H&R BLOCK TAX PREPARER REVIEW
2026 QUESTIONS WITH SOLUTIONS
TESTED QUESTIONS.
■ Failure-to-File Penalty. Answer: Generally 5% for each month or
part of a month the return is late, but not more than 25% of the tax not
paid.
■ Failure to File. Answer: Taxpayer fails to file the return by the due
date, and there is a balance due.
■ Form 1040X. Answer: Amended U.S. Individual Income Tax
Return
■ When can an amended return be filed?. Answer: Within three years
of the date the original return was filed, or within two years of the
date the tax was paid, whichever is later.
■ Can the 1040X be e-filed?. Answer: No.
■ Portfolio Income and Losses. Answer: Those from such sources as
dividends, interest, capital gains and losses, and royalties.
■ Schedule E. Answer: Supplemental Income and Loss
,■ Royalty. Answer: Payments received for the right to extract natural
resources from the taxpayer's property or to use a taxpayer's literary,
musical, or artistic creation.
■ Annuity. Answer: A series of payments under a contract made at
regular intervals over a period of more than one year.
■ Beneficiary. Answer: The owner or recipient of funds in an account,
such as an IRA, or from an insurance policy or will.
■ Contribution. Answer: When a person puts money into a retirement
plan.
■ Defined Benefit Plan. Answer: An employee benefit plan that
provides determinable benefits not based on employer profits.
■ Defined Contribution Plan. Answer: An employee benefit plan that
provides a separate account for each person covered and pays benefits
based on account earnings.
■ Disability Pension. Answer: A taxable pension from an employer-
funded disability plan or a disability provision of a retirement plan.
■ Distribution. Answer: When a person takes or receives money from
a retirement plan.
■ Pension. Answer: Generally a series of definitely determinable
payments made to a taxpayer after retirement from work.
,■ Rollover. Answer: A qualified transfer of funds from one tax-
favored account to another, usually of the same type.
■ Roth IRA. Answer: A type of individual retirement arrangement in
which contributions are not tax deductible, earnings grow tax
deferred, and qualified withdrawals are tax free.
■ Traditional IRA. Answer: An individual retirement arrangement,
contributions to which may or may not be deductible depending on
the taxpayer's AGI and whether or not he is covered under an
employer-sponsored retirement plan.
■ What is the full retirement age?. Answer: For workers born before
1938, it is 65. For those born after it is gradually being increased to
67.
■ How much of a client's social security and equivalent tier 1 RR
benefits may be taxable?. Answer: Up to 85%.
■ Form SSA-1099. Answer: Social Security Benefits
■ Form RRB-1099. Answer: Railroad Retirement Benefits
■ None of Social Security Benefits Taxable. Answer: Single, Head of
Household, Qualified Widow - $0-$25,000; Married Filing Jointly -
$0-$32,000
, ■ Up to 50% of Social Security Benefits Taxable. Answer: Single,
Head of Household, Qualified Widow - $25,001-$34,000; Married
Filing Jointly - $32,001-$44,000
■ Up to 85% of Social Security Benefits Taxable. Answer: Single,
Head of Household, Qualified Widow - $34,001+; Married Filing
Jointly - $44,001+; Married Filing Single - $1+
■ Fully Taxable Pension. Answer: Pensions to which the taxpayer did
not make after-tax contributions or from which all pre-tax amounts
have been recovered in previous years.
■ Partly Taxable Pensions. Answer: Those pensions funded through
employer plans to which the employee contributed some after-tax
money.
■ Form 1099-R. Answer: Distributions from Pensions, Annuities,
Retirement, or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc.
■ Exceptions to the Early Withdrawal Penalty. Answer: 01 - The
distribution was made to an employee who separated from service
during or after the year in which they reached age 55.
02 - The distribution is part of a series of substantially equal periodic
payments, made at least annually for the life of the participant or the
life expenctancy of the participant.
03 - The distribution was made due to permanent and total disability.
04 - The distribution was made due to the death of the employee.
05 - The distribution was made in a year that the taxpayer's medical
expenses exceeds 7.5% of AGI.
