Question
Trey has two dependents, his daughters, ages 14 and 18, at year-end. Trey files a joint return with his wife. What amount of child tax
Trey has two dependents, his daughters, ages 14 and 18, at year-end. Trey files a joint return with his wife. What amount of child tax credit (either as a child or a qualifying dependent) will Trey be able to claim in 2021 for his daughters under each of the following alternative situations? Use Exhibit 8-8.
EXHIBIT 8-8 Child Tax Credit Phase-Out Threshold
| Filing Status | Phase-Out Threshold |
|---|---|
| Married filing jointly | $400,000 |
| Married filing separately | 200,000 |
| Head of household and single | 200,000 |
b. His AGI is $420,000. What is the Amount of child tax credit?
Julie paid a day care center to watch her two-year-old son while she worked as a computer programmer for a local start-up company. What amount of child and dependent care credit can Julie claim in 2021 in each of the following alternative scenarios? Use Exhibit 8-10
EXHIBIT 8-10 Child and Dependent Care Credit Percentage
| If AGI is over | But not over | Then the percentage is |
|---|---|---|
| $ 0 | $125,000 | 50% |
| 125,000 | 127,000 | 49 |
| 127,000 | 129,000 | 48 |
| 129,000 | 131,000 | 47 |
| 181,000 | 183,000 | 21 |
| 183,000 | 400,000 | 20 |
| 400,000 | 402,000 | 19 |
| 402,000 | 404,000 | 18 |
| 434,000 | 436,000 | 2 |
| 436,000 | 438,000 | 1 |
| 438,000 | 0 |
Source: Source: Internal Revenue Code. " 21. Expenses For Household And Dependent Care Services Necessary For Gainful Employment."
a. Julie paid $2,000 to the day care center and her AGI is $50,000 (all salary). What is the Child and dependent care credit?
b. Julie paid $10,000 to the day care center and her AGI is $50,000 (all salary). What is the Child and dependent care credit?
c. Julie paid $4,000 to the day care center and her AGI is $127,000 (all salary). What is the Child and dependent care credit?
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Financial And Managerial Accounting
Authors: John J Wild
6th Edition
1259621758, 978-1259621758
