H&R BLOCK INCOME TAX COURSE
QUESTIONS WITH 100% CORRECT
ANSWERS 2026 A+
Due diligence
2025/2026
Requirements that tax professionals must follow when preparing income tax returns.
Estimated tax
The amount of tax a taxpayer expects to owe for the year after subtracting expected amounts
withheld and certain refundable credits.
Estimated tax voucher
A statement by an individual of (1) the amount of income tax he estimates he will incur
during the current taxable year on income that is not subject to withholding, (2) the
excess amount over that withheld on income which is subject to withholding, and (3) his
estimated self-employment tax.
Exemption from withholding
Status claimed on form w-4 directing the employer not to withhold federal income taxes
from the employee.
Underpayment penalty
If a taxpayer did not pay enough tax on a timely basis during the year, he may be required to pay
an underpayment penalty.
Two ways to pay as you go
Withholding and estimated tax payments
Form w-4
Employee's withholding allowance certificate
Form 4868
Application for automatic extension of time to file u.s. Individual income tax return
Amended return
A tax return filed on form 1040x after the original return has been filed.
Closed year
A tax year for which the statute of limitations has expired.
Open year
,A taxable year for which the statute of limitations has not yet expired.
Failure-to-file penalty
Generally 5% for each month or part of a month the return is late, but not more than 25% of
the tax not paid.
Failure to file
Taxpayer fails to file the return by the due date, and there is a balance due.
Form 1040x
Amended u.s. Individual income tax return
When can an amended return be filed?
Within three years of the date the original return was filed, or within two years of the date
the tax was paid, whichever is later.
Can the 1040x be e-filed?
No.
Portfolio income and losses
Those from such sources as dividends, interest, capital gains and losses, and royalties.
Schedule e
Supplemental income and loss
Royalty
Payments received for the right to extract natural resources from the taxpayer's property or to use
a taxpayer's literary, musical, or artistic creation.
Annuity
A series of payments under a contract made at regular intervals over a period of more than one
year.
Beneficiary
The owner or recipient of funds in an account, such as an ira, or from an insurance policy or will.
Contribution
When a person puts money into a retirement plan.
Defined benefit plan
An employee benefit plan that provides determinable benefits not based on employer profits.
Defined contribution plan
,An employee benefit plan that provides a separate account for each person covered and pays
benefits based on account earnings.
Disability pension
A taxable pension from an employer-funded disability plan or a disability provision of a
retirement plan.
Distribution
When a person takes or receives money from a retirement plan.
Pension
Generally a series of definitely determinable payments made to a taxpayer after retirement
from work.
Rollover
A qualified transfer of funds from one tax-favored account to another, usually of the same type.
Roth ira
A type of individual retirement arrangement in which contributions are not tax deductible,
earnings grow tax deferred, and qualified withdrawals are tax free.
Traditional ira
An individual retirement arrangement, contributions to which may or may not be
deductible depending on the taxpayer's agi and whether or not he is covered under an
employer-sponsored retirement plan.
What is the full retirement age?
For workers born before 1938, it is 65. For those born after it is gradually being increased to 67.
How much of a client's social security and equivalent tier 1 rr benefits may be taxable?
Up to 85%.
Form ssa-1099
Social security benefits
Form rrb-1099
Railroad retirement benefits
None of social security benefits taxable
Single, head of household, qualified widow - $0-$25,000; married filing jointly - $0-$32,000
Up to 50% of social security benefits taxable
, Single, head of household, qualified widow - $25,001-$34,000; married filing jointly - $32,001-
$44,000
Up to 85% of social security benefits taxable
Single, head of household, qualified widow - $34,001+; married filing jointly - $44,001+;
married filing single - $1+
Fully taxable pension
Pensions to which the taxpayer did not make after-tax contributions or from which all pre-
tax amounts have been recovered in previous years.
Partly taxable pensions
Those pensions funded through employer plans to which the employee contributed some after-
tax money.
Form 1099-r
Distributions from pensions, annuities, retirement, or profit-sharing plans, iras, insurance
contracts, etc.
Exceptions to the early withdrawal penalty
01 - the distribution was made to an employee who separated from service during or after the
year in which they reached age 55.
02 - the distribution is part of a series of substantially equal periodic payments, made at least
annually for the life of the participant or the life expenctancy of the participant.
03 - the distribution was made due to permanent and total
disability. 04 - the distribution was made due to the death of
the employee.
05 - the distribution was made in a year that the taxpayer's medical expenses exceeds 7.5% of
agi. 06 - the distribution was made to an alternate payee under a qualified domestic
relations order.
07 - the distribution was made in a year an unemployed taxpayer paid health insurance
premiums. 08 - the distribution was made to pay qualified higher education expenses for the
taxpayer, spouse, their child, or their grandchild.
09 - the distribution was made to pay qualified first-time, home-buying expenses.
10 - the distribution was made due to an irs levy of the qualified plan.
11 - the distribution was made to a reservist while serving on active duty for at least 180 days.
12 - other.
401(k)
plan
Deferred compensation plan available through a wide range of employers. Contributions to a
401(k) plan are tax deferred to the employee. Distributions from the plan are taxed as ordinary
income to the recipient when received.
