[H&R Block Tax Knowledge Assessment
(TKA) - Comprehensive Prep Questions
& Answers]
Domain 1: Basic Tax Law & Filing (20 Questions)
Q1:
Your client, Sofia, is 28 years old, single, and provided more than half the cost of keeping up a
home for herself and her younger brother, Mateo (19), who is a full-time student and had no
income. Can Sofia claim Mateo as a dependent?
A. Yes, as a Qualifying Child.
B. [CORRECT] Yes, as a Qualifying Relative.
C. No, because Mateo is over the age of 18.
D. No, because Sofia is not old enough.
Rationale: Mateo does not meet the Qualifying Child test because he fails the age test (must
be under 19, or under 24 if a full-time student, at year-end). However, he meets the Qualifying
Relative test: (1) He is Sofia's brother (relationship test), (2) His gross income ($0) is below
the 2025 exemption amount ($5,050), and (3) Sofia provided more than half of his total
support. A is incorrect because the age test for QC fails. C is incorrect because there is no
age limit for Qualifying Relatives. D is incorrect; taxpayers under age 65 can claim dependents
regardless of their age.
Q2:
During the tax interview, Marcus states he is unmarried, paid more than half the costs of
maintaining his home, and his 6-year-old daughter lived with him for 9 months of the year. The
daughter's mother, who did not live with Marcus, will sign Form 8332 allowing Marcus to
claim the child. What is Marcus's correct filing status?
A. Single
B. [CORRECT] Head of Household
C. Qualifying Surviving Spouse
D. Married Filing Separately
Rationale: Marcus qualifies for Head of Household because he is unmarried, paid more than
half the household costs, and has a qualifying person (his daughter) who lived with him for
more than half the year. The release of claim via Form 8332 does not affect his ability to use
the child for HOH filing status purposes—only for the dependency exemption and child-related
credits. A is incorrect because he qualifies for the more beneficial HOH status. C requires a
,deceased spouse and dependent child, which does not apply. D is incorrect because he is
unmarried.
Q3:
Your client, a 68-year-old single taxpayer, asks about the 2025 standard deduction. Which
statement is correct?
A. The standard deduction is $14,600.
B. [CORRECT] The standard deduction is $16,550.
C. The standard deduction is $29,900.
D. The standard deduction is $1,950.
Rationale: For 2025, the standard deduction for Single filers is $15,000. However, taxpayers
who are age 65 or older (or blind) receive an additional standard deduction of $1,550 for
Single/HOH filers. $15,000 + $1,550 = $16,550. A is the base amount for Single without the
additional amount. C is the Married Filing Jointly amount. D is the dependency standard
deduction amount.
Q4:
Client Jennifer (45, single) supports her mother, Eleanor (70), who lives in her own apartment.
Jennifer pays 100% of Eleanor's rent ($12,000) and provides another $3,000 for groceries and
medical expenses. Eleanor has Social Security income of $18,000 (nontaxable) and interest
income of $800. Can Jennifer claim Eleanor as a dependent?
A. [CORRECT] Yes, as a Qualifying Relative.
B. Yes, as a Qualifying Child.
C. No, because Eleanor's income exceeds the limit.
D. No, because Eleanor does not live with Jennifer.
Rationale: Eleanor meets the Qualifying Relative tests: (1) She is Jennifer's mother
(relationship test—does not need to live with taxpayer), (2) Her gross income ($800 interest)
is below the 2025 limit ($5,050), and (3) Jennifer provided more than half of Eleanor's support
($15,000 vs. Eleanor's $800 income). B is incorrect because age and relationship tests for QC
fail. C is incorrect because gross income excludes nontaxable Social Security. D is incorrect
because parents are an exception to the member of household test for Qualifying Relatives.
Q5:
In the Block tax software, which of the following is considered a "Red Flag" for potential audit
risk that should trigger additional documentation review?
A. [CORRECT] A taxpayer claiming Head of Household status when the dependent is a
non-relative who lived with them for only 5 months.
B. A W-2 showing federal withholding of $5,000.
C. A taxpayer with dividend income reported on Schedule B.
D. A single taxpayer claiming the standard deduction.
,Rationale: Head of Household status requires that a qualifying person live with the taxpayer
for more than half the year (except for parents, who can live elsewhere). A non-relative must
be a member of the household for the entire year. This mismatch is a significant audit risk. B,
C, and D are normal tax situations that do not trigger audit flags.
