HRB-27 Final Exam Review Questions and
Answers|Latest Update
What action should a Tax Professional take if a client insists on reporting information that is
inaccurate? A Tax Professional should never prepare a return that contains inaccurate
information. (26.7)
If the employee thinks his Form W-2 is not correct, what should he do? • If the name or
social security number is incorrect, the taxpayer may change it himself and need not obtain a
corrected W-2 before filing his tax return.
• The employer should be notified of the error and asked to update his records.
• Furthermore, the employee's social security number and earnings records should be verified
with the Social Security Administration to ensure that the earnings were properly credited. (2.17)
Where can the regular standard deduction amounts be found? • In the left-hand margin at
the top of page 2 of Forms 1040 and 1040A.
• They are: S, MFS $5,700; MFJ, QW $11,400; HH $8,400.
• The amounts differ for taxpayers age 65 or older or blind and those who may be claimed as
dependents by other taxpayers.
[2010]
,What is the exemption amount for 2009? $3,650 with a reduction for higher-income
taxpayers of 2% for each $2,500 ($1,250 MFS) the AGI exceeds amounts:
$166,800 S
$250,200 MFJ QW
$125,100 MFS
$208,500 HH
(3.7,8)
Are early distributions from qualified retirement plans always penalized? No.
• Does not apply to qualified disaster recovery assistance distributions.
• Does not apply to any recovery of cost or any amount rolled over in a timely manner.
(22.12,13)
How does a Tax Professional know if a distribution exception applies? • He can determine
that by using thorough interview questions when discussing the distribution with the client.
• The distribution code on the 1099-R can also be helpful to the Tax Professional. (22.12)
, 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)
Answers|Latest Update
What action should a Tax Professional take if a client insists on reporting information that is
inaccurate? A Tax Professional should never prepare a return that contains inaccurate
information. (26.7)
If the employee thinks his Form W-2 is not correct, what should he do? • If the name or
social security number is incorrect, the taxpayer may change it himself and need not obtain a
corrected W-2 before filing his tax return.
• The employer should be notified of the error and asked to update his records.
• Furthermore, the employee's social security number and earnings records should be verified
with the Social Security Administration to ensure that the earnings were properly credited. (2.17)
Where can the regular standard deduction amounts be found? • In the left-hand margin at
the top of page 2 of Forms 1040 and 1040A.
• They are: S, MFS $5,700; MFJ, QW $11,400; HH $8,400.
• The amounts differ for taxpayers age 65 or older or blind and those who may be claimed as
dependents by other taxpayers.
[2010]
,What is the exemption amount for 2009? $3,650 with a reduction for higher-income
taxpayers of 2% for each $2,500 ($1,250 MFS) the AGI exceeds amounts:
$166,800 S
$250,200 MFJ QW
$125,100 MFS
$208,500 HH
(3.7,8)
Are early distributions from qualified retirement plans always penalized? No.
• Does not apply to qualified disaster recovery assistance distributions.
• Does not apply to any recovery of cost or any amount rolled over in a timely manner.
(22.12,13)
How does a Tax Professional know if a distribution exception applies? • He can determine
that by using thorough interview questions when discussing the distribution with the client.
• The distribution code on the 1099-R can also be helpful to the Tax Professional. (22.12)
, 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)
