CAT Accounting Technician Taxation & Regulatory Compliance 2

Question 1

A self-employed consultant earned $85,000 in net profit. What is the deductible portion of self-employment tax when calculating adjusted gross income?

Accepted Answer

50% of SE tax paid

Answer

Self-employed individuals may deduct 50% of self-employment tax paid when calculating their adjusted gross income.

Question 2

Which depreciation method is NOT allowed under MACRS for most personal property placed in service after 1986?

Accepted Answer

Sum-of-the-years'-digits

Answer

MACRS does not include sum-of-the-years'-digits; it uses 200% DB, 150% DB, or straight-line methods.

Question 3

Under the passive activity loss rules, which taxpayer is generally allowed to deduct up to $25,000 of rental real estate losses against non-passive income?

Accepted Answer

Active participants with MAGI up to $100,000

Answer

The $25,000 rental real estate allowance phases out between $100,000 and $150,000 MAGI for active participants.

Question 4

A C corporation has taxable income of $400,000. What flat federal corporate income tax rate applies under post-TCJA law?

Accepted Answer

21%

Answer

The Tax Cuts and Jobs Act of 2017 established a flat 21% federal corporate income tax rate effective 2018.

Question 5

Which IRS form must an employer file to report wages paid and taxes withheld on a quarterly basis?

Accepted Answer

Form 941

Answer

Form 941, Employer's Quarterly Federal Tax Return, is used to report wages, tips, and withheld taxes each quarter.

(CAT) Certified Accounting Technician Practice Test

(CAT) Certified Accounting Technician Practice Test

CAT Accounting Technician Taxation & Regulatory Compliance 2