HRB 27 CORRECT FINAL EXAM QUESTIONS AND
ANSWERS SURE A+
✔✔Is there a time limit for filing amended returns? - ✔✔Yes.
Three years from the date the return was filed or within two years the tax was paid,
whichever is later. (23.3)
✔✔A taxpayer wants to amend his 2006 return. He filed it April 16, 2007. The return
was examined by the IRS on January 9, 2009 and $280 additional tax was paid that
date. What is the latest date on which an amended return may be filed? - ✔✔January 9,
2011
Any refund will be limited to $280 (the tax paid within the two years preceding the date
the amended return was filed). (23.3)
✔✔What are the rules for changing filing status after the due date of the return? -
✔✔Married couples may not change their filing status from MFJ to MFS after the due
date. (23.4)
✔✔A taxpayer's employer paid $500 of a taxpayer's $2,000 child care expenses for him.
How will the employer's assistance affect the child-care credit? - ✔✔Total child care
expenses must be reduced by any amounts paid by the employer. (8.11)
✔✔Where does the employer report the amount of child care expense assistance to the
taxpayer? - ✔✔Form W-2 Box 10 (8.11)
✔✔What is the maximum amount of contributions on which the Saver's Credit may be
based? - ✔✔$2,000 per individual or spouse (21.19)
✔✔What are the rates for the Saver's Credit? - ✔✔The rates are 10%, 20%, or 50%,
depending upon filing status and modified AGI. (21.17)
, ✔✔A taxpayer is building a new home and had a solar water heater installed in 2009,
but the home was not ready to be occupied until early 2010. Can they take the
residential energy credit? - ✔✔Yes, they can take the credit on their 2010 tax return.
(8.21)
✔✔How much may an eligible educator deduct for qualified classroom expenses as an
adjustment to income? - ✔✔Up to $250 (11.4)
✔✔Who is an eligible educator? - ✔✔Works at least 900 hours a year. (11.4)
✔✔Where is the educator expense deduction reported? - ✔✔Form 1040 Line 23.
✔✔Who may not claim a student loan interest deduction? - ✔✔Someone who is claimed
as a dependent may not claim the deduction in the current tax year, nor may someone
who uses the married filing separately filing status.(11.8)
✔✔What is a qualified student loan? - ✔✔• Any type of loan used to pay qualified
expenses. Credit card debt may be included, provided the card was used exclusively to
pay for qualified expenses.
• Money borrowed from a related person is not a qualified student loan. (11.5)
✔✔Where are moving expenses deducted on Form 1040? - ✔✔Line 26, from Form
3903
✔✔What are qualified medical expenses with regards to an HSA? - ✔✔Unreimbursed
medical expenses that would normally be deductible on Schedule A (11.16)
✔✔What form is used to report HSA contributions and determine any allowable
deduction? - ✔✔Form 8889. Reported on Form 1040 Line 25.
✔✔What is a qualified retirement plan? - ✔✔A plan which is eligible for favorable tax
treatment because it meets the requirements of IRC §401(a) and the Employment
Retirement Income Security Act of 1974 (ERISA) (21.2)
✔✔What is the 2009 contribution limit to 401(k) plans? - ✔✔• The maximum contribution
for 2009 is $16,500 (and 2010).
• Taxpayers age 50 and above are allowed a $5,500 annual "catch-up" contribution.
(21.4)
✔✔In tax terms, what is it called when a taxpayer puts money into an IRA? -
✔✔Contribution.
✔✔What is it called when a taxpayer takes money out of an IRA? - ✔✔Distribution.
ANSWERS SURE A+
✔✔Is there a time limit for filing amended returns? - ✔✔Yes.
Three years from the date the return was filed or within two years the tax was paid,
whichever is later. (23.3)
✔✔A taxpayer wants to amend his 2006 return. He filed it April 16, 2007. The return
was examined by the IRS on January 9, 2009 and $280 additional tax was paid that
date. What is the latest date on which an amended return may be filed? - ✔✔January 9,
2011
Any refund will be limited to $280 (the tax paid within the two years preceding the date
the amended return was filed). (23.3)
✔✔What are the rules for changing filing status after the due date of the return? -
✔✔Married couples may not change their filing status from MFJ to MFS after the due
date. (23.4)
✔✔A taxpayer's employer paid $500 of a taxpayer's $2,000 child care expenses for him.
How will the employer's assistance affect the child-care credit? - ✔✔Total child care
expenses must be reduced by any amounts paid by the employer. (8.11)
✔✔Where does the employer report the amount of child care expense assistance to the
taxpayer? - ✔✔Form W-2 Box 10 (8.11)
✔✔What is the maximum amount of contributions on which the Saver's Credit may be
based? - ✔✔$2,000 per individual or spouse (21.19)
✔✔What are the rates for the Saver's Credit? - ✔✔The rates are 10%, 20%, or 50%,
depending upon filing status and modified AGI. (21.17)
, ✔✔A taxpayer is building a new home and had a solar water heater installed in 2009,
but the home was not ready to be occupied until early 2010. Can they take the
residential energy credit? - ✔✔Yes, they can take the credit on their 2010 tax return.
(8.21)
✔✔How much may an eligible educator deduct for qualified classroom expenses as an
adjustment to income? - ✔✔Up to $250 (11.4)
✔✔Who is an eligible educator? - ✔✔Works at least 900 hours a year. (11.4)
✔✔Where is the educator expense deduction reported? - ✔✔Form 1040 Line 23.
✔✔Who may not claim a student loan interest deduction? - ✔✔Someone who is claimed
as a dependent may not claim the deduction in the current tax year, nor may someone
who uses the married filing separately filing status.(11.8)
✔✔What is a qualified student loan? - ✔✔• Any type of loan used to pay qualified
expenses. Credit card debt may be included, provided the card was used exclusively to
pay for qualified expenses.
• Money borrowed from a related person is not a qualified student loan. (11.5)
✔✔Where are moving expenses deducted on Form 1040? - ✔✔Line 26, from Form
3903
✔✔What are qualified medical expenses with regards to an HSA? - ✔✔Unreimbursed
medical expenses that would normally be deductible on Schedule A (11.16)
✔✔What form is used to report HSA contributions and determine any allowable
deduction? - ✔✔Form 8889. Reported on Form 1040 Line 25.
✔✔What is a qualified retirement plan? - ✔✔A plan which is eligible for favorable tax
treatment because it meets the requirements of IRC §401(a) and the Employment
Retirement Income Security Act of 1974 (ERISA) (21.2)
✔✔What is the 2009 contribution limit to 401(k) plans? - ✔✔• The maximum contribution
for 2009 is $16,500 (and 2010).
• Taxpayers age 50 and above are allowed a $5,500 annual "catch-up" contribution.
(21.4)
✔✔In tax terms, what is it called when a taxpayer puts money into an IRA? -
✔✔Contribution.
✔✔What is it called when a taxpayer takes money out of an IRA? - ✔✔Distribution.
