ABA Taxation and Compliance 2

Question 1

A sole proprietor earned $95,000 in net self-employment income. What is the deductible portion of self-employment tax on their Form 1040?

Accepted Answer

One-half of the calculated self-employment tax

Answer

Self-employed individuals may deduct one-half of their self-employment tax as an above-the-line deduction on Form 1040.

Question 2

Which IRS form is used by partnerships to report income, deductions, and credits to the IRS?

Accepted Answer

Form 1065

Answer

Form 1065 (U.S. Return of Partnership Income) is the annual information return filed by partnerships.

Question 3

Under the TCJA, the maximum Section 179 deduction for qualifying business property placed in service in 2023 is approximately:

Accepted Answer

$1,160,000

Answer

The Section 179 deduction limit was $1,160,000 for tax year 2023, indexed annually for inflation.

Question 4

A calendar-year C corporation's federal income tax return (Form 1120) is due:

Accepted Answer

April 15, with an extension to October 15

Answer

C corporation Form 1120 is due the 15th day of the 4th month after year-end (April 15) with a 6-month extension to October 15.

Question 5

Which of the following is an example of a regressive tax?

Accepted Answer

A flat sales tax on groceries

Answer

A flat sales tax is regressive because lower-income individuals spend a higher percentage of their income on taxable goods.

(ABA) Accredited Business Accountant Practice Test