Q6:
The Johnsons (Married Filing Jointly) have three children: ages 4, 10, and 17 (all lived with
them full-time). Their AGI is $85,000. Which child does NOT qualify for the Child Tax Credit
(CTC) in 2025?
A. The 4-year-old.
B. The 10-year-old.
C. [CORRECT] The 17-year-old.
D. All three qualify.
Rationale: The Child Tax Credit requires the child to be under age 17 at the end of the tax year.
The 17-year-old fails the age test (must be 16 or younger). However, the 17-year-old may
qualify for the Other Dependent Credit (ODC) of $500 if they meet dependency tests. A and B
meet all CTC requirements. D is incorrect because of the age limitation.
Q7:
Which of the following situations would require a taxpayer to file a tax return for 2025?
A. Single, under 65, gross income of $13,000.
B. Married Filing Jointly, both under 65, gross income of $28,000.
C. [CORRECT] Self-employed with net earnings of $450.
D. Single, 65 or older, gross income of $14,000.
Rationale: Self-employed individuals must file if net earnings are $400 or more to pay
self-employment tax. For 2025, the filing threshold for Single under 65 is $15,000 (A is below).
For MFJ under 65, it's $30,000 (B is below). For Single 65 or older, it's $16,550 (D is below).
Even though C is below the standard income threshold, the SE tax requirement triggers the
filing obligation.
Q8:
Your client, David, is divorced and has a 12-year-old son who lived with him for 205 nights
during the year. The son lived with his mother for the remaining 160 nights. According to the
Tie-Breaker Rules, who may claim the child as a dependent?
A. The parent with the higher AGI.
B. [CORRECT] David, because the child lived with him for more than half the year.
C. The mother, because she is the custodial parent by default.
D. Neither parent; they must alternate years.
Rationale: The custodial parent is defined as the parent with whom the child lived for the
greater number of nights during the year. David had 205 nights (>50%), making him the
custodial parent and the one entitled to claim the dependency (unless he releases the claim
, via Form 8332). A applies only if the child lived with each parent exactly equally (tie-breaker
for non-custodial situations). C is incorrect because custody is determined by nights, not
divorce decree alone. D describes a voluntary agreement, not tax law.
Q9:
In the H&R Block interview process, when preparing a return for a client who received a Form
1099-G for unemployment compensation, what is the critical verification step?
A. Verify that the state tax withheld was exactly 10% of the federal.
B. [CORRECT] Verify that the amount received matches the amount reported on the form and
confirm any repayments made.
C. Verify that the client was actually unemployed during the year stated.
D. Verify that the unemployment was from a government agency only.
Rationale: Unemployment compensation is taxable for federal purposes (though some states
exempt it). The Block interview process requires verifying the accuracy of the 1099-G amount
and determining if the client repaid any benefits during the year (which affects taxable
amount). A is incorrect because withholding rates vary. C, while part of client service, is not
the specific tax verification step. D is incorrect because all unemployment compensation is
reportable regardless of source.
Q10:
Taxpayer Linda is 25, single, has no dependents, and earned $28,000 in wages. She is eligible
for the Earned Income Credit (EIC). Which statement regarding the 2025 EIC is correct?
A. [CORRECT] Linda's investment income must be $11,600 or less to qualify.
B. Linda is eligible for the maximum EIC amount available to all filers.
C. Linda does not need to have a valid SSN to claim the EIC.
D. Linda can claim the EIC even if she is claimed as a dependent on another return.
Rationale: For 2025, the investment income limit for EIC eligibility is $11,600. B is incorrect
because the maximum EIC varies by number of qualifying children; Linda (no children)
receives a smaller credit. C is incorrect—all taxpayers and qualifying children must have valid
SSNs issued by the due date of the return (including extensions). D is incorrect because
taxpayers claimed as dependents cannot claim the EIC.
Q11:
Which of the following correctly describes the difference between a "Non-refundable" and a
"Refundable" tax credit in the Block tax software?
A. Non-refundable credits reduce SE tax; refundable credits reduce income tax only.
B. [CORRECT] Non-refundable credits can reduce tax liability to zero but not below; refundable
credits can generate a refund beyond tax paid.
