1. The income tax is generally withheld from wages for agricultural labor unless the employer

A. Paid in cash under $150 during the year.
B. Has expenditures for agricultural labor less than $ 2,500 during the year
C. Meets both A and B above.
D. None of the above.

2. If you are a domestic worker, you can ask your employer to withhold taxes on your income. A domestic worker is a worker who performs domestic work in a private home, a local organization of higher education academic, local fraternity or a chapter of a women's association. You will have

A. Tax withheld only if you want tax withheld and your employer agrees to do so.
B. Withheld taxes as any other worker.
C. Withhold taxes at a higher rate than any other worker.
D. Withhold tax only if you request your employer to make estimated tax payments.

3. Carlos Morales had a tax debt of $ 2,000 in 2011. In 2012, Carlos anticipates to owe at least $ 1,500 in federal taxes. For 2012, he has no tax withheld. Carlos does not need to make an estimated tax return because his taxes in 2012 is less than his tax in 2011.

True False

4. What statement regarding estimated payments is not correct?

A. An individual, who's only income is self employment income, has to pay estimated tax payments.
B. If not paid enough tax through withholding, estimated tax payments may be required.
C. Estimated tax payments are required when withholding is greater than the total debt.
D. Tax payments are used to pay not only income taxes but also taxes on self-employment tax and alternative minimum tax.

5. Not required to pay estimated tax if you pay enough tax through withholding to keep the amount to be paid less than $ 1,000.

True False

6. Petra did not pay estimated tax payments for 2011 because she thought she had enough taxes withheld by deduction from her salary. In January 2012, she realized that her withholding was $2,000 less than the minimum amount to avoid a tax penalty because her payment was insufficient. Therefore she made estimated tax payment of $2,500 on 10 January. Petra filed her tax return for the 2011 on March 1, 2012, which resulted in a refund of $ 100. Which of the following statements is NOT considered true regarding estimated tax penalties?

A. Petra did not owe a penalty for the period ending December 31, 2011, because she paid enough before January 15, 2012.
B. Petra did not owe a fine in any period because the total payments exceed her tax bill.
C. Petra may owe a penalty for one or all 3 periods even though she is getting a refund for the year.
D. If Petra owes a fine for any period, the underpayment of tax is calculated from the date the amount should have been paid to the date the payment was made.

7. If the taxpayer filed his income tax return using Form 1040 for January 31, 2012 and pays the balance owed on the return, he will not receive a penalty for the fourth quarter that was to be paid by January 15 2012.

True False

8. A taxpayer had adjusted gross income of $98,000 and a tax debt for 2010 of $20,000. In 2011, the taxpayer had a tax debt of $25,000. The withholding tax was increased to $ 23,500. The taxpayer will file his 2011 tax return for the April 10, 2012. To avoid penalty for underpayment, the taxpayer must of ...

A. Pay the additional $ 1,500 that is due to April 15, 2012.
B. Pay an additional $ 1,500 by January 15, 2012.
C. Make an annual calculation of estimated tax payments.
D. Do nothing, since he has satisfied the minimum requirements for payment of taxes.

9. If the taxpayer filed his income tax return using Form 1040 or 1040A to January 31, 2012, and pays his balance owed on the tax return, he will not receive a fine for the fourth period to be paid on January 15 2012.

True False

10. Susana must make estimated payments on taxes of $4,000 for the tax year. She made the following payments:

1st payment - Credit of $1,000 on her return from the previous year.

2nd payment - $500 on April 20.

3rd payment - $500 on May 31.

4th payment - $ 1,000 on 15 August.

5th payment - $ 500 on October 15.

6th payment - $ 500 on December 30.

A. She did not make her payments on time because her second and third payments are not made by April 15.
B. She did not make her payments on time because her she did not make her fourth payment by June 15.
C. She made the estimated payments on time.
D. She did not make any payments on time because none of the payments made by the time frame required by the Internal Revenue Service (IRS).

11. Dr. Stephen and Justina are married and have a total income of $190,000, personal allowances for list of expenses of $15,000, and exemptions of $5,800, leaving them with an estimated taxable income of $169,200. For 2011, the tax on $169,200 is $43,960 for the tax year. In 2010, they paid a total of $42,000 on their taxable gross income of $185,000. For tax year 2011, they need to do:

A. No estimated tax payment being that they have tax withholding.
B. Estimated payments of $ 2,604.
C. Estimated payments of $ 8,652.  
D. Estimated payments of $ 5,040.
 

12. A taxpayer is taxed in the prior year a total of $ 21,000. This year, the taxpayer received a bonus and his tax increased $4,500. The taxpayer had a long-term capital of $4000 with a resulting tax of $800. The taxpayer's withholding increased to $23,700. To avoid a penalty for insufficient estimated tax payments, the taxpayer must:

A. Do anything, being that the withholding tax exceeds 100% of last year.
B. Pay an additional amount of $ 5,300 to equal 100% of the tax that should be paid.
C. Do nothing, being that the withholding exceeds 90% of tax due this year.
D. Both A and C above

13. Lorena expects to owe $ 1,500 in taxes in 2011. Her tax debt for 2010 was $0. Lorena is not required to pay estimated tax payments for 2011.

True False

14. Margaret Meraz sold her investment property on March 30 with a gain of $50,000. Margarita expects to owe $10,000 in additional taxes for this sale. She was forced to pay $900 tax in the year 2010 and has no withholding in 2011. The estimated initial payment that Margarita should make by what date?

A. April 30, 2011.
B. April 15, 2011.
C. January 31, 2012. 
D. June 15, 2011.

15. Susan Olivarez, a single taxpayer, expects her adjusted gross income for 2011 will be $ 75,000 and her tax $15,850. Her withholding will be $14,000 and she did not anticipate having any credits. The tax in prior tax year was $ 15,000. Susan does not need to make estimated tax payments.

True False

16. You and your spouse can make joint estimated tax payments even if you don't live together. You and your spouse can make estimated tax payments if

A. Are legally separated by a decree of divorce or separate maintenance.
B. Both you and your spouse use different tax years.
C. One of you is a nonresident foreigner and chooses to be treated as a resident alien for tax purposes.
D. Any of the above.

17. You don't have to pay estimated tax until you receive income on which you have to pay this tax.

True False

18. The following is not one of the ways to pay estimated tax

A. Credit an excess payment from 2011 to your 2012 estimated tax.
B. Pay by electronic means using the electronic federal tax payments.
C. Use your credit or debit card in accordance with a system of payments by phone or internet.
D. None of the above.

19. If you did not receive your Form W-2 on time, you should ask your employer for it. If you have not received by February 15,

A. Call the IRS.
B. Report your gains without the Form W-2.
C. Report your earnings as an independent worker.
D. You do not have to report that part of your earnings.

20. You may have withheld too much tax from social security or tier 1 railroad retirement from your salaries or wages, if you worked for two or more employers in 2011, and received more than

A. $96,800 in wages.
B. $196,800 in wages.
C. $106,800 in wages.
D. $44,800 in wages.