federal income tax question

Question 4 of 12. Jane is a full-time student who anticipates receiving a $2,500 American Opportunity Tax Credit in 2019. Not looking for a huge tax refund, how should Jane treat the credit when completing her 2020 Form W-4? O Jane should add an estimate of the expected annual credit amount in Step 3 of her 2020 Form W-4. This will decrease the amount of her withholding per pay period and reduce the amount of any tax refund that would be received when the retum is filed Jane is a full-time student. Full-time students are automatically exempt from federal income tax withholding. No entry related to the amount of the credit is necessary on the 2020 Form W-4. She should complete Steps 1 and 5, and write "exempt beneath line 4c The American Opportunity Tax Credit is not taken into account in determining withholding. The only credits considered for this purpose are the Child Tax Credit and the Credit for Other Dependents. These credits would be included in Step 3 of the 2020 Form W-4 O Jane should use Step 4. Other Adjustments, on the 2020 Form W-4 and enter the credit as a negative amount on line 4a, Other income not from jobs. Reducing her taxable income in this way will be virtually the same as applying the credit to her taxable income Mark for follow up Back Save / Return Later Summary Next >> Mark for follow up Question 12 of 12 Most tax planning suggestions are given during the preparation of a prior-year return. The suggestions enable taxpayers to plan for the future but do not affect the outcome of the return currently being filed. Which process CAN reduce tax liability on the prior-year return that is being prepared as the advice is given? Completing Step 4 (optional), Other Adjustments on the 2020 Form W-4. Employee's Withholding Certificate. Purchasing savings bonds Completing a Form 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts. Contributing to a Coverdell Education Savings Account Mark for follow up Back Save / Return Later Summary Mark for follow up Question 6 of 12 Which of the following education expenses are NOT qualified expenses for the education savings bond program? O Contributions to a qualified tuition program or to a Coverdell Education Savings Account. Tuition and fees required to attend an eligible educational institution for the taxpayer or spouse. Tuition and fees required to attend an eligible educational institution for a dependent. Room and board needed to attend an eligible educational institution Mark for follow up Back Save / Return Later Summary Next >> Mark for follow up Question 3 of 12 Which statement is TRUE regarding the redesigned 2020 Form W.4, Employee's Withholding Certificate? The Tax Cuts and Jobs Act of 2017 eliminated personal and dependency exemptions. As a result, the 2020 Form W4 does not refer to withholding allowances. The Tax Cuts and Jobs Act of 2017 eliminated personal and dependency exemptions. As a result, a standard deduction amount is multiplied by the number of individuals (taxpayer, spouse, and any dependents) claimed on an income tax return On the 2020 Form W-4, a means of indicating the taxpayer is exempt from withholding is recorded in Step 1. Enter Personal Information The amount of tax a taxpayer expects to owe for the year after subtracting expected amounts withheld and certain refundable credits, is reported on the 2020 Form W-4, Step 4c, Extra Withholding Mark for follow up Back Save / Return Later Summary Next >> Question 4 of 12. Jane is a full-time student who anticipates receiving a $2,500 American Opportunity Tax Credit in 2019. Not looking for a huge tax refund, how should Jane treat the credit when completing her 2020 Form W-4? O Jane should add an estimate of the expected annual credit amount in Step 3 of her 2020 Form W-4. This will decrease the amount of her withholding per pay period and reduce the amount of any tax refund that would be received when the retum is filed Jane is a full-time student. Full-time students are automatically exempt from federal income tax withholding. No entry related to the amount of the credit is necessary on the 2020 Form W-4. She should complete Steps 1 and 5, and write "exempt beneath line 4c The American Opportunity Tax Credit is not taken into account in determining withholding. The only credits considered for this purpose are the Child Tax Credit and the Credit for Other Dependents. These credits would be included in Step 3 of the 2020 Form W-4 O Jane should use Step 4. Other Adjustments, on the 2020 Form W-4 and enter the credit as a negative amount on line 4a, Other income not from jobs. Reducing her taxable income in this way will be virtually the same as applying the credit to her taxable income Mark for follow up Back Save / Return Later Summary Next >> Mark for follow up Question 12 of 12 Most tax planning suggestions are given during the preparation of a prior-year return. The suggestions enable taxpayers to plan for the future but do not affect the outcome of the return currently being filed. Which process CAN reduce tax liability on the prior-year return that is being prepared as the advice is given? Completing Step 4 (optional), Other Adjustments on the 2020 Form W-4. Employee's Withholding Certificate. Purchasing savings bonds Completing a Form 2210 Underpayment of Estimated Tax by Individuals, Estates, and Trusts. Contributing to a Coverdell Education Savings Account Mark for follow up Back Save / Return Later Summary Mark for follow up Question 6 of 12 Which of the following education expenses are NOT qualified expenses for the education savings bond program? O Contributions to a qualified tuition program or to a Coverdell Education Savings Account. Tuition and fees required to attend an eligible educational institution for the taxpayer or spouse. Tuition and fees required to attend an eligible educational institution for a dependent. Room and board needed to attend an eligible educational institution Mark for follow up Back Save / Return Later Summary Next >> Mark for follow up Question 3 of 12 Which statement is TRUE regarding the redesigned 2020 Form W.4, Employee's Withholding Certificate? The Tax Cuts and Jobs Act of 2017 eliminated personal and dependency exemptions. As a result, the 2020 Form W4 does not refer to withholding allowances. The Tax Cuts and Jobs Act of 2017 eliminated personal and dependency exemptions. As a result, a standard deduction amount is multiplied by the number of individuals (taxpayer, spouse, and any dependents) claimed on an income tax return On the 2020 Form W-4, a means of indicating the taxpayer is exempt from withholding is recorded in Step 1. Enter Personal Information The amount of tax a taxpayer expects to owe for the year after subtracting expected amounts withheld and certain refundable credits, is reported on the 2020 Form W-4, Step 4c, Extra Withholding Mark for follow up Back Save / Return Later Summary Next >>