The American Opportunity Tax Credit is a tax credit available for qualified tuition, enrollment fees, and course materials incurred in the first 4 years of post-secondary education for the tax payer, spouse or dependent. O True O False
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- An independent student has a modified adjusted gross income of $25,000 and qualifying educational expenses of $18,000. If the American Opportunity Tax Credit is used, what is the amount of the tax credit?Which statements are accurate for reasons why students should be filing returns every year after they turn age 18 regardless of how small their income is: I. Will always receive a tax refund. II. May be eligible to receive the Goods and Services Tax (GST) credit. III. May be eligible to claim a non-refundable tax credit for tuition (even if the tuition tax credit is not used in the year to reduce taxes, Canada Revenue Agency (CRA) will be made aware of these credits to carry forward for use in future years). IV. May be eligible to claim a non-refundable tax credit for interest on qualifying student loans (even if the interest is not claimed, it can be carried forward to any of the following five years). V. May be eligible to claim a deduction for moving expenses. VI. May be eligible to build up Registered Retirement Savings Plan (RRSP) contribution room if there is earned income. A II, III, IV, V, and VI I, II, III, IV, and VI C All the responses I, III, IV, V, and VI E I, II, IV, and…From the following list of tax credits, which credits help to reduce the tax liability on a taxpayer's taxable income? 1. Personal tax credit 2. Earned income credit 3. Child savers credit 4. Student loan interest credit 1, 2, and 3. 2 and 3. 2, 3, and 4. 1, 2, 3, and 4.
- When determining earnings subject to SE tax, the taxpayer may want to use one of the optional methods whether if they have a small net profit or loss and which of the following conditions applies A. They are eligible to receive the Additional Child Tax Credit B. They can claim a Credit for Dependent or Child Care Expenses C. Taxpayer wants to receive a Credit for Social Security Benefit Coverage D. All of the aboveWhat is the maximum investment income a taxpayer is allowed to have and still be allowed to claim the earned income credit?$ Why is there an investment income limit in the tax law regarding the credit? The earned income credit is meant to assistTo be eligible for American Opportunity Credit, the student must meet all the following, except Select one Oa Be pursuing a degree or other recognized education credential b. Be enrolled at least half time for at least one academic period beginning in the tax year OC Does not have a felony drug conviction at the end of the tax year Od Did not claim the AOTC or the former Hope credit on any previous tax return
- For purposes of determining income eligibility for the premium tax credit, household AGI is AGI for the taxpayer and spouse AGI for the taxpayer, spouse, and any other household members required to file a tax return AGI for the taxpayer, spouse, and any other household members required to file a tax return plus any tax-exempt income AGI for the taxpayer, spouse, and any other household members required to file a tax return plus any tax-exempt income and untaxed Social Security benefitsQuestion 1 Calculate Total Assessable Income, Taxable Income, Tax Liability, Student loan (HECS), Medicare Levy, and Medicare Levy Surcharge if applicable, for the taxpayer (Susanne) with the information below: • Susanne is a single and an Australian resident plans to lodge a tax return for the tax year 2020 - 2021. • Her total taxable income is $90,000 (Including tax withheld). • She does not have private health insurance. • Susanne has a student loan HECS outstanding for her previous study at Sydney University of $53,000. • Her employer pays superannuation guarantee charge of 9.5% on top of her salary to her nominated fund. • Susanne earned a passive income of $10,000 from the investments in shares in the same tax year. Hint: The following website can be used to cross-check your answer, but you need to provide the detailed calculations, rates and explanations with the screenshots of rates from the ATO website.es Mc Graw Hill In each of the following cases, certain qualifying education expenses were paid during the tax year for individuals who were the taxpayer, spouse, or dependent. The taxpayer has a tax liability and no other credits. Required: Determine the amount of the American opportunity tax credit (AOTC) and/or the lifetime learning credit that should be taken in each instance. a. A single individual with modified AGI of $32,900 and expenses of $2,560 for al child who is a full-time college freshman. b. A single individual with modified AGI of $44,500 and expenses of $3,320 for a child who is a full-time college junior. $79,300 and expenses of c. A couple, married filing jointly, with modified AGI of $6,400 for a child who is a full-time graduate student. Allowable Credit Type of Credit AOTC AOTC Lifetime learning credit AOTC Lifetime learning credit
- Income Tax Credits (LO. 6) Refer to Exhibit 8-5 and 8A-1 SCHEDULE EIC (EARNED INCOME CREDIT) 2018 EARNED INCOME CREDIT TABLE to answer the following questions. Determine the total allowable 2018 earned income credit in each of the following situations: a. Rina is single and earns $6,800 in salary for the year. In addition, she receives $2,200 in unemployment compensation during the year. b. C. Lachlan is single with one dependent child. During the year, he earns $8,000 as a waiter and receives alimony of $10,000 and child support of $5,000. Zorica is a single parent with two dependent children. She earns $19,000 from her job as a mechanic. She also receives $3,000 in child support from her ex-husband. d. Elliot and Pam are married and have three dependent children. Elliot and Pam earn $12,000 and $9,000 from their jobs, respectively. They receive $800 in interest and $1,000 in dividend income. Assume the taxpayer files a joint return.In each of the following cases, certain qualifying education expenses were paid during the tax year for individuals who were the taxpayer, spouse, or dependent. The taxpayer has a tax liability and no other credits. Required: Determine the amount of the American opportunity tax credit (AOTC) and/or the lifetime learning credit that should be taken in each instance. > Answer is complete but not entirely correct. Allowable Credit a. A single individual with modified AGI of $32,900 and expenses of $2,720 for a child who is a full-time college freshman. b. A single individual with modified AGI of $44,500 and expenses of $3,640 for a child who is a full-time college junior. c. A couple, married filing jointly, with modified AGI of $79,300 and expenses of $6,800 for a child who is a full-time graduate student. $ $ $ Type of Credit 2,350X AOTC 2,450 AOTC 1,600 X Lifetime learning creditQUESTION 2 - Calculate Total Assessable Income, Taxable Income, Tax Liability, Medicare Levy and Medicare Levy Surcharge, if applicable, for the tax payer (Jenny) with information below: Jenny is a resident single mom with one dependent child (7 years old) tax payer of Australia for the tax year 2019-2020 Her Taxable Salary earned is $120,000 (Including tax withheld) having no private health insurance. Jenny has a student loan outstanding for his previous studies at Queensland University of $32,000. Jenny’s employer pays superannuation guarantee charge of 9.5% on top of her salary to her nominated fund. Jenny earned a passive income of $5,000 from the investments in shares in the same tax year.
