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California Tax Topic 5 - California Deductions and Credits
Tax School Home Page Student Instructions: Print this page, work on the questions and then submit test by mailing the answer sheet or by completing quiz online. Instructions to submit quiz online successfully: Step-by-Step check list Answer Sheet Quiz Online (Before you start online quiz, review the questions on this page and have your tax returns completed to be ready to answer the questions).
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You
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download the software for free.Complete a tax return: Use California 540A / 540 Booklet to complete this topic. Complete a tax return for Joseph Cuevas and Sara S. Cuevas (her SSN: 670-82-6160). Their Children who lived with them all year are:
Joseph was the only person who worked in the family. Complete a California Form 540A (you may also need IRS Form 1040A) using the following W-2. All information on W-2 is current.
1. Look at the Form 540A you prepared for Joseph and Sara Cuevas. What is the amount on Form 540A, Line 18?
A.
$3,516. 2. Look at the Form 540A you prepared for Jose and Sara Cuevas. What is the amount on Form 540A, Line 62?
A.
$-0-. Complete a tax return:Complete a tax return for Lawrence Escobedo (570-16-1970) and Theresa Escobedo (502-39-4055). They got married December 31, 2008. Their Children who lived with them all year are:
Only Lawrence worked. Theresa did not work. Theresa attended school full time for 7 months in 2008. The school was not an on-the-job training course, correspondence school, night, or internet school. When she was in school they were taken care of by Happy Child, inc.:
In addition to their earnings, they had the following:
Complete California Form 540A and Form FTB 3506 (you may also need IRS Form 1040A). Use the following attached W-2. All information on W-2 is current.
4. Look at the Form 540A you prepared for the Escobedo household. What is the amount on Form 540A, Line 43?
A. $700. 5. Look at the Form 540A you prepared for the Escobedo household. What is the amount on Form 540A, Line 66?
A. $2,450. 5. For California, if you had qualifying expenses for care that was provided in 2007 that you paid in 2008, you may be able to increase your credit for 2008. True False 6. You may qualify to claim the 2008 credit for child and dependent care expenses if you (and your spouse/RDP) paid someone in California to care for your child or other qualifying person while you worked or looked for employment. True False 7. Care must be provided in California for one or more qualifying persons. You paid for care so you (and your spouse/RDP) could work or look for work. If you did not find a job and have no earned income, you still qualify for the credit. True False 8. Enter each qualifying person's SSN. Verify that the name and SSN match the qualifying person's social security card to avoid the reduction or disallowance of your credit. True False 9. There are differences between California and federal laws regarding the Child Care and Dependent Care Expenses credit. For example, California allows this credit only for care provided in California. In addition, the California credit is a percentage of the federal credit as modified by the California law. Furthermore, with the California credit
A. Federal adjusted gross income must be $100,000 or less to qualify for
the California credit contrary to federal with no AGI limit. 10. Tom and Rose both worked full-time and claim Naomi, their daughter, as a dependent. They paid $500 per month to have Juanita take care of Naomi while they were at work. Juanita gets paid on the 1st and the 15th of each month and she has been taking care of Naomi for about 5 years now. Naomi turned 13 years old June 31, 2008. Child care payments were a total of $6,000 for all of 2008. What was the amount of child care payments that they are allowed to count as qualified child care for Naomi.
A. $6,000. 11. Jorge and Lucy Duran are married and keep up a home for their two pre-school children. In tax year 2008, they claimed their children as dependents. Jorge earned $15,200 and Lucy earned $5,100. They paid $2,000 for each child in work related child care expenses. What is their credit for California?
A. $-0- 12. What is the percentage of the federal Child and Dependent Expenses Care credit that is allowed for California for taxpayers who earned less than $40,000?
A. 42% 13. You received $2,000 cash under your employer's dependent care plan for 2008. The $2,000 is shown in box 10 of your Form W-2. You incurred $900 of qualified expenses in 2008 for care of your 3-year-old dependent child. Count as employer paid benefits...
