Test bank for H&R BLOCK FINAL
REVIEW latest updates!!! 2026-2027 |
correct solutions with quiz &
answers | highly graded a+
Earned Income - CORRECT ANSWERS-income is received for services performed.
Includes wages, commissions, tips, farming, and other business income
Unearned Income - CORRECT ANSWERS-taxable income that does not meet the
definition of earned income.
Ex: interest income, dividends, rents and royalties, pensions, alimony, and
unemployment income.
If an employee thinks their Form W-2 is incorrect, what should they do? - CORRECT
ANSWERS-Taxpayer should notify employer and request a corrected Form W-2 and
have them update their records with Social Secutiry Adminstration. Notify IRS if
necessary.
Is interest received on U.S. Treasury Obligations taxable on state and /or local returns?
- CORRECT ANSWERS-No. expempt by federal law
Is municipal bond interest taxable on a federal return? - CORRECT ANSWERS-No.
Govt does not tax.
How is interest income reported to the taxpayer? - CORRECT ANSWERS-Form 1099-
INT or subsitute statment.
What information do you need to know to determine whether a nondependent taxpayer
is required to file a return? - CORRECT ANSWERS-Filing status, age at end of tax year,
and gross income for the year.
When is a person's marital status determined? - CORRECT ANSWERS-On the last day
of the tax year or date of death.
How much is added to the standard deduction if the taxpayer (or spouse) is age 65 or
older or blind? - CORRECT ANSWERS-1,350 for married taxpayers and qualifying
window(er)s. 1,700 for single or head of household.
,What is the personal expemption amount for 2021? - CORRECT ANSWERS-None for
2021. The Tax Cuts and Jobs Act of 2017 repealed this deduction in beginning of 2018.
How is the gross income filing requirement determined for most nondependent
taxpayers? - CORRECT ANSWERS-The taxpayer's standard deduction, including
amounts for age. But for married filed separately and married filed jointly who did not
live together at the end of the year, the amount is $5.
What is the difference between injured spouse alloction and innocent spouse relief? -
CORRECT ANSWERS-- Injured spouse allocation for taxpayer to protect their portion of
a refund from a spouse's past-due federal income tax, unpaid student loans, unpaid
child and spousal support, or state income tax.
- Innocent spouse relief to taxpayers who file a joint return and later learn that their
spouse has underestimated income (or overstated a credit or deduction) on the return.
Is unemployment compensation taxable? - CORRECT ANSWERS-Yes, fully
Are scholarships and fellowships taxable? - CORRECT ANSWERS-Sometimes.
Generally, scholarships and fellowships are excluded from income by degree-seeking
candidates to the extent that they are used to pay qualified education expenses, such
as tuition and course-related fees. However, if they are used to pay for room and board
or other expenses, they are taxable.
What document will the taxpayer receive from their employer reporting disability pension
payments? - CORRECT ANSWERS-Form 1099-R
Under what circumstances can a disability pension qualify as earned income for earned
income credit (EIC)? - CORRECT ANSWERS-Disability pension income received
before the taxpayer attains minimum retirement age for their company is reported as
wage income. It is also considered earned income for purposes of EIC.
What types on income must be reported on Schedule 1 (Form 1040) and then reported
on Form 1040? - CORRECT ANSWERS-Gambling winnings, alimony, jury duty pay,
canceled debts, and hobby income
What are the adjustments that can be claimed on Schdule 1 (Form 1040)? - CORRECT
ANSWERS-Educator expense deduction, The health savings account (HSA) deduction,
Moving expenses for members of the military, Self-employment tax deduction, Self-
employed health insurance deduction, Penalty on early withdrawal of savings, Alimony
payments, IRA deduction, Student loan interest deduction.
How much may an eligible educator deduct for qualified classroom expenses as an
adjustment to income? - CORRECT ANSWERS-Up to $250 per educator. Married filing
a joint return and are both elgible educators can claim $250 each, totaling $500.
, Who is an eligible educator? - CORRECT ANSWERS-Worked at least 900 hours during
school year as teacher, teacher's aide, counselor, or principal in an elementary or
secondary school.
Where is the educator expense deduction reported? - CORRECT ANSWERS-Schedule
1, Additional Income and Adjustments to Income, line 11.
