H&R Block Income Tax Specialist Test | Questions
& Answers (100% Verified)
Question 1
Sam pays his 19-year-old son, Joshua, $550/month to maintain the lawn
and garden at the family residence. Sam is subject to what household
employment tax rules for Joshua?
A) Since Joshua is not performing any child care services, the household
employment tax rules do not apply.
B) Since Joshua is the taxpayer's child under age 21, the household
employment tax rules do not apply.
C) Since no evidence is given that Joshua is a student, he is considered to
be Sam's household employee.
D) Since Joshua's wages are over $2,100 for the year, Sam is subject to
the household employment tax rules for Joshua.
Correct Answer: B
Rationale: A child under age 21 who performs household services for
a parent is not considered a household employee for FICA tax
purposes, regardless of the amount of wages paid. The parent is not
subject to household employment taxes for that child.
,Question 2
A taxpayer should include which of the following when figuring their
federal gross income?
A) Prior-year federal income tax refund.
B) Ordinary dividends.
C) Personal injury compensation.
D) Qualified disaster relief payments.
Correct Answer: B
Rationale: Ordinary dividends are taxable income and must be
included in gross income. Prior-year refunds are not income,
personal injury compensation is excluded under §104, and qualified
disaster relief payments are excluded under §139.
Question 3
A taxpayer is required to file Schedule 1 (Form 1040) when claiming which
of the following?
A) Retirement savings contributions credit.
B) Health savings account deduction.
C) Education credit.
D) Excess advance premium tax credit repayment.
Correct Answer: B
,Rationale: The HSA deduction is an above-the-line adjustment to
income reported on Schedule 1 (Form 1040). Retirement savings
contributions credit and education credits are reported on Schedule
3. Excess advance premium tax credit repayment is reported on
Schedule 2.
Question 4
In 2018, the excise tax for excess contributions to a health savings
account is ______.
A) 0%
B) 6%
C) 10%
D) 20%
Correct Answer: B
Rationale: Excess contributions to an HSA are subject to a 6% excise
tax for each year the excess contribution remains in the account.
Question 5
In 2018, the additional excise tax for non-qualified distributions from a
health savings account is ______.
A) 0%
B) 6%
, C) 10%
D) 20%
Correct Answer: D
Rationale: Non-qualified distributions from an HSA are subject to a
20% additional tax on the taxable amount.
Question 6
Cynthia works full-time as a teacher's aide at an elementary school. In
2018, she paid $250 to participate in a professional development course,
hoping to upgrade her job skills. Since she was no reimbursed for this
expense, she would like to claim the educator expense deduction. As
Cynthia's Tax Pro, what advice would you offer her?
A) She may not claim the deduction b/c she is not considered an eligible
educator.
B) Since she spent the $250 on professional development rather than
classroom supplies, she is not eligible for this deduction.
C) She may claim the deduction since she is an eligible educator and the
professional development course is a qualified expense.
D) Since employee business expenses are no longer deductible on SCH A,
she may not claim a deduction for the cost of the professional
development course.
Correct Answer: C
& Answers (100% Verified)
Question 1
Sam pays his 19-year-old son, Joshua, $550/month to maintain the lawn
and garden at the family residence. Sam is subject to what household
employment tax rules for Joshua?
A) Since Joshua is not performing any child care services, the household
employment tax rules do not apply.
B) Since Joshua is the taxpayer's child under age 21, the household
employment tax rules do not apply.
C) Since no evidence is given that Joshua is a student, he is considered to
be Sam's household employee.
D) Since Joshua's wages are over $2,100 for the year, Sam is subject to
the household employment tax rules for Joshua.
Correct Answer: B
Rationale: A child under age 21 who performs household services for
a parent is not considered a household employee for FICA tax
purposes, regardless of the amount of wages paid. The parent is not
subject to household employment taxes for that child.
,Question 2
A taxpayer should include which of the following when figuring their
federal gross income?
A) Prior-year federal income tax refund.
B) Ordinary dividends.
C) Personal injury compensation.
D) Qualified disaster relief payments.
Correct Answer: B
Rationale: Ordinary dividends are taxable income and must be
included in gross income. Prior-year refunds are not income,
personal injury compensation is excluded under §104, and qualified
disaster relief payments are excluded under §139.
Question 3
A taxpayer is required to file Schedule 1 (Form 1040) when claiming which
of the following?
A) Retirement savings contributions credit.
B) Health savings account deduction.
C) Education credit.
D) Excess advance premium tax credit repayment.
Correct Answer: B
,Rationale: The HSA deduction is an above-the-line adjustment to
income reported on Schedule 1 (Form 1040). Retirement savings
contributions credit and education credits are reported on Schedule
3. Excess advance premium tax credit repayment is reported on
Schedule 2.
Question 4
In 2018, the excise tax for excess contributions to a health savings
account is ______.
A) 0%
B) 6%
C) 10%
D) 20%
Correct Answer: B
Rationale: Excess contributions to an HSA are subject to a 6% excise
tax for each year the excess contribution remains in the account.
Question 5
In 2018, the additional excise tax for non-qualified distributions from a
health savings account is ______.
A) 0%
B) 6%
, C) 10%
D) 20%
Correct Answer: D
Rationale: Non-qualified distributions from an HSA are subject to a
20% additional tax on the taxable amount.
Question 6
Cynthia works full-time as a teacher's aide at an elementary school. In
2018, she paid $250 to participate in a professional development course,
hoping to upgrade her job skills. Since she was no reimbursed for this
expense, she would like to claim the educator expense deduction. As
Cynthia's Tax Pro, what advice would you offer her?
A) She may not claim the deduction b/c she is not considered an eligible
educator.
B) Since she spent the $250 on professional development rather than
classroom supplies, she is not eligible for this deduction.
C) She may claim the deduction since she is an eligible educator and the
professional development course is a qualified expense.
D) Since employee business expenses are no longer deductible on SCH A,
she may not claim a deduction for the cost of the professional
development course.
Correct Answer: C
