HR Block (TKA Exam Prep) | EXAM QUESTIONS WITH 100% CORRECT ANSWERS/NEWEST UPDATE/GRADE A+ ASSURED.
IRC ✔️Internal Revenue Code
Standard Deduction ✔️Set by statute. Included in calculating the Below-the-Line deductions (for Taxable Income). Alternative is Itemized
Deduction
Itemized Deduction ✔️Sum of allowable deductions in calculating the Below-the-Line deductions (for Taxable Income). Alternative is Standard
Deduction
Tax Rate (Individuals) - Ordinary Income ✔️10% - 37%
Tax Rate (Individuals) - Net Gains / Qualified Dividends ✔️0% - 20% (sometimes) 20% - 28% (usually)
Alternative Minimum Tax Rate ✔️26% - 28%
Capital Gains ✔️Profit (or Loss) from the sale of property or investments (preferential tax rate compared to Ordinary Income)
Adjusted Gross Income (AGI) ✔️Gross Income - Deductions
Taxable Income ✔️AGI - (Larger of Standard or Itemized Deduction)
Tentative Tax ✔️Taxable Income (x) Tax Rate
Taxes Due (+) or Refund (-) ✔️Tentative Tax - Credits
Refundable Tax Credit ✔️Taxpayer can receive money through a refund
Nonrefundable Tax Credit ✔️Tax is lowered to a possible $0. But no refund.
Title 26 (US. Code) ✔️The statutory bas of all federal tax law.
Gross Income ✔️"All income from whatever source derived"
Haig-Simons Definition of Income ✔️Market Value of Rights Exercised in Consumption + Change in Property Rights over the Term.
Interpretation: Total value of consumer expenditures + net change in savings (e.g., bank accounts, stocks and bonds, real estate)
Alternative is Economic Benefit Definition.
Economic Benefit Definition of Income ✔️Value of any economic benefit received by the taxpayer regardless of the form of that benefit.
Alternative is Haig-Simons Definition.
Imputed Income ✔️*Not Income
Any services one performs for oneself or family / the value of property used that one owns
Loans ✔️Loans themselves are not taxed.
However, Loan Discharge or Loan Forgiveness may constitute Income.
- Debt must be enforceable.
- Creditor has agreed to receive less than initially contracted
Compensation Income ✔️Consideration for Performance of Services (regardless of the form - e.g., cash, property, fringe benefits).
Ordinary Income taxable up to the highest rate.
IRC ✔️Internal Revenue Code
Standard Deduction ✔️Set by statute. Included in calculating the Below-the-Line deductions (for Taxable Income). Alternative is Itemized
Deduction
Itemized Deduction ✔️Sum of allowable deductions in calculating the Below-the-Line deductions (for Taxable Income). Alternative is Standard
Deduction
Tax Rate (Individuals) - Ordinary Income ✔️10% - 37%
Tax Rate (Individuals) - Net Gains / Qualified Dividends ✔️0% - 20% (sometimes) 20% - 28% (usually)
Alternative Minimum Tax Rate ✔️26% - 28%
Capital Gains ✔️Profit (or Loss) from the sale of property or investments (preferential tax rate compared to Ordinary Income)
Adjusted Gross Income (AGI) ✔️Gross Income - Deductions
Taxable Income ✔️AGI - (Larger of Standard or Itemized Deduction)
Tentative Tax ✔️Taxable Income (x) Tax Rate
Taxes Due (+) or Refund (-) ✔️Tentative Tax - Credits
Refundable Tax Credit ✔️Taxpayer can receive money through a refund
Nonrefundable Tax Credit ✔️Tax is lowered to a possible $0. But no refund.
Title 26 (US. Code) ✔️The statutory bas of all federal tax law.
Gross Income ✔️"All income from whatever source derived"
Haig-Simons Definition of Income ✔️Market Value of Rights Exercised in Consumption + Change in Property Rights over the Term.
Interpretation: Total value of consumer expenditures + net change in savings (e.g., bank accounts, stocks and bonds, real estate)
Alternative is Economic Benefit Definition.
Economic Benefit Definition of Income ✔️Value of any economic benefit received by the taxpayer regardless of the form of that benefit.
Alternative is Haig-Simons Definition.
Imputed Income ✔️*Not Income
Any services one performs for oneself or family / the value of property used that one owns
Loans ✔️Loans themselves are not taxed.
However, Loan Discharge or Loan Forgiveness may constitute Income.
- Debt must be enforceable.
- Creditor has agreed to receive less than initially contracted
Compensation Income ✔️Consideration for Performance of Services (regardless of the form - e.g., cash, property, fringe benefits).
Ordinary Income taxable up to the highest rate.