Who may not claim a student loan interest deduction? - CORRECT ANSWERS-
Someone who is claimed as a dependent and someone who uses the "married filing
seperately" filing status. The amount of income a taxpayer earns may also affect their
deduction. Taxpayers whose modified AGI exceeds a threshold amount for their filing
status may not be able to claim the deduction, or they may only be eligible to claim a
reduced amount.
What is a qualified student loan? - CORRECT ANSWERS-A loan used to pay qualified
education expenses. Credit card debt may be included if the card was used exclusively
to pay for qualified expenses. Money borrowed from a related person is not a qualified
student loan.
What three requirments must be met for an individual to be claimed as either a
qualifying child or a qualifying relative? - CORRECT ANSWERS-U.S. citizen, U.S.
resident alien, U.S. national, or a resident of Canada, or Mexico, cannot file a joint
return (unless solely to claim a refund of taxes paid), taxpayer claiming dependent must
not be a dependent of another taxpayer.
What are the five tests for a qualifying child? - CORRECT ANSWERS-Relationship test,
Age test, Residency test, Support test, and Joint return test.
How can a married individual meet the joint return test to remain a qualifying child? -
CORRECT ANSWERS-By not filing a joint return with their spouse, or can file a joint
return with their spouse if they are filing only to claim a refund of any taxes withheld.
How can you determine who paid more than half of a person's support? - CORRECT
ANSWERS-First, determine the potential dependent's total support. Then, that amount
is reduced by the funds used by all sources other than the taxpayer. Other sources of
support: relatives, government programs, and the dependent's own income. If the
taxpayer paid more than one-half of the total support, they may claim as a qualifying
relative, if all the other requirements are met. If the dependent paid more than one-half
of their own support, then no one else may claim them and they are not a dependent.
What four tests must be met for an individual to be considered a qualifying relative? -
CORRECT ANSWERS-Not a qualifying child of someone else, Relationship OR
member of the household for the entire year, Gross income, and Support.
How can the gross income test for a qualifying relative be satisfied? - CORRECT
ANSWERS-qualifying relative's gross income must be less than $4,300. Not included in
REVIEW latest updates!!! 2026-2027 |
correct solutions with quiz &
answers | highly graded a+
Earned Income - CORRECT ANSWERS-income is received for services performed.
Includes wages, commissions, tips, farming, and other business income
Unearned Income - CORRECT ANSWERS-taxable income that does not meet the
definition of earned income.
Ex: interest income, dividends, rents and royalties, pensions, alimony, and
unemployment income.
If an employee thinks their Form W-2 is incorrect, what should they do? - CORRECT
ANSWERS-Taxpayer should notify employer and request a corrected Form W-2 and
have them update their records with Social Secutiry Adminstration. Notify IRS if
necessary.
Is interest received on U.S. Treasury Obligations taxable on state and /or local returns?
- CORRECT ANSWERS-No. expempt by federal law
Is municipal bond interest taxable on a federal return? - CORRECT ANSWERS-No.
Govt does not tax.
How is interest income reported to the taxpayer? - CORRECT ANSWERS-Form 1099-
INT or subsitute statment.
What information do you need to know to determine whether a nondependent taxpayer
is required to file a return? - CORRECT ANSWERS-Filing status, age at end of tax year,
and gross income for the year.
When is a person's marital status determined? - CORRECT ANSWERS-On the last day
of the tax year or date of death.
How much is added to the standard deduction if the taxpayer (or spouse) is age 65 or
older or blind? - CORRECT ANSWERS-1,350 for married taxpayers and qualifying
window(er)s. 1,700 for single or head of household.
,What is the personal expemption amount for 2021? - CORRECT ANSWERS-None for
2021. The Tax Cuts and Jobs Act of 2017 repealed this deduction in beginning of 2018.
How is the gross income filing requirement determined for most nondependent
taxpayers? - CORRECT ANSWERS-The taxpayer's standard deduction, including
amounts for age. But for married filed separately and married filed jointly who did not
live together at the end of the year, the amount is $5.
What is the difference between injured spouse alloction and innocent spouse relief? -
CORRECT ANSWERS-- Injured spouse allocation for taxpayer to protect their portion of
a refund from a spouse's past-due federal income tax, unpaid student loans, unpaid
child and spousal support, or state income tax.
