HR Block (TKA Exam Prep) WITH COMPLETE
QUESTIONS AND CORRECT ANSWERS
1. IRC: Internal Revenue Code
Standard Deduction: Set by statute. Included in calculating the Below-the-
2.
Line deductions (for Taxable Income). Alternative is Itemized Deduction
Itemized Deduction: Sum of allowable deductions in calculating the
3.
Below-the-Line deductions (for Taxable Income). Alternative is Standard
Deduction
4. Tax Rate (Individuals) - Ordinary Income: 10% - 37%
Tax Rate (Individuals) - Net Gains / Qualified Dividends:
5.
0% - 20% (sometimes) 20% - 28% (usually)
6. Alternative Minimum Tax Rate: 26% - 28%
7.Capital Gains: Profit (or Loss) from the sale of property or investments
(preferential tax rate compared to Ordinary Income)
8. Adjusted Gross Income (AGI): Gross Income - Deductions
9. Taxable Income: AGI - (Larger of Standard or Itemized Deduction)
10. Tentative Tax: Taxable Income (x) Tax Rate
11. Taxes Due (+) or Refund (-): Tentative Tax - Credits
12. Refundable Tax Credit: Taxpayer can receive money through a refund
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, 13. Nonrefundable Tax Credit: Tax is lowered to a possible $0. But no
refund.
14. Title 26 (US. Code): The statutory bas of all federal tax law.
15. Gross Income: "All income from whatever source derived"
16.Haig-Simons Definition of Income: Market Value of Rights Exercised
in Consumption + Change in Property Rights over the Term.
Interpretation: Total value of consumer expenditures + net change in savings (e.g., bank
accounts, stocks and bonds, real estate)
Alternative is Economic Benefit Definition.
Economic Benefit Definition of Income: Value of any economic
17.
benefit received by the taxpayer regardless of the form of that benefit.
Alternative is Haig-Simons Definition.
18. Imputed Income: *Not Income
Any services one performs for oneself or family / the value of property used that one own
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QUESTIONS AND CORRECT ANSWERS
1. IRC: Internal Revenue Code
Standard Deduction: Set by statute. Included in calculating the Below-the-
2.
Line deductions (for Taxable Income). Alternative is Itemized Deduction
Itemized Deduction: Sum of allowable deductions in calculating the
3.
Below-the-Line deductions (for Taxable Income). Alternative is Standard
Deduction
4. Tax Rate (Individuals) - Ordinary Income: 10% - 37%
Tax Rate (Individuals) - Net Gains / Qualified Dividends:
5.
0% - 20% (sometimes) 20% - 28% (usually)
6. Alternative Minimum Tax Rate: 26% - 28%
7.Capital Gains: Profit (or Loss) from the sale of property or investments
(preferential tax rate compared to Ordinary Income)
8. Adjusted Gross Income (AGI): Gross Income - Deductions
9. Taxable Income: AGI - (Larger of Standard or Itemized Deduction)
10. Tentative Tax: Taxable Income (x) Tax Rate
11. Taxes Due (+) or Refund (-): Tentative Tax - Credits
12. Refundable Tax Credit: Taxpayer can receive money through a refund
1/
12
, 13. Nonrefundable Tax Credit: Tax is lowered to a possible $0. But no
refund.
14. Title 26 (US. Code): The statutory bas of all federal tax law.
15. Gross Income: "All income from whatever source derived"
16.Haig-Simons Definition of Income: Market Value of Rights Exercised
in Consumption + Change in Property Rights over the Term.
Interpretation: Total value of consumer expenditures + net change in savings (e.g., bank
accounts, stocks and bonds, real estate)
Alternative is Economic Benefit Definition.
Economic Benefit Definition of Income: Value of any economic
17.
benefit received by the taxpayer regardless of the form of that benefit.
Alternative is Haig-Simons Definition.
18. Imputed Income: *Not Income
Any services one performs for oneself or family / the value of property used that one own
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12
