CORRECT WELL DETAILED ANSWERS|LATEST
CORRECT = 100
100
INCORRECT=0
STUDY MATERIALS.......DESIGNED TO HELP YOU SUCCEED
SPOTLIGHT 1
1
, CORRECT WELL DETAILED ANSWERS|LATEST
UPDATE!!!!!!2026|GUARANTEED PASS|GRADED
A combined due diligence penalty of $2,180 would indicate a penalty for which of the
following?
EIC, CTC/ODC/ACTC, and head of household.
EIC, AOTC, and CTC/ODC/ACTC.
EIC, AOTC, CTC/ODC/ACTC, and head of household.
EIC, PTC, CTC/ODC/ACTC, and head of household. - ANSWER EIC, AOTC,
CTC/ODC/ACTC, and head of household.
When dependent care benefits are withheld from a taxpayer's income, where are they
reported by the employer?
Form 2441.
Form 1040.
Box 10 of Form W-2.
The employer is not required to report them. - ANSWER Box 10 of Form W-2.
All of the following are due diligence requirements a tax preparer must meet for EIC, AOTC,
CTC/ODC/ACTC, and HOH, EXCEPT:
Investigate and verify the accuracy of information the taxpayer provides to show eligibility
for EIC, AOTC, CTC/ODC/ACTC, and HOH.
2
, Complete all worksheets used to compute the credits. If the worksheet is completed by
hand, keep a copy in the taxpayer's client file.
Maintain a copy of documents provided by the taxpayer that the tax preparer relied on
when determining credit eligibility. Then record the date the information was obtained and
the name of who provided the information.
When information provided by the taxpayer appears to be incorrect, inconsistent, or
incomplete, the tax preparer must make additional inquiries to determine if the taxpayer is
eligible for the benefit. Then document both the questions asked and responses provided. -
ANSWER Investigate and verify the accuracy of information the taxpayer provides to
show eligibility for EIC, AOTC, CTC/ODC/ACTC, and HOH.
When a taxpayer receives Form 1099-R with no amount entered in box 2a and code 7
entered in box 7, the entire distribution:
Could be partly or entirely taxable.
Is never taxable.
Is an early distribution and taxable.
Has been rolled into a traditional IRA or into another qualified plan. - ANSWER Is
never taxable.
What is the maximum amount of the American Opportunity Tax Credit a taxpayer could
receive per student?
$1,650
$1,800
$2,000
$2,500 - ANSWER $2,500
3
CORRECT = 100
100
INCORRECT=0
STUDY MATERIALS.......DESIGNED TO HELP YOU SUCCEED
SPOTLIGHT 1
1
, CORRECT WELL DETAILED ANSWERS|LATEST
UPDATE!!!!!!2026|GUARANTEED PASS|GRADED
A combined due diligence penalty of $2,180 would indicate a penalty for which of the
following?
EIC, CTC/ODC/ACTC, and head of household.
EIC, AOTC, and CTC/ODC/ACTC.
EIC, AOTC, CTC/ODC/ACTC, and head of household.
EIC, PTC, CTC/ODC/ACTC, and head of household. - ANSWER EIC, AOTC,
CTC/ODC/ACTC, and head of household.
When dependent care benefits are withheld from a taxpayer's income, where are they
reported by the employer?
Form 2441.
Form 1040.
Box 10 of Form W-2.
The employer is not required to report them. - ANSWER Box 10 of Form W-2.
All of the following are due diligence requirements a tax preparer must meet for EIC, AOTC,
CTC/ODC/ACTC, and HOH, EXCEPT:
Investigate and verify the accuracy of information the taxpayer provides to show eligibility
for EIC, AOTC, CTC/ODC/ACTC, and HOH.
2
, Complete all worksheets used to compute the credits. If the worksheet is completed by
hand, keep a copy in the taxpayer's client file.
Maintain a copy of documents provided by the taxpayer that the tax preparer relied on
when determining credit eligibility. Then record the date the information was obtained and
the name of who provided the information.
When information provided by the taxpayer appears to be incorrect, inconsistent, or
incomplete, the tax preparer must make additional inquiries to determine if the taxpayer is
eligible for the benefit. Then document both the questions asked and responses provided. -
ANSWER Investigate and verify the accuracy of information the taxpayer provides to
show eligibility for EIC, AOTC, CTC/ODC/ACTC, and HOH.
When a taxpayer receives Form 1099-R with no amount entered in box 2a and code 7
entered in box 7, the entire distribution:
Could be partly or entirely taxable.
Is never taxable.
Is an early distribution and taxable.
Has been rolled into a traditional IRA or into another qualified plan. - ANSWER Is
never taxable.
What is the maximum amount of the American Opportunity Tax Credit a taxpayer could
receive per student?
$1,650
$1,800
$2,000
$2,500 - ANSWER $2,500
3
