Question

True/False

Please explain answer

1. A taxpayer taking the standard deduction will have no adjustments when calculating the AMT.

2. Most taxpayers will not have AMT tax preference items

3. There is a wage cap on the HI portion but not on the OASDI portion of the self-employment tax.

4. The Additional Medicare Tax applies to both net earnings from self-employment and salary.

5. Income from separate property is always considered to be separate income.

6. One-half of the Additional Medicare Tax is deductible for AGI.

Answer 1

solution 1. have A tax payer taking the standard deduction will no adjustments when calculating the AMT. False Explanation of the standard deduction reduces tase amount but does not effect AMT. the 2. most tax payers will not have AMT tarse preference items. True Explornationi As the tas preference frems are for example exklusions for small business stock, interest on private activity bonds. So most tore payers does not have this. 3. on the There is OASDI a w age cap on the Hi postion but not postion of the self-employment taxe. Explanation & The wage cap is decided by Congress. There is a wage cap on the OASD I postion but not on the Hi portion of the selfnemployment taxe.

4) The additional Medicare tare applies to both net earnings from self-employment and salary. True Rate is 0.9% 5) Income from separate property considered to be separate income. is always Tove is Explanation : separate property means when the marriage ends. 6) One-half of the additional Medicare tax deductible for AGI. false, Explanation & It depends on the taxable income.