H&R BLOCK INCOME TAX UPDATED EXAMS SCRIPT
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Employer-provided dependent care assistance:
It may be used for the Child and Dependent Care Credit.
It is subtracted from the total expenses for the child or dependent care on Form 2441.
It is included in wages on Form W-2.
It is not reported to the IRS. - ✔✔
✔✔Earned Income - ✔✔Any income (wages/salary) that is generated by working
✔✔Unearned Income - ✔✔include 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? - ✔✔If the
taxpayer's name, social security number, earnings, or withholdings are incorrect, the
taxpayer should notify their employer and request a corrected Form W-2. The employee
should request that the employer update their records and verify that the earnings were
properly credited with the Social Security Administration. However, the taxpayer is still
responsible for filing a timely tax return. If the employee's attempts to obtain a corrected
Form W-2 from their employer are not successful, the taxpayer should notify the IRS. It
may be necessary to prepare a substitute Form W-2.
✔✔Is interest received on U.S. Treasury obligations taxable on state and/or local
returns? - ✔✔No. Interest on U.S. Treasury obligations is exempt from state and local
tax by federal law.
✔✔Is municipal bond interest taxable on a federal return? - ✔✔No, the federal
government does not tax municipal bond interest.
✔✔How is interest income reported to the taxpayer? - ✔✔Interest income is reported to
the taxpayer on Form 1099-INT or a substitute statement.
✔✔What information do you need to know to determine whether a nondependent
taxpayer is required to file a return? - ✔✔
✔✔For tax purposes, when is a person's marital status determined? - ✔✔On the last
day of the tax year, or the date of death.
✔✔How much is added to the standard deduction if the taxpayer (or spouse) is age 65
or older, or blind? - ✔✔$1,350 for married taxpayers and qualifying widow(er)s, or
$1,700 for those filing single or head of household.
, ✔✔What is the personal exemption amount for 2021? - ✔✔There is no personal
exemption for 2021. A personal exemption was an amount previously allowed by law to
reduce income that would otherwise be taxed. The Tax Cuts and Jobs Act of 2017
repealed this deduction beginning in 2018.
✔✔How is the gross income filing requirement determined for most nondependent
taxpayers? - ✔✔The taxpayer's standard deduction, including the additional amounts for
age. However, for married filing separately, or married filing jointly when the spouses
did not live together at the end of the year, the amount is $5.
✔✔What is the difference between injured spouse allocation and innocent spouse
relief? - ✔✔The IRS provides an injured spouse allocation for the 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.
The IRS provides 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.
✔✔What document will the taxpayer receive from their employer reporting disability
pension payments? - ✔✔The income is reported on Form 1099-R.
✔✔What types of income must be reported on Schedule 1 (Form 1040) and then
reported on Form 1040? - ✔✔Gambling winnings, alimony, jury duty pay, canceled
debts, and hobby income are some examples of income that must be reported on
Schedule 1 (Form 1040) and then reported on Form 1040.
✔✔What are the adjustments that can be claimed on Schedule 1 (Form 1040)? -
✔✔Some examples of adjustments that can be claimed on Schedule 1 are:
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? - ✔✔Up to $250 per eligible educator.
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Employer-provided dependent care assistance:
It may be used for the Child and Dependent Care Credit.
It is subtracted from the total expenses for the child or dependent care on Form 2441.
It is included in wages on Form W-2.
It is not reported to the IRS. - ✔✔
✔✔Earned Income - ✔✔Any income (wages/salary) that is generated by working
✔✔Unearned Income - ✔✔include 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? - ✔✔If the
taxpayer's name, social security number, earnings, or withholdings are incorrect, the
taxpayer should notify their employer and request a corrected Form W-2. The employee
should request that the employer update their records and verify that the earnings were
properly credited with the Social Security Administration. However, the taxpayer is still
responsible for filing a timely tax return. If the employee's attempts to obtain a corrected
Form W-2 from their employer are not successful, the taxpayer should notify the IRS. It
may be necessary to prepare a substitute Form W-2.
✔✔Is interest received on U.S. Treasury obligations taxable on state and/or local
returns? - ✔✔No. Interest on U.S. Treasury obligations is exempt from state and local
tax by federal law.
✔✔Is municipal bond interest taxable on a federal return? - ✔✔No, the federal
government does not tax municipal bond interest.
✔✔How is interest income reported to the taxpayer? - ✔✔Interest income is reported to
the taxpayer on Form 1099-INT or a substitute statement.
✔✔What information do you need to know to determine whether a nondependent
taxpayer is required to file a return? - ✔✔
✔✔For tax purposes, when is a person's marital status determined? - ✔✔On the last
day of the tax year, or the date of death.
✔✔How much is added to the standard deduction if the taxpayer (or spouse) is age 65
or older, or blind? - ✔✔$1,350 for married taxpayers and qualifying widow(er)s, or
$1,700 for those filing single or head of household.
, ✔✔What is the personal exemption amount for 2021? - ✔✔There is no personal
exemption for 2021. A personal exemption was an amount previously allowed by law to
reduce income that would otherwise be taxed. The Tax Cuts and Jobs Act of 2017
repealed this deduction beginning in 2018.
✔✔How is the gross income filing requirement determined for most nondependent
taxpayers? - ✔✔The taxpayer's standard deduction, including the additional amounts for
age. However, for married filing separately, or married filing jointly when the spouses
did not live together at the end of the year, the amount is $5.
✔✔What is the difference between injured spouse allocation and innocent spouse
relief? - ✔✔The IRS provides an injured spouse allocation for the 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.
The IRS provides 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.
✔✔What document will the taxpayer receive from their employer reporting disability
pension payments? - ✔✔The income is reported on Form 1099-R.
✔✔What types of income must be reported on Schedule 1 (Form 1040) and then
reported on Form 1040? - ✔✔Gambling winnings, alimony, jury duty pay, canceled
debts, and hobby income are some examples of income that must be reported on
Schedule 1 (Form 1040) and then reported on Form 1040.
✔✔What are the adjustments that can be claimed on Schedule 1 (Form 1040)? -
✔✔Some examples of adjustments that can be claimed on Schedule 1 are:
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? - ✔✔Up to $250 per eligible educator.
