The kiddie tax exists to mitigate what? O Children from choosing not to be dependents of their parents. O Parents from making their children work at too young of an age. O Children from taking control of their parents investments. Parents from shifting income to dependent children to lower their tax liability.
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- In connection with the application of the kiddie tax, comment on the following. A. The child has only earned income . B. The child has a modest amount of unearned income. C. The child is age 20, is not a student, and is not disabled. D. The child is married E. Effect of the parental election. F. The result when the parental election is made and the married parents file separate returns.Which of the following will be considered as tax evasion? Reducing tax by paying gift aid donations Reducing tax by buying an electric car so that first year allowance is claimed By not declaring a source of income and the actual income intentionally By utilizing a loophole in the tax system without violating the tax lawIn connection with the application of the kiddie tax, comment on the following: The child has only earned income. The child has a modest amount of unearned income. The child is age 20, is not a student, and is not disabled. The child is married. Effect of the parental election. The result is when the parental election is made and the married parents file separate returns. show answers with explanation
- Which of the following statements is NOT true? A) A progressive tax system should increase the incentive for people to take low paid jobs. B) With a progressive tax system, the more a person earns, the higher the average rate of tax will be. C) A progressive tax is a type of tax that is assessed regardless of income. D) A progressive tax takes a higher percentage of tax from people with higher incomes.If taxpayer receives a benefit but has no choice regarding its consumption – the manager of a lighthouse must live with his family in the lighthouse –should taxpayer be taxed on the value of the benefit? Why or why not?Which of the following tax credits can not be transferred to a spouse? The age credits The disability credit The EI and CPP benefits The pension income credits The claw back of OAS payments will not alter the individual’s net income for tax purposes (True/False)- _________ There is no limit on the amount of the tuition credit that can be transferred to a spouse (True/False)- ________ Adam, who is single supports his 80 years old blind mother who has no income and lives in a nursing home. Which of the following federal tax credit can be claimed for his mother? Disability tax credit only disability tax credit and Canada caregiver tax credit only disability tax credit and eligible tax credit only Canada caregiver credit only. Joe is self-employed. He might be eligible for all of the following Federal tax credits, except: CPP tax credit EI tax Credit Canada employment Tax Credit Canada workers benefit tax credit. Elsa is 73 years old. Her 2021 net income for tax…
- Serena operates a gift shop. To reduce costs of credit card transactions, she offers customers a discount if they pay in cash. For the holiday rush, she hires some short-term workers but pays them cash and does not add them to the payroll. a. What are some of the tax problems Serena might have? b. Assess Serenas chances of audit by the IRS.Ray loses his job as a result of a corporate downsizing. Consequently, he falls behind on the mortgage payments on his personal residence. His friend Ted would like to make the delinquent mortgage payments for him. a. Could the payments be structured so that Ray can deduct the mortgage interest? b. Could the payment arrangement deny both Ray and Ted a mortgage interest deduction? c. Could the payments be structured so that Ted can deduct the mortgage interest?