H&R Block Income Tax Course 2026/2027 | Study Guide, Practice Questions & Exam Prep

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Due Diligence


Requirements that tax professionals must follow when preparing income tax returns.


Estimated Tax


The amount of tax a taxpayer expects to owe for the year after subtracting expected amounts
withheld and certain refundable credits.


Estimated Tax Voucher


A statement by an individual of (1) the amount of income tax he estimates he will incur during the
current taxable year on income that is not subject to withholding, (2) the excess amount over that
withheld on income which is subject to withholding, and (3) his estimated self-employment tax.


Exemption from Withholding


Status claimed on Form W-4 directing the employer not to withhold federal income taxes from
the employee.


Underpayment Penalty


If a taxpayer did not pay enough tax on a timely basis during the year, he may be required to pay
an underpayment penalty.


Two Ways to Pay as You Go


Withholding and Estimated Tax Payments


Form W-4


Employee's Withholding Allowance Certificate




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Form 4868


Application for Automatic Extension of Time To File U.S. Individual Income Tax Return


Amended Return


A tax return filed on Form 1040X after the original return has been filed.


Closed Year


A tax year for which the statute of limitations has expired.


Open Year


A taxable year for which the statute of limitations has not yet expired.


Failure-to-File Penalty


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


Taxpayer fails to file the return by the due date, and there is a balance due.


Form 1040X


Amended U.S. Individual Income Tax Return


When can an amended return be filed?


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.



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Can the 1040X be e-filed?


No.


Portfolio Income and Losses


Those from such sources as dividends, interest, capital gains and losses, and royalties.


Schedule E


Supplemental Income and Loss


Royalty


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


A series of payments under a contract made at regular intervals over a period of more than one
year.


Beneficiary


The owner or recipient of funds in an account, such as an IRA, or from an insurance policy or
will.


Contribution


When a person puts money into a retirement plan.


Defined Benefit Plan


An employee benefit plan that provides determinable benefits not based on employer profits.


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Defined Contribution Plan


An employee benefit plan that provides a separate account for each person covered and pays
benefits based on account earnings.


Disability Pension


A taxable pension from an employer-funded disability plan or a disability provision of a
retirement plan.


Distribution


When a person takes or receives money from a retirement plan.


Pension


Generally a series of definitely determinable payments made to a taxpayer after retirement from
work.


Rollover


A qualified transfer of funds from one tax-favored account to another, usually of the same type.


Roth IRA


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


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.




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H&R Block Income Tax CourseH&R Block Income Tax Course!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!~~~~~~~~~~~~