A. $-0- 14. Dependent care benefits are
A. Amounts an employer paid directly to you or to your care provider for
the care of your qualifying person, while you worked. 15. If, in the same month, both you and your spouse/RDP qualified as either full-time students or disabled,
A. Both are treated as having earned income of $250 (0r $500 for two
children) ion the month. 16. Generally, if you are married or an RDP, you must file a joint return to claim the child and dependent care expenses credit, unless
A. You lived apart from your spouse/RDP at all times during the last six
months of 2008. 17. The following is a true statement for nonresidents and part-year residents.
A. Part-year and non-residents must complete Schedule CA(540) to claim
their credit. 18. You are the custodial parent if you had physical custody of your child longer than the other parent during the calendar year. On days where custody is shared, the parent who is considered to have custody for that day is the parent having custody for
A. 24 hours. Complete a tax return:Andy Brown (SSN 572-03-3300) lives with Samantha Garcia (SSN 578-58-8471) with whom he has three children. Andy and Samantha are not married. The children are:
Andy's Income:
Andy and Samantha agreed that she would take care of the kids and that Andy would support the family. Forms you need to complete tax return: California Form 540A (you may also need IRS Form 1040A). Get all their basic information from the following W2, including income information.
19. Look at the Form 540A you prepared for the Brown family. What is the amount on Form 540A, Line 11?
A.
$1,270. 20. Look at the Form 540A you prepared for Brown family. What is the amount on Form 540A, Line 66?
A.
$-0-. Complete a tax return:Complete Form 540 (you may also need Form 1040). Maria's family goes to school.
Maria is a not married. She provides a home for her son and daughter. She is the only one that can claim them. Maria provided for her family by herself. No one can claim her or her children as dependents. She paid rent all year for a of $9,600.00. Maria received a tax-free scholarship from Women for Education Inc. The amount she received was $3,000 towards her studies to get a nursing degree at the same community college her kids attend. All the money was for enrollment and attendance as specified by the school. Get all basic information from the following W2, including income information. Everything is current.
21. Look at the Form 540 you prepared for Maria Escobedo. What is the amount on Form 540, Line 20?
A. $696. 22. Look at the Form 540 you prepared for Maria Escobedo. What is the amount on Form 540, Line 66?
A. $181. 23. For California, if you received a distribution from a Coverall ESA, report the entire amount of the distribution on line 21f of Schedule CA (540). True False 24. California conforms to federal law regarding student loan interest deductions except for a spouse/RDP of a non-California domiciled military taxpayer residing in a community property state. True False 25. During 2008, you paid $800 interest on a qualified student loan. Your 2008 MAGI is $135,000 and you are filing a joint return. For California, your student loan interest adjustment is
A. $800. 26. During 2008, you paid $2,750 interest on a qualified student loan. Your 2008 MAGI is $135,000 and you are filing a joint return. For California, your student loan interest adjustment is
A. $832. Complete a tax return:Prepare a Form 540A and a for John Watson (you may also need IRS Form 1040A). Address information on W2 is current. Mr. Watson received Social Security benefits. Mr. Watson paid $ 6,000 rent for all of 2008. Mr. Watson's date of birth is April 6, 1941. Get all basic information from form, including income information.
27. Look at the Form 540A you prepared for John Watson. What is the amount on Form 540A, Line 14c?
A.
$ 11,600. 28. Look at the Form 540A you prepared for John Watson. What is the amount of refund or amount owed on Form 540A?
A.
refund $70. 29. For California, enter the amount of U.S. social security benefits or equivalent tier 1 railroad retirement benefits reported on federal Form 1040a, line 14b or Form 1040, line 20b because they are taxable for California. True False 30. For California, Tier 1 (non-social security equivalent) and Tier 2 railroad retirement benefits included in the amount on federal Form 1040a, line 12b or Form 1040, line 16b. True False
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