C. Non-refundable credits carry forward; refundable credits never carry forward.
D. Non-refundable credits require Form 1116; refundable credits do not.
(TKA) - Comprehensive Prep Questions
& Answers]
Domain 1: Basic Tax Law & Filing (20 Questions)
Q1:
Your client, Sofia, is 28 years old, single, and provided more than half the cost of keeping up a
home for herself and her younger brother, Mateo (19), who is a full-time student and had no
income. Can Sofia claim Mateo as a dependent?
A. Yes, as a Qualifying Child.
B. [CORRECT] Yes, as a Qualifying Relative.
C. No, because Mateo is over the age of 18.
D. No, because Sofia is not old enough.
Rationale: Mateo does not meet the Qualifying Child test because he fails the age test (must
be under 19, or under 24 if a full-time student, at year-end). However, he meets the Qualifying
Relative test: (1) He is Sofia's brother (relationship test), (2) His gross income ($0) is below
the 2025 exemption amount ($5,050), and (3) Sofia provided more than half of his total
support. A is incorrect because the age test for QC fails. C is incorrect because there is no
age limit for Qualifying Relatives. D is incorrect; taxpayers under age 65 can claim dependents
regardless of their age.
Q2:
During the tax interview, Marcus states he is unmarried, paid more than half the costs of
maintaining his home, and his 6-year-old daughter lived with him for 9 months of the year. The
daughter's mother, who did not live with Marcus, will sign Form 8332 allowing Marcus to
claim the child. What is Marcus's correct filing status?
A. Single
B. [CORRECT] Head of Household
C. Qualifying Surviving Spouse
D. Married Filing Separately
Rationale: Marcus qualifies for Head of Household because he is unmarried, paid more than
half the household costs, and has a qualifying person (his daughter) who lived with him for
more than half the year. The release of claim via Form 8332 does not affect his ability to use
the child for HOH filing status purposes—only for the dependency exemption and child-related
credits. A is incorrect because he qualifies for the more beneficial HOH status. C requires a
,deceased spouse and dependent child, which does not apply. D is incorrect because he is
unmarried.
Q3:
Your client, a 68-year-old single taxpayer, asks about the 2025 standard deduction. Which
statement is correct?
A. The standard deduction is $14,600.
B. [CORRECT] The standard deduction is $16,550.
C. The standard deduction is $29,900.
D. The standard deduction is $1,950.
Rationale: For 2025, the standard deduction for Single filers is $15,000. However, taxpayers
who are age 65 or older (or blind) receive an additional standard deduction of $1,550 for
Single/HOH filers. $15,000 + $1,550 = $16,550. A is the base amount for Single without the
additional amount. C is the Married Filing Jointly amount. D is the dependency standard
deduction amount.
Q4:
Client Jennifer (45, single) supports her mother, Eleanor (70), who lives in her own apartment.
Jennifer pays 100% of Eleanor's rent ($12,000) and provides another $3,000 for groceries and
medical expenses. Eleanor has Social Security income of $18,000 (nontaxable) and interest
income of $800. Can Jennifer claim Eleanor as a dependent?
A. [CORRECT] Yes, as a Qualifying Relative.
B. Yes, as a Qualifying Child.
C. No, because Eleanor's income exceeds the limit.
D. No, because Eleanor does not live with Jennifer.
Rationale: Eleanor meets the Qualifying Relative tests: (1) She is Jennifer's mother
(relationship test—does not need to live with taxpayer), (2) Her gross income ($800 interest)
is below the 2025 limit ($5,050), and (3) Jennifer provided more than half of Eleanor's support
($15,000 vs. Eleanor's $800 income). B is incorrect because age and relationship tests for QC
fail. C is incorrect because gross income excludes nontaxable Social Security. D is incorrect
because parents are an exception to the member of household test for Qualifying Relatives.
Q5:
In the Block tax software, which of the following is considered a "Red Flag" for potential audit
risk that should trigger additional documentation review?
A. [CORRECT] A taxpayer claiming Head of Household status when the dependent is a
non-relative who lived with them for only 5 months.
B. A W-2 showing federal withholding of $5,000.
C. A taxpayer with dividend income reported on Schedule B.
D. A single taxpayer claiming the standard deduction.
,Rationale: Head of Household status requires that a qualifying person live with the taxpayer
for more than half the year (except for parents, who can live elsewhere). A non-relative must
be a member of the household for the entire year. This mismatch is a significant audit risk. B,
C, and D are normal tax situations that do not trigger audit flags.
