1. B

Only children under age 17 qualify for the child tax credit. If the three children enrolled in post-secondary education meet all of the qualifications, they could each qualify for the American Opportunity Credit. The family qualifies for the Lifetime Learning credit. Up to $6,000 can be taken as a credit in a tax year for dependent care for two or more dependents.

2. D

The annual dividend is $99,000 (22,000 x $4.50). If they buy additional shares in the stock, the dividend paid will be higher, thus increasing their taxable income. All of the other options will reduce their taxable income. The business will receive an employee wage tax deduction, and reduce the corporate taxable income if the grandchildren are compensated for their time helping out at the business.

3. A

The goal here is to postpone income and gains to future years and take higher deductions in the current year. The only answer that achieves this answer A, by paying for next year's renewals in the current year.


Introduction

Related Articles
  1. Taxes

    Tax Credits And Deductions For Parents

    Your children can help you save on your taxes with these credits and deductions.
  2. Taxes

    How To Get The Most Money Back On Your Tax Return

    Many people pay more taxes than they have to simply because they don’t know better. Here are a few suggestions for getting the most out of your tax return.
  3. Taxes

    Top Tax Deductions Not to Overlook

    If you want to pay as little as possible in taxes, it's important to learn about all the different credits and deductions available. Here's a primer.
  4. Taxes

    Explaining Taxable Income

    Taxable income is the net of gross income and allowable deductions.
  5. Personal Finance

    Are You Taking Advantage of the College Tuition Tax Credit?

    Parents with a child enrolled in college should check out the college tuition tax credit, a boon that can help defray the cost of a university education.
  6. Taxes

    Top 5 Ways to Reduce Your Taxable Income

    Reducing your taxable income is a great way to save money on the taxes you owe. Here are five ways to do it.
  7. Taxes

    Strategies for Protecting Your Income from Taxes

    Taxes are difficult to avoid, but there are many strategies you can find to help ward them off a bit. Here are a handful of ways to protect your income.
  8. Retirement

    Top Tax Tips For Retirees

    Filing your taxes during retirement can be just as time consuming as when you were employed. We have some tips to help you out.
  9. Taxes

    How To Get The Most Money Back On Your Tax Return

    These tips will help you get a larger refund this year, while teaching you how to pay less taxes going forward.
  10. Taxes

    Income Tax Brackets for 2015-2016

    Learn about the 2015-2016 tax brackets, how to calculate your marginal tax rate, the five types of filing status and how to qualify for them.
Frequently Asked Questions
  1. What is the difference between yield and return?

    While both terms are often used to describe the performance of an investment, yield and return are not one and the same ...
  2. What are the Differences Among a Real Estate Agent, a broker and a Realtor?

    Learn how agents, realtors, and brokers are often considered the same, but in reality, these real estate positions have different ...
  3. What is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ...
  4. Which is better, a fixed or variable rate loan?

    A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest ...
Trading Center