QUESTIONS WITH 100% CORRECT
ANSWERS 2026 A+
Due diligence
2025/2026
Requirements that tax professionals must follow when preparing income tax returns.
Estimated tax
The amount of tax a taxpayer expects to owe for the year after subtracting expected amounts
withheld and certain refundable credits.
Estimated tax voucher
A statement by an individual of (1) the amount of income tax he estimates he will incur
during the current taxable year on income that is not subject to withholding, (2) the
excess amount over that withheld on income which is subject to withholding, and (3) his
estimated self-employment tax.
Exemption from withholding
Status claimed on form w-4 directing the employer not to withhold federal income taxes
from the employee.
Underpayment penalty
If a taxpayer did not pay enough tax on a timely basis during the year, he may be required to pay
an underpayment penalty.
Two ways to pay as you go
Withholding and estimated tax payments
Form w-4
Employee's withholding allowance certificate
Form 4868
Application for automatic extension of time to file u.s. Individual income tax return
Amended return
A tax return filed on form 1040x after the original return has been filed.
Closed year
A tax year for which the statute of limitations has expired.
Open year
,A taxable year for which the statute of limitations has not yet expired.
Failure-to-file penalty
Generally 5% for each month or part of a month the return is late, but not more than 25% of
the tax not paid.
Failure to file
Taxpayer fails to file the return by the due date, and there is a balance due.
Form 1040x
Amended u.s. Individual income tax return
When can an amended return be filed?
Within three years of the date the original return was filed, or within two years of the date
the tax was paid, whichever is later.
Can the 1040x be e-filed?
No.
Portfolio income and losses
Those from such sources as dividends, interest, capital gains and losses, and royalties.
Schedule e
Supplemental income and loss
Royalty
Payments received for the right to extract natural resources from the taxpayer's property or to use
a taxpayer's literary, musical, or artistic creation.
Annuity
A series of payments under a contract made at regular intervals over a period of more than one
year.
Beneficiary
The owner or recipient of funds in an account, such as an ira, or from an insurance policy or will.
Contribution
When a person puts money into a retirement plan.
Defined benefit plan
An employee benefit plan that provides determinable benefits not based on employer profits.
Defined contribution plan
,An employee benefit plan that provides a separate account for each person covered and pays
benefits based on account earnings.
Disability pension
A taxable pension from an employer-funded disability plan or a disability provision of a
retirement plan.
Distribution
When a person takes or receives money from a retirement plan.
Pension
Generally a series of definitely determinable payments made to a taxpayer after retirement
from work.
Rollover
A qualified transfer of funds from one tax-favored account to another, usually of the same type.
Roth ira
A type of individual retirement arrangement in which contributions are not tax deductible,
earnings grow tax deferred, and qualified withdrawals are tax free.
Traditional ira
An individual retirement arrangement, contributions to which may or may not be
deductible depending on the taxpayer's agi and whether or not he is covered under an
employer-sponsored retirement plan.
What is the full retirement age?
For workers born before 1938, it is 65. For those born after it is gradually being increased to 67.
How much of a client's social security and equivalent tier 1 rr benefits may be taxable?
Up to 85%.
Form ssa-1099
Social security benefits
Form rrb-1099
Railroad retirement benefits
None of social security benefits taxable
Single, head of household, qualified widow - $0-$25,000; married filing jointly - $0-$32,000
Up to 50% of social security benefits taxable
, Single, head of household, qualified widow - $25,001-$34,000; married filing jointly - $32,001-
$44,000
Up to 85% of social security benefits taxable
Single, head of household, qualified widow - $34,001+; married filing jointly - $44,001+;
married filing single - $1+
Fully taxable pension
Pensions to which the taxpayer did not make after-tax contributions or from which all pre-
tax amounts have been recovered in previous years.
Partly taxable pensions
Those pensions funded through employer plans to which the employee contributed some after-
tax money.
Form 1099-r
Distributions from pensions, annuities, retirement, or profit-sharing plans, iras, insurance
contracts, etc.
Exceptions to the early withdrawal penalty
01 - the distribution was made to an employee who separated from service during or after the
year in which they reached age 55.
02 - the distribution is part of a series of substantially equal periodic payments, made at least
annually for the life of the participant or the life expenctancy of the participant.
03 - the distribution was made due to permanent and total
disability. 04 - the distribution was made due to the death of
the employee.
05 - the distribution was made in a year that the taxpayer's medical expenses exceeds 7.5% of
agi. 06 - the distribution was made to an alternate payee under a qualified domestic
relations order.
07 - the distribution was made in a year an unemployed taxpayer paid health insurance
premiums. 08 - the distribution was made to pay qualified higher education expenses for the
taxpayer, spouse, their child, or their grandchild.
09 - the distribution was made to pay qualified first-time, home-buying expenses.
10 - the distribution was made due to an irs levy of the qualified plan.
11 - the distribution was made to a reservist while serving on active duty for at least 180 days.
12 - other.
401(k)
plan
Deferred compensation plan available through a wide range of employers. Contributions to a
401(k) plan are tax deferred to the employee. Distributions from the plan are taxed as ordinary
income to the recipient when received.