Q6:
The Johnsons (Married Filing Jointly) have three children: ages 4, 10, and 17 (all lived with
them full-time). Their AGI is $85,000. Which child does NOT qualify for the Child Tax Credit
(CTC) in 2025?
A. The 4-year-old.
B. The 10-year-old.
C. [CORRECT] The 17-year-old.
D. All three qualify.
Rationale: The Child Tax Credit requires the child to be under age 17 at the end of the tax year.
The 17-year-old fails the age test (must be 16 or younger). However, the 17-year-old may
qualify for the Other Dependent Credit (ODC) of $500 if they meet dependency tests. A and B
meet all CTC requirements. D is incorrect because of the age limitation.
Q7:
Which of the following situations would require a taxpayer to file a tax return for 2025?
A. Single, under 65, gross income of $13,000.
B. Married Filing Jointly, both under 65, gross income of $28,000.
C. [CORRECT] Self-employed with net earnings of $450.
D. Single, 65 or older, gross income of $14,000.
Rationale: Self-employed individuals must file if net earnings are $400 or more to pay
self-employment tax. For 2025, the filing threshold for Single under 65 is $15,000 (A is below).
For MFJ under 65, it's $30,000 (B is below). For Single 65 or older, it's $16,550 (D is below).
Even though C is below the standard income threshold, the SE tax requirement triggers the
filing obligation.
Q8:
Your client, David, is divorced and has a 12-year-old son who lived with him for 205 nights
during the year. The son lived with his mother for the remaining 160 nights. According to the
Tie-Breaker Rules, who may claim the child as a dependent?
A. The parent with the higher AGI.
B. [CORRECT] David, because the child lived with him for more than half the year.
C. The mother, because she is the custodial parent by default.
D. Neither parent; they must alternate years.
Rationale: The custodial parent is defined as the parent with whom the child lived for the
greater number of nights during the year. David had 205 nights (>50%), making him the
custodial parent and the one entitled to claim the dependency (unless he releases the claim
, via Form 8332). A applies only if the child lived with each parent exactly equally (tie-breaker
for non-custodial situations). C is incorrect because custody is determined by nights, not
divorce decree alone. D describes a voluntary agreement, not tax law.
Q9:
In the H&R Block interview process, when preparing a return for a client who received a Form
1099-G for unemployment compensation, what is the critical verification step?
A. Verify that the state tax withheld was exactly 10% of the federal.
B. [CORRECT] Verify that the amount received matches the amount reported on the form and
confirm any repayments made.
C. Verify that the client was actually unemployed during the year stated.
D. Verify that the unemployment was from a government agency only.
Rationale: Unemployment compensation is taxable for federal purposes (though some states
exempt it). The Block interview process requires verifying the accuracy of the 1099-G amount
and determining if the client repaid any benefits during the year (which affects taxable
amount). A is incorrect because withholding rates vary. C, while part of client service, is not
the specific tax verification step. D is incorrect because all unemployment compensation is
reportable regardless of source.
Q10:
Taxpayer Linda is 25, single, has no dependents, and earned $28,000 in wages. She is eligible
for the Earned Income Credit (EIC). Which statement regarding the 2025 EIC is correct?
A. [CORRECT] Linda's investment income must be $11,600 or less to qualify.
B. Linda is eligible for the maximum EIC amount available to all filers.
C. Linda does not need to have a valid SSN to claim the EIC.
D. Linda can claim the EIC even if she is claimed as a dependent on another return.
Rationale: For 2025, the investment income limit for EIC eligibility is $11,600. B is incorrect
because the maximum EIC varies by number of qualifying children; Linda (no children)
receives a smaller credit. C is incorrect—all taxpayers and qualifying children must have valid
SSNs issued by the due date of the return (including extensions). D is incorrect because
taxpayers claimed as dependents cannot claim the EIC.
Q11:
Which of the following correctly describes the difference between a "Non-refundable" and a
"Refundable" tax credit in the Block tax software?
A. Non-refundable credits reduce SE tax; refundable credits reduce income tax only.
B. [CORRECT] Non-refundable credits can reduce tax liability to zero but not below; refundable
credits can generate a refund beyond tax paid.
C. Non-refundable credits carry forward; refundable credits never carry forward.
D. Non-refundable credits require Form 1116; refundable credits do not.
