CFL Revision For Exam Questions
with 100% Correct Answers.
Form W-2 is used to prepare the employee's tax return
true
The employee and the federal government both receive Form W-2
true
Interest income is earned on money in savings accounts
true
All interest income is taxable
true
Tax-exempt interest is not reported on the individual income tax return
false
Form 1099-INT is used to report interest income
true
Interest
the charge for the use of borrowed money
Interest received on a certificate of deposit is
taxable
Interest received on a bond issued by the state of California to fund school buildings is
tax-exempt
Interest received on a loan you made to your business partner is
taxable
, Interest received on a bond issued by the city of Austin, Texas, for a redevelopment project
is
tax-exempt
Interest income is considered
unearned income
Should taxpayers report taxable interest income that does not appear on Form 1099-INT?
yes
Each dependency exemption decreases income subject to tax
true
A person can be claimed as a dependent on more than one income tax return
false
The age test applies to a qualifying child
true
The Member of Household or Relationship Test must be met for a Qualifying Relative
true
Dependent taxpayer test (child)
when claimed as a dependent by another person, you cannot claim anyone else as a dependent
Joint return test (child)
child must be unmarried, married but does not file a joint return, or married and files a
joint return only to claim a refund of withheld tax
Citizen or resident test (child)
child must be a U.S. citizen or resident or a resident of Canada or Mexico
Relationship test (child)
with 100% Correct Answers.
Form W-2 is used to prepare the employee's tax return
true
The employee and the federal government both receive Form W-2
true
Interest income is earned on money in savings accounts
true
All interest income is taxable
true
Tax-exempt interest is not reported on the individual income tax return
false
Form 1099-INT is used to report interest income
true
Interest
the charge for the use of borrowed money
Interest received on a certificate of deposit is
taxable
Interest received on a bond issued by the state of California to fund school buildings is
tax-exempt
Interest received on a loan you made to your business partner is
taxable
, Interest received on a bond issued by the city of Austin, Texas, for a redevelopment project
is
tax-exempt
Interest income is considered
unearned income
Should taxpayers report taxable interest income that does not appear on Form 1099-INT?
yes
Each dependency exemption decreases income subject to tax
true
A person can be claimed as a dependent on more than one income tax return
false
The age test applies to a qualifying child
true
The Member of Household or Relationship Test must be met for a Qualifying Relative
true
Dependent taxpayer test (child)
when claimed as a dependent by another person, you cannot claim anyone else as a dependent
Joint return test (child)
child must be unmarried, married but does not file a joint return, or married and files a
joint return only to claim a refund of withheld tax
Citizen or resident test (child)
child must be a U.S. citizen or resident or a resident of Canada or Mexico
Relationship test (child)
