1. Max and Alexandra are married and incur $5,500 of qualifying expenses to care

Question

1. Max and Alexandra are married and incur $5,500 of qualifying expenses to care for their two

children, ages 2 and 5. Max's earned income is $35,000 and Alexandra's earnings from a parttime job are $5,000. What is the amount of the qualifying expenses for purposes of computing the

child and dependent care credit?

2.Which of the following statements is not correct regarding residential energy property?

A) Nonbusiness energy property credit is available in 2013.

B) Nonbusiness energy property credit is limited to $500

C) Qualified energy efficiency improvements include insulation materials or metal or asphalt

roofs with special coatings.

D) Residential energy efficient property credit is 15% of the cost of eligible property and limited

to $500.

3.If an individual is liable for self-employment tax, a portion of the self-employment tax is

A) a for AGI deduction.

B) from AGI as an itemized deduction.

C) a Schedule C business expense.

D) self-employment tax is nondeductible

Explanation / Answer

1. $5,000. Although the limit for two qualifying children is the lesser of $6,000 or the actual expenses, the earned income limitation may apply. The amount of qualifying expenses can not exceed the earned income of the spouse with the lesser earned income, in this case, $5,000.

2. D) Residential energy efficient property credit is 15% of the cost of eligible property and limited to $500.

3. A) a for AGI deduction

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