Question

QUESTION 49

1. Carly has two children under 13 and worked full time while her spouse, Michael, was attending college for 9 months during the year. Carly incurred $7,000 of child care expenses. In calculating the credit for child care expenses, the applicable percentage would be multiplied by which of the following amounts?

   	a.	$6,000
   	b.	$7,000
   	c.	$4,500
   	d.	$3,000

QUESTION 50

1. John incurred the following expenses during 2019: $1,000 dues at a health club he joined at the suggestion of his physician to improve his general physical condition, $250 for multiple vitamins, $300 for nonprescription nicotine gum, $500 for insulin, $1,000 for prescription drugs and $3,000 for doctor's bills.  Ignoring the AGI limitation, what is John's maximum allowable medical expense deduction?

   	a.	$4,500
   	b.	$4,000
   	c.	$4,750
   	d.	$5,500

Answer 1

Question 1: (49 per screen)

The correct answer is Option A - $6,000. Per IRS, an individual would be eligible to claim for the child and dependent care credit if he/she pays for the expenses of the care of the qualifying child if the child is less than 13 years when the care was provided. To be eligible for the credit, the parents of the child should be actively working or looking out for work. The work requirement is waived off if one of the parent is full time student. The credit per qualifying child is limited to $3,000. Since Carly has two children who are qualifying , the determined percentage of the credit(determined based on AGI) would be multiplied by $6,000 ($3,000 per child * 2).

Option B is incorrect. Even though Carly spends $7,000 on child care expenses, the eligible amount to be calculated would be based on $6,000 ($3,000 per child is the maximum)

Option C is incorrect. $4,500 is incorrect based on the above explanation.

Option D is incorrect. $3,000 is the eligible amount of expenses that Carly can claim per qualifying child. Since Carly has two qualifying child , the total amount of eligible expenses would be multiplied by $6,000

Kindly request you to post the remaining question separately so that we can answer that as well. All the best and please do let me know if you have any questions via comments:)