2026 QUESTIONS WITH SOLUTIONS
TESTED QUESTIONS.
■ Failure-to-File Penalty. Answer: Generally 5% for each month or
part of a month the return is late, but not more than 25% of the tax not
paid.
■ Failure to File. Answer: Taxpayer fails to file the return by the due
date, and there is a balance due.
■ Form 1040X. Answer: Amended U.S. Individual Income Tax
Return
■ When can an amended return be filed?. Answer: Within three years
of the date the original return was filed, or within two years of the
date the tax was paid, whichever is later.
■ Can the 1040X be e-filed?. Answer: No.
■ Portfolio Income and Losses. Answer: Those from such sources as
dividends, interest, capital gains and losses, and royalties.
■ Schedule E. Answer: Supplemental Income and Loss
,■ Royalty. Answer: Payments received for the right to extract natural
resources from the taxpayer's property or to use a taxpayer's literary,
musical, or artistic creation.
■ Annuity. Answer: A series of payments under a contract made at
regular intervals over a period of more than one year.
■ Beneficiary. Answer: The owner or recipient of funds in an account,
such as an IRA, or from an insurance policy or will.
■ Contribution. Answer: When a person puts money into a retirement
plan.
■ Defined Benefit Plan. Answer: An employee benefit plan that
provides determinable benefits not based on employer profits.
■ Defined Contribution Plan. Answer: An employee benefit plan that
provides a separate account for each person covered and pays benefits
based on account earnings.
■ Disability Pension. Answer: A taxable pension from an employer-
funded disability plan or a disability provision of a retirement plan.
■ Distribution. Answer: When a person takes or receives money from
a retirement plan.
■ Pension. Answer: Generally a series of definitely determinable
payments made to a taxpayer after retirement from work.
,■ Rollover. Answer: A qualified transfer of funds from one tax-
favored account to another, usually of the same type.
■ Roth IRA. Answer: A type of individual retirement arrangement in
which contributions are not tax deductible, earnings grow tax
deferred, and qualified withdrawals are tax free.
■ Traditional IRA. Answer: An individual retirement arrangement,
contributions to which may or may not be deductible depending on
the taxpayer's AGI and whether or not he is covered under an
employer-sponsored retirement plan.
■ What is the full retirement age?. Answer: For workers born before
1938, it is 65. For those born after it is gradually being increased to
67.
■ How much of a client's social security and equivalent tier 1 RR
benefits may be taxable?. Answer: Up to 85%.
■ Form SSA-1099. Answer: Social Security Benefits
■ Form RRB-1099. Answer: Railroad Retirement Benefits
■ None of Social Security Benefits Taxable. Answer: Single, Head of
Household, Qualified Widow - $0-$25,000; Married Filing Jointly -
$0-$32,000
, ■ Up to 50% of Social Security Benefits Taxable. Answer: Single,
Head of Household, Qualified Widow - $25,001-$34,000; Married
Filing Jointly - $32,001-$44,000
■ Up to 85% of Social Security Benefits Taxable. Answer: Single,
Head of Household, Qualified Widow - $34,001+; Married Filing
Jointly - $44,001+; Married Filing Single - $1+
■ Fully Taxable Pension. Answer: Pensions to which the taxpayer did
not make after-tax contributions or from which all pre-tax amounts
have been recovered in previous years.
■ Partly Taxable Pensions. Answer: Those pensions funded through
employer plans to which the employee contributed some after-tax
money.
■ Form 1099-R. Answer: Distributions from Pensions, Annuities,
Retirement, or Profit-Sharing Plans, IRAs, Insurance Contracts, Etc.
■ Exceptions to the Early Withdrawal Penalty. Answer: 01 - The
distribution was made to an employee who separated from service
during or after the year in which they reached age 55.
02 - The distribution is part of a series of substantially equal periodic
payments, made at least annually for the life of the participant or the
life expenctancy of the participant.
03 - The distribution was made due to permanent and total disability.
04 - The distribution was made due to the death of the employee.
05 - The distribution was made in a year that the taxpayer's medical
expenses exceeds 7.5% of AGI.
