Business & Finance homework help
Business & Finance homework help.
Tax Credits to Reduce Tax Liability
Using your text, complete the following. In these problems, apply your knowledge of the variety of tax credits designed to reduce a taxpayer’s tax liability.
- Problem 47, on page 9-49.
- Problem 51, on page 9-50.
- Problem 53, on page 9-51.
- Problem 54, on page 9-51.
- Problem 55, on page 9-51.
- Problem 56, on page 9-52.
- Problem 57, on page 9-52.
- Problem 58, on page 9-52.
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47. Adrienne is a single mother with a 6-year-old daughter who lived with her during the entire year. Adrienne paid $3,900 in child care expenses so that she would be able to work. Of this amount, $500 was paid to Adrienne’s mother, whom Adrienne cannot claim as a dependent. Adrienne had net earnings of $1,900 from her jewelry business. In addition, she received child support payments of $21,000 from her ex-husband. What amount, if any, of child and dependent care credit can Adrienne claim? |
| 51. Walt and Deloris, who file a joint return, have two dependent children, Bill and Tiffany. Bill is a freshman at State University, and Tiffany is working on her graduate degree. The couple paid qualified expenses of $3,900 for Bill (who is a half-time student) and $7,800 for Tiffany. What are the amount and type of education tax credits that Walt and Deloris can take, assuming they have no modified AGI limitation? |
- In 2019, Jeremy and Celeste, who file a joint return, paid the following amounts for their daughter, Alyssa, to attend the University of Colorado during academic year 2019–2020. Alyssa was in her first year of college and attended full-time.
| Tuition and fees (for fall semester 2019) | $1,950 |
| Tuition and fees (for spring semester 2020) | 1,000 |
| Required books | 600 |
| Room and board | 1,200 |
- Jenna paid foreign income tax of $1,326 on foreign income of $8,112. Her worldwide taxable income was $91,400, and her U.S. tax liability was $23,000. What is the amount of the foreign tax credit (FTC) allowed? What would be the allowed FTC if Jenna had paid foreign income tax of $2,400 instead?
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55. Determine the amount of the child tax credit in each of the following cases: a. A single parent with modified AGI of $213,400 and one child. b. A single parent with modified AGI of $77,058 and three children. c. A married couple, filing jointly, with modified AGI of $407,933 and two children. |
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56. Determine the retirement savings contributions credit in each of the following cases: a. A married couple filing jointly with modified AGI of $37,500 and an IRA contribution of $1,600. b. A married couple filing jointly with modified AGI of $58,000 and an IRA contribution of $1,500. c. A head of household taxpayer with modified AGI of $33,000 and Roth IRA contribution of $2,000. d. A single taxpayer with modified AGI of $12,000 and an IRA contribution of $2,300. |
57.Niles and Marsha adopted an infant boy (a U.S. citizen). They paid $15,500 in 2018 for adoption-related expenses. The adoption was finalized in early 2019. Marsha received $3,000 of employer-provided adoption benefits. For question (a), assume that any adoption credit is not limited by modified AGI or by the amount of tax liability.
- What amount of adoption credit, if any, can Niles and Marsha take in 2019?
- Using the information in question (a), assume that their modified AGI was $223,000 in 2019. What amount of adoption credit is allowed in 2019?
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58. Determine the amount of the Earned Income Credit in each of the following cases. Assume that the person or persons are eligible to take the credit. Calculate the credit using the formulas. a. A single person with earned income of $7,554 and no qualifying children. b. A single person with earned income of $22,500 and two qualifying children. c. A married couple filing jointly with earned income of $34,190 and one qualifying chi |