Question

HOMEWORK 1: Answer the questions for each of the following situations. Explain cach answer. 1. In 2018 Hugh and Helen adopted an eligible child. This child is a U.S. citizen. In 2017, they paid qualified adoption expenses of $2,000 (not claimed in 2017). In 2018, they paid qualified adoption expenses of $3,500 and their modified AGI was $75,000. The adoption was final in 2018. a. How much is their adoption credit in 2017? b. How much is their adoption credit in 2018? 2. Mary Jane and Riley send their 9-year-old daughter to childcare so Riley and Mary Jane can work and also look for work. In 2018, Riley's taxable carned income was $23,660 and Mary Jane's was $2,100. They had no other income. Their childcare expenses were $2,450. a. What is the amount of their work-related expenses eligible for the child and dependent care credit? b. What percentage of the eligible expenses can they take as the credit? 3. Mike and Maureen have a son Ted (born 12/12/2001), a son Richard (born 4/8/2007), a daughter Melissa (born 7/12/2002) and a daughter Laurie (born 2/14/2009). Their nephew Gordy (born 8/11/2008) also lived with them all year. They support Gordy and claim him as a dependent on their tax return. Mike and Maureen's modified adjusted gross income in 2018 was $56,460. Their 2018 income tax on Form 1040, line 11 was $1,643 a. Which children are qualifying children for the child tax credit? b. What is the amount of child tax credit Mike and Maureen will enter on Form 1040, line 12? 4. Brad is divorced. His two children live with him. His daughter Sadie was born in 2002 and his son Noah was born in 2008. Brad has signed a written agreement allowing his former wife to claim Noah as a dependent. Noah goes to childcare after school so Brad can work at his job as a plumber. His earned income and AGI are both $46,379. a. Which credits is Brad eligible to claim? And for whom? b. What is his former wife eligible to claim? 5. What three conditions must be met for a person to qualify a taxpayer for the Other Dependent Credit? How much is this credit? Is it refundable or nonrefundable?

Answer 1

Home work I a) The amount of adoption credited in 2017 is $2000, But it is not claimed in 2017. So it can be carry foreward to next year. ie 2018 For 2017, the maximum adoption tax credit was $13570 per child] 6) The amocent of adoption credited in 2018 is $5500 ie. Current year expense previous year expense $2000 + $ 3500 = $5500 (2017) (2018) for 2018, the maximiem adoption tax credit was $13810 per child CON a) If you paid a day care center, babysitter, stemmer camp or other care provider to care for a qualifying child under age 13 or a disabled dependent of any age. You may qualify for toce Crede ..percentage of tax credit = 35% qualifying exp=maxinum $3000 Annocent = 2450 * 35% 1 6 35% of eligible expences they can take as the credit.

a) The child must be your own child, a stepchild of a forster child placed with you by a court or authorized agency, you can also claim your brother sister, step brother, step sistor, nieces, nephew and grand children. 6) Line 12a. is from the 2018 Child Tox credit and Credit for other dependents worksheet in the 1040 instructions. The maximum amount you can claim for the credit is $2000 for each child who qualifies you for the child Tax Credit. Đ. a) Brad is eligible for claim his daughtes Sadie "Child tax credit". O Brad has signed a written agreement allowing his former wife to claim Noah as a dependent Noah goes to childcare. The former wife is eligible to claim cependent care credit for her son Nzah.

Summary

Calculation of adoption credit ,child tax credit and dependent care credit.