- Innocent spouse relief to taxpayers who file a joint return and later learn that their
spouse has underestimated income (or overstated a credit or deduction) on the return.
Is unemployment compensation taxable? - CORRECT ANSWERS-Yes, fully
Are scholarships and fellowships taxable? - CORRECT ANSWERS-Sometimes.
Generally, scholarships and fellowships are excluded from income by degree-seeking
candidates to the extent that they are used to pay qualified education expenses, such
as tuition and course-related fees. However, if they are used to pay for room and board
or other expenses, they are taxable.
What document will the taxpayer receive from their employer reporting disability pension
payments? - CORRECT ANSWERS-Form 1099-R
Under what circumstances can a disability pension qualify as earned income for earned
income credit (EIC)? - CORRECT ANSWERS-Disability pension income received
before the taxpayer attains minimum retirement age for their company is reported as
wage income. It is also considered earned income for purposes of EIC.
What types on income must be reported on Schedule 1 (Form 1040) and then reported
on Form 1040? - CORRECT ANSWERS-Gambling winnings, alimony, jury duty pay,
canceled debts, and hobby income
What are the adjustments that can be claimed on Schdule 1 (Form 1040)? - CORRECT
ANSWERS-Educator expense deduction, The health savings account (HSA) deduction,
Moving expenses for members of the military, Self-employment tax deduction, Self-
employed health insurance deduction, Penalty on early withdrawal of savings, Alimony
payments, IRA deduction, Student loan interest deduction.
How much may an eligible educator deduct for qualified classroom expenses as an
adjustment to income? - CORRECT ANSWERS-Up to $250 per educator. Married filing
a joint return and are both elgible educators can claim $250 each, totaling $500.
, Who is an eligible educator? - CORRECT ANSWERS-Worked at least 900 hours during
school year as teacher, teacher's aide, counselor, or principal in an elementary or
secondary school.
Where is the educator expense deduction reported? - CORRECT ANSWERS-Schedule
1, Additional Income and Adjustments to Income, line 11.
Who may not claim a student loan interest deduction? - CORRECT ANSWERS-
Someone who is claimed as a dependent and someone who uses the "married filing
seperately" filing status. The amount of income a taxpayer earns may also affect their
deduction. Taxpayers whose modified AGI exceeds a threshold amount for their filing
status may not be able to claim the deduction, or they may only be eligible to claim a
reduced amount.
What is a qualified student loan? - CORRECT ANSWERS-A loan used to pay qualified
education expenses. Credit card debt may be included if the card was used exclusively
to pay for qualified expenses. Money borrowed from a related person is not a qualified
student loan.
What three requirments must be met for an individual to be claimed as either a
qualifying child or a qualifying relative? - CORRECT ANSWERS-U.S. citizen, U.S.
resident alien, U.S. national, or a resident of Canada, or Mexico, cannot file a joint
return (unless solely to claim a refund of taxes paid), taxpayer claiming dependent must
not be a dependent of another taxpayer.
What are the five tests for a qualifying child? - CORRECT ANSWERS-Relationship test,
Age test, Residency test, Support test, and Joint return test.
How can a married individual meet the joint return test to remain a qualifying child? -
CORRECT ANSWERS-By not filing a joint return with their spouse, or can file a joint
return with their spouse if they are filing only to claim a refund of any taxes withheld.
How can you determine who paid more than half of a person's support? - CORRECT
ANSWERS-First, determine the potential dependent's total support. Then, that amount
is reduced by the funds used by all sources other than the taxpayer. Other sources of
support: relatives, government programs, and the dependent's own income. If the
taxpayer paid more than one-half of the total support, they may claim as a qualifying
relative, if all the other requirements are met. If the dependent paid more than one-half
of their own support, then no one else may claim them and they are not a dependent.
What four tests must be met for an individual to be considered a qualifying relative? -
CORRECT ANSWERS-Not a qualifying child of someone else, Relationship OR
member of the household for the entire year, Gross income, and Support.
How can the gross income test for a qualifying relative be satisfied? - CORRECT
ANSWERS-qualifying relative's gross income must be less than $4,300. Not included in
