Ch. 9: Tax Credits

Question 1

List Refundable Tax Credits (5)

Answer 1

1. American Opportunity Tax Credit
2. Earned Income Credit
3. Credit for tax on undistributed gain from A) mutual fund or B) REIT
4. Health Coverage Tax Credit
5. Credit for Excise Tax on Gasoline and Special Fuels

Question 2

Lifetime Learning Credit

Answer 2

20% of the first 10,000 of tuition and edu expenses.

Question 3

What is the deductible amount for “Other Dependent Credit”?

Answer 3

Tax-payers with dependents other than qualified children may claim a $500 non-refundable credit (for each Other Dependent) for The Child Tax Credit.

Question 4

What is the Amount of the Child Tax Credit?

Answer 4

Up to $2,000 per child, for a maximum of $6,000.

Question 5

Income Threshold for Child Tax Credit for Single and MFJ

Answer 5

Single : $200,000
MFJ : $400,000

Question 6

What is the rule for The Child Tax Credit, based on the income limitation?

Answer 6

The Child Tax Credit is reduced $50 for each $1,000 that a taxpayer’s MAGI exceeds the Income Thresholds.

EXAMPLE:
MAGI = 403,400
404,000 - 400,000 = 4,000
4,000 / 1,000 = 4 * 50 = 200.
6000 - 200 = 5,800 CREDIT

Question 7

What is the Income Threshold for AOTC and LLC for Single and MJF

Answer 7

Single : $80,000 - $90,000
MFJ : $160,000 - $180,000

Question 8

What is the Section 179 Expensing Maximum?

Answer 8

$1,080,000

Question 9

To qualify for Section 179, how much of the time must an asset be used for?

Answer 9

Minimum of 50% of the time asset must be in use for the purpose of generating a profit for a trade or business.

Question 10

What is the income phaseout for Section 179?

Answer 10

$2,700,000