insurance. To claim this deduction, a qualifying taxpayer should: 1 Claim a nonrefundable tax credit based on the cost of the insurance. 2 Deduct the cost of the health insurance premiums as a business expense on Schedule C. 3 Only deduct the health insurance costs on Schedule A if they itemize their deductions. 4 Report the health insurance costs, up to the amount of net business income, as an adjustment to income on Schedule 1 and on Form 1040.arrow_forward
- Which of the following statements concerning the credit for child and dependent care expenses is not correct for 2022? A. If a taxpayer is a full-time student with no earned income, no credit for child and dependent care expenses can be claimed. B. A taxpayer is not allowed both a deduction as a medical expense and the credit for child and dependent care expenses on the same amount. C. A taxpayer is not allowed both an exclusion from income and the credit for child and dependent care expenses on the same amount. D. If a taxpayer’s adjusted gross income is over $43,000, the rate for the credit for child and dependent care expenses is 20%.arrow_forward1. Which of the following is true about the self-employed health insurance deduction? a.The cost of insurance for dependent children is not allowed. b.Long-term care insurance is allowed as a deduction, subject to a dollar limitation. c.Life insurance is allowed as a deduction. d.Medical insurance is allowed as a deduction, subject to a dollar limitation. e.Dental insurance is not part of the allowable deduction. 2. Jody is a physician's assistant (not covered by a retirement plan) with a salary of $40,000 from the hospital where she is employed. She supports her husband, Andre, who sells art work and has no earned income. They have no other sources of income. Both are in their twenties. What is the maximum total amount that Jody and Andre may contribute to their traditional IRAs and deduct for the 2021 tax year? a.$12,000 b.$6,000 c.$5,500 d.$11,000 e.None of these choices are correct. 3. Gail is a single elementary school teacher. She buys the following items for use in her…arrow_forwardA qualifying individual for the purposes of the child and dependent care expenses credit includes all of the following except: Multiple Choice A dependent under the age of 13. An adult child who is incapable of caring for himself/herself, who lived with the taxpayer for at least half of the year. A dependent child, age of 17 who attends school full time. A spouse who is incapable of caring for himself/herself, who lived with the taxpayer for at least half of the year.arrow_forward
- Which of the following are qualified medical expenses for purposes of itemized deductions? a.Medical expenses paid personally out of a standard checking account. b.Medical expenses that were reimbursed in the same year. c.Medical expenses paid with funds out of a Health Savings account. d.Health insurance premiums paid pre-tax through an employer's benefit plan.arrow_forwardWhich of the following items would be included in the gross income of the recipient? Insurance payments for medical care of a dependent child Insurance payments for loss of the taxpayer's sight Season tickets worth $2,000 given to a son by his father Payments to a student for working at the student union food court Lodging provided to a worker on a remote oil rigarrow_forwardWhich of the following is not a requirement to receive the premium tax credit for health care? Health care through the employer is not available Health insurance is purchased through the state or federal exchange Income must be no greater than 200 percent of the federal poverty line The taxpayer cannot be claimed as a dependentarrow_forward
- To enroll in Medicare Part C, an individual must A. also enroll in Medicare Part D B. have an annual income under $15, 000 C. already be enrolled in Medicare Part A only D. already be enrolled in both Medicare Parts A and B.arrow_forwardWhich of the following are deductible medical expenses? Select all that apply. Nonprescription drugs (i.e., over the counter drugs) Vitamins and other health supplements A gym membership Visiting a dentist for a teeth clearning Prescription Drugs Transportation and lodging related to medical carearrow_forwardWhich one of the following statements about the premium tax credit is FALSE? Select the correct answer. O A. Consumers who are eligible for and receive advance payments of the premium tax credit don't have to file federal income taxes at the end of the coverage year. O B. Consumers may choose to purchase a qualified health plan through a Marketplace without advance payments of the premium tax credit and then wait to apply for the premium tax credit when they file their federal income tax returns. O C. Consumers should be made aware of price differences between qualified health plans and how their eligibility for advance payments of the premium tax credit will help lower their monthly premium costs. OD. If consumers who are eligible for a premium tax credit choose to take some or all of it in advance, the advance payment will be sent directly to the health insurance company that operates their chosen qualified health plan.arrow_forward
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