DETAILED ANSWERS|LATEST UPDATE!!!!!!2026|GUARANTEED
CORRECT = 100
100
INCORRECT=0
STUDY MATERIALS.......DESIGNED TO HELP YOU SUCCEED
SPOTLIGHT 1
1
, WELL DETAILED ANSWERS|LATEST
UPDATE!!!!!!2026|GUARANTEED PASS|GRADED
What is the Difference between earned income and unearned income? -
ANSWER Earned income is received for services performed. Examples are wages
commissions, tips and generally farming and other business income . Taxable income other
than that received for services performed. Unearned Income includes money received ro the
investment of money or other property, such as interest, dividends, and royalties. It also
includes pensions alimony, unemployment compensation and other income that is not
earned
If an employee thinks their Form W2 is incorrect, what should they do? -
ANSWER Employee should discuss with employer who issued the document and
request a W2C. If no help from employer, notify IRS. Tax prepaper can then file a substitute.
What information do you need to know to determine whether a taxpayer is required to file a
return? - ANSWER Gross income, filing status, age and if they are a dependent
For tax purposes, when is a person's marital status determined? - ANSWER On the
last day of the tax year
Where on the tax form can you find the regular standard deduction amounts? -
ANSWER Line 22 on 1040A, In the left margin at the top of the page 2 of forms 1040
and 1040A. Look at actual form to look for line
How much is added to the standard deduction if the taxpayer (or spouse is age 65 or older,
or blind? - ANSWER $1550 if unmarried, $1250 if married
2
,What is the personal exemption amount for 2016? - ANSWER $4,050
What two amounts are combined to make up the gross income filing requirments for most
taxpayers? - ANSWER The standard deduction and the personal exemption amounts
Under what circumstances might a taxpayer be required to file a return even though they do
not meet the gross income filing requirements? - ANSWER 1. Has net employment
of $400 or more net self employment 2. You had unemployment income you owe medicare
Advantage MSA, receive HAS, Archer, MSA 3. Reeived an Advanced Premium Tax credit even
if they didn't otherwise have a filing requirment for the year *Tips, HSA, SE $400, PTC
What is the difference between injured spouse allocation and innocent spouse relief? -
ANSWER The difference between injured spouse and innocent spouse is significant
in the eyes of the IRS. Both release you from an income tax liability arising from a "married
filing jointly" return but different outcomes. Innocent spouse filed a joint return byt was
unaware that their spouse deliberately under reported tax liability. Injured spouse seeks to
protect his or her share of the refund in case it gets seized or offset due to the other
spouse's debts or unpaid obligations
CHAPTER 3: DEPENDENT EXEMPTIONS AND SUPPORT - ANSWER
What four requirements must be met for an individual to be claimed as a dependent -
ANSWER Must pass the dependent test, joint return test, citizenship, qualifying child
or relative
What are the five tests for a qualifying child? - ANSWER 1. Relationship 2. Age 3.
Residency 4. Support 5. Joint Return
How can a married individual meet the joint return test to remain a qualifying child? -
ANSWER They can meet this test by not filing a joint return with their spouse or
3
, they can file a joint return with their spouse if they are filing only to claim a refund on any
taxes withheld
How can you determine who paid more than half of a person's support? -
ANSWER Total support is determined and reduced by the funds received by and for
the person from all sources other than the taxpaer. The remaining support is considered to
be provided by the taxpayer. Other sources might include government support Worksheet
for Determining Support
What happens if an individual is a qualifying child of more than one taxpayer? -
ANSWER Generally, the custodial parent is the one in which the child spent the most
nights
What happens when more than one taxpayer claims the same qualifying child? -
ANSWER Tie Breaker Rules apply : 1. The parent, if only one of the persons is the
childs parent 2. The parent with whom the child lived the longest during the tax 3. The
parents with the highest AGI if no parent can claim the child as a qualifying child
What four tests must be met for an individual to be considered a qualifying relative? -
ANSWER 1. Not be a qualifying child, the person cannot be the taxpayers qualifying
child or the qualifying child of another taxpayer 2. Relationship: Child, brother, sister, step
sister, step brother, step father , step mother, in-laws 3. Gross Income: gross income must be
less than $4050 4. Support: Taxpayer must provide more than half the support
How can the gross income for a qualifying relative test be satisfied? - ANSWER Gross
income must be less than $4050 (Do not include tax exempt income)
What is the purpose of Form 2120 Multiple Support Declaration? - ANSWER You
only need 2120 multiple support declaration if you are claiming someone other than a
qualifying child as a dependent and there are two or more people including yourself who
provide support for the dependent
4
CORRECT = 100
100
INCORRECT=0
STUDY MATERIALS.......DESIGNED TO HELP YOU SUCCEED
SPOTLIGHT 1
1
, WELL DETAILED ANSWERS|LATEST
UPDATE!!!!!!2026|GUARANTEED PASS|GRADED
What is the Difference between earned income and unearned income? -
ANSWER Earned income is received for services performed. Examples are wages
commissions, tips and generally farming and other business income . Taxable income other
than that received for services performed. Unearned Income includes money received ro the
investment of money or other property, such as interest, dividends, and royalties. It also
includes pensions alimony, unemployment compensation and other income that is not
earned
If an employee thinks their Form W2 is incorrect, what should they do? -
ANSWER Employee should discuss with employer who issued the document and
request a W2C. If no help from employer, notify IRS. Tax prepaper can then file a substitute.
What information do you need to know to determine whether a taxpayer is required to file a
return? - ANSWER Gross income, filing status, age and if they are a dependent
For tax purposes, when is a person's marital status determined? - ANSWER On the
last day of the tax year
Where on the tax form can you find the regular standard deduction amounts? -
ANSWER Line 22 on 1040A, In the left margin at the top of the page 2 of forms 1040
and 1040A. Look at actual form to look for line
How much is added to the standard deduction if the taxpayer (or spouse is age 65 or older,
or blind? - ANSWER $1550 if unmarried, $1250 if married
2
,What is the personal exemption amount for 2016? - ANSWER $4,050
What two amounts are combined to make up the gross income filing requirments for most
taxpayers? - ANSWER The standard deduction and the personal exemption amounts
Under what circumstances might a taxpayer be required to file a return even though they do
not meet the gross income filing requirements? - ANSWER 1. Has net employment
of $400 or more net self employment 2. You had unemployment income you owe medicare
Advantage MSA, receive HAS, Archer, MSA 3. Reeived an Advanced Premium Tax credit even
if they didn't otherwise have a filing requirment for the year *Tips, HSA, SE $400, PTC
What is the difference between injured spouse allocation and innocent spouse relief? -
ANSWER The difference between injured spouse and innocent spouse is significant
in the eyes of the IRS. Both release you from an income tax liability arising from a "married
filing jointly" return but different outcomes. Innocent spouse filed a joint return byt was
unaware that their spouse deliberately under reported tax liability. Injured spouse seeks to
protect his or her share of the refund in case it gets seized or offset due to the other
spouse's debts or unpaid obligations
CHAPTER 3: DEPENDENT EXEMPTIONS AND SUPPORT - ANSWER
What four requirements must be met for an individual to be claimed as a dependent -
ANSWER Must pass the dependent test, joint return test, citizenship, qualifying child
or relