Tax Preparer Final Exam | Latest Update 2025/2026|
Real Exam-Based Questions and Approved Answers |
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A single self-employed taxpayer estimates that his 2009 tax will be $7,500. His 2008 tax was
$7,000. How much must he prepay for 2009 in order to avoid an underpayment penalty? -
Correct Answers-$6,750; the lesser of 90% of his 2009 tax [$7,500 X 90% = $6,750] or 100%
of his 2008 tax ($7,000). (24.)
A taxpayer is building a new home and had a solar water heater installed in 2009, but the home
was not ready to be occupied until early 2010. Can they take the residential energy credit? -
Correct Answers-Yes, they can take the credit on their 2010 tax return. (8.21)
A taxpayer makes his final 2008 state estimated tax payment on January 15, 2009. Where
should he report this item? - Correct Answers-It is included on his 2009 Schedule A, line 5.
This payment also should have been included on the estimated payments line of his 2008 state
return.
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? - Correct Answers-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)
A taxpayer wrote a check for a $500 donation to his mosque. Is his cancelled check sufficient
documentation to support his deduction? - Correct Answers-No. Donations of $250 or more
must have written substantiation from the donee. (12.29)
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? - Correct Answers-Total child care
expenses must be reduced by any amounts paid by the employer. (8.11)
An employee has an office where he works, but his work load demands that he bring home
work on evenings and weekends. He uses a room of his home regularly and exclusively for his
work. May he deduct home-office expenses? - Correct Answers-No, the employer provides a
work office. (17.23)
, Are early distributions from qualified retirement plans always penalized? - Correct Answers-
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)
Are scholarships and fellowships taxable? - Correct Answers-• If a W-2 is received it is FULLY
taxable.
• Amounts to Non-degree candidates are FULLY taxable and reported on Line 7 marked "SCH"
• Amounts to Degree candidates spent for qualified expenses are NOT taxable. (18.5)
At what amount must interest income be reported on Form 1040, Schedule B? - Correct
Answers-When the total taxable interest exceeds $1,500 (6.2)
Carol has a home office. When she is not using the office, she lets her children play video games
on an old television she keeps there. Can Carol deduct home-office expenses? - Correct
Answers-No. The space must be used exclusively for the business. (17.21)
Define basis. - Correct Answers-A measure of the taxpayer's investment in property for tax
purposes. (20.4)
For MACRS purposes, we need to divide real property into two categories. What are they? -
Correct Answers-Residential and Nonresidential (16.7)
For tax purposes, when is a person's marital status determined? - Correct Answers-On the
last day of the tax year. (3.2)
Ho do we determine the MACRS recovery period of a piece of personal property? - Correct
Answers-By using the Table of Asset Class Lives and Recovery Periods (16.3)
How can a disability pension qualify as earned income for the EIC? We've learned pensions are
not earned income. - Correct Answers-Before the taxpayer reaches minimum retirement
age, it's considered earned income (18.11)
How can a married individual meet the joint return test to remain a qualifying child? -
Correct Answers-They can meet this test by not filing a joint return with their spouse, or they
can file a joint return with their spouse if they are filing only to claim a refund of any taxes
withheld. (4.4)
Real Exam-Based Questions and Approved Answers |
100% Accuracy | Tax Professional Certification. Graded
Perfect Score
A single self-employed taxpayer estimates that his 2009 tax will be $7,500. His 2008 tax was
$7,000. How much must he prepay for 2009 in order to avoid an underpayment penalty? -
Correct Answers-$6,750; the lesser of 90% of his 2009 tax [$7,500 X 90% = $6,750] or 100%
of his 2008 tax ($7,000). (24.)
A taxpayer is building a new home and had a solar water heater installed in 2009, but the home
was not ready to be occupied until early 2010. Can they take the residential energy credit? -
Correct Answers-Yes, they can take the credit on their 2010 tax return. (8.21)
A taxpayer makes his final 2008 state estimated tax payment on January 15, 2009. Where
should he report this item? - Correct Answers-It is included on his 2009 Schedule A, line 5.
This payment also should have been included on the estimated payments line of his 2008 state
return.
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? - Correct Answers-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)
A taxpayer wrote a check for a $500 donation to his mosque. Is his cancelled check sufficient
documentation to support his deduction? - Correct Answers-No. Donations of $250 or more
must have written substantiation from the donee. (12.29)
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? - Correct Answers-Total child care
expenses must be reduced by any amounts paid by the employer. (8.11)
An employee has an office where he works, but his work load demands that he bring home
work on evenings and weekends. He uses a room of his home regularly and exclusively for his
work. May he deduct home-office expenses? - Correct Answers-No, the employer provides a
work office. (17.23)
, Are early distributions from qualified retirement plans always penalized? - Correct Answers-
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)
Are scholarships and fellowships taxable? - Correct Answers-• If a W-2 is received it is FULLY
taxable.
• Amounts to Non-degree candidates are FULLY taxable and reported on Line 7 marked "SCH"
• Amounts to Degree candidates spent for qualified expenses are NOT taxable. (18.5)
At what amount must interest income be reported on Form 1040, Schedule B? - Correct
Answers-When the total taxable interest exceeds $1,500 (6.2)
Carol has a home office. When she is not using the office, she lets her children play video games
on an old television she keeps there. Can Carol deduct home-office expenses? - Correct
Answers-No. The space must be used exclusively for the business. (17.21)
Define basis. - Correct Answers-A measure of the taxpayer's investment in property for tax
purposes. (20.4)
For MACRS purposes, we need to divide real property into two categories. What are they? -
Correct Answers-Residential and Nonresidential (16.7)
For tax purposes, when is a person's marital status determined? - Correct Answers-On the
last day of the tax year. (3.2)
Ho do we determine the MACRS recovery period of a piece of personal property? - Correct
Answers-By using the Table of Asset Class Lives and Recovery Periods (16.3)
How can a disability pension qualify as earned income for the EIC? We've learned pensions are
not earned income. - Correct Answers-Before the taxpayer reaches minimum retirement
age, it's considered earned income (18.11)
How can a married individual meet the joint return test to remain a qualifying child? -
Correct Answers-They can meet this test by not filing a joint return with their spouse, or they
can file a joint return with their spouse if they are filing only to claim a refund of any taxes
withheld. (4.4)
