Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Chapter 5, Problem 1MCQ
To determine
Concept Introduction:
Gross income is the starting point for calculating a taxpayer’s liability. It includes all the income from any sources unless there is an exception in the law. In gross income, non-cash items are included at the fair market value. These incomes are excluded from
To explain: The false statement about health saving account
Expert Solution & Answer
Answer to Problem 1MCQ
The answer is option “B”
Explanation of Solution
Under the health savings account, the contribution to HSAs is the deduction for AGI or limited to a certain amount depending on whether high deductible insurance covers an individual or family. Earnings and unused contributions accumulated in HASs are not taxed, and distributions to cover medical expenses are also not taxed. As per the law, contribution to HSAs must generally be made by April 15 of the year following the year for which the contribution is made. And distributions that are not used to pay for qualified medical expenses are subject to both income tax and a 20% penalty.
The out-of-pocket limit under the affordable care act is generally higher than the IRS limits determine tax compliance for HAS. Therefore, option B is false that HSAs are available to any taxpayer using a health plan purchased under the affordable care act.
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Students have asked these similar questions
Which one of the following statements about the premium tax credit is FALSE?
Select the correct answer.
O A. Consumers who are eligible for and receive advance payments of the premium tax credit don't have to file federal income taxes at the end of the coverage year.
O B.
Consumers may choose to purchase a qualified health plan through a Marketplace without advance payments of the premium tax credit and then wait to apply for the premium
tax credit when they file their federal income tax returns.
O C. Consumers should be made aware of price differences between qualified health plans and how their eligibility for advance payments of the premium tax credit will help lower
their monthly premium costs.
OD. If consumers who are eligible for a premium tax credit choose to take some or all of it in advance, the advance payment will be sent directly to the health insurance company
that operates their chosen qualified health plan.
In 2021, the shared responsibility payment:
Applies to uninsured taxpayers whose modified adjusted gross income exceeds the threshold amount for their age and filing status.
May reduce the amount of the Premium Tax Credit.
Applies only to nonresident aliens who received health insurance through the Marketplace.
Does not apply.
Which of the following is true about the self-employed health insurance deduction?
a.The deduction can be claimed when a subsidized employer health insurance plan is also available.
b.Long-term care premiums may not be deducted within specified dollar limitations based on age.
c.Dental insurance is not included as deductible self-employed health insurance.
d.The deduction can be claimed if the taxpayer has an overall business loss from self-employment.
e.The self-employed health insurance deduction is a for AGI deduction.
Chapter 5 Solutions
Income Tax Fundamentals 2020
Ch. 5 - Prob. 1MCQCh. 5 - Prob. 2MCQCh. 5 - Prob. 3MCQCh. 5 - Which of the following is true about the...Ch. 5 - Lyndon, age24, has a nonworking spouse and earns...Ch. 5 - Prob. 6MCQCh. 5 - Prob. 7MCQCh. 5 - Prob. 8MCQCh. 5 - Prob. 9MCQCh. 5 - Prob. 10MCQ
Ch. 5 - Prob. 11MCQCh. 5 - Prob. 12MCQCh. 5 - Prob. 13MCQCh. 5 - Prob. 14MCQCh. 5 - Eliza is a kindergarten teacher for Alexander...Ch. 5 - Prob. 16MCQCh. 5 - Prob. 17MCQCh. 5 - Prob. 18MCQCh. 5 - Prob. 19MCQCh. 5 - Prob. 20MCQCh. 5 - Prob. 21MCQCh. 5 - Prob. 22MCQCh. 5 - Prob. 23MCQCh. 5 - Prob. 24MCQCh. 5 - Prob. 25MCQCh. 5 - Prob. 26MCQCh. 5 - Prob. 27MCQCh. 5 - Prob. 28MCQCh. 5 - Prob. 29MCQCh. 5 - Prob. 30MCQCh. 5 - Which of the following would typically be...Ch. 5 - Which of the following is not a possible...Ch. 5 - Prob. 33MCQCh. 5 - Prob. 34MCQCh. 5 - Evan participates in an HSA carrying family...Ch. 5 - Prob. 2PCh. 5 - Karen, 28 years old and a single taxpayer, has a...Ch. 5 - Phil and Linda are 25 -year-old newlyweds and file...Ch. 5 - Prob. 5PCh. 5 - Prob. 6PCh. 5 - Prob. 7PCh. 5 - Bob is a single, 40 -year-old doctor earning...Ch. 5 - Prob. 9PCh. 5 - During 2019 , Jerry is a self-employed therapist,...Ch. 5 - Prob. 11PCh. 5 - Prob. 12PCh. 5 - Prob. 13PCh. 5 - Prob. 14PCh. 5 - Janet needs an elevator seat attached to her...Ch. 5 - Lyndon's employer withheld $10,100 in state income...Ch. 5 - Mike sells his home to Jane on April 2,2019 . Jane...Ch. 5 - Prob. 20PCh. 5 - Prob. 21PCh. 5 - Prob. 22PCh. 5 - Ken paid the following amounts for interest during...Ch. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - At the end of 2019, Mark owes $250,000 on the...Ch. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - On January 3,2019, Carey discovers his diamond...Ch. 5 - Prob. 32PCh. 5 - Prob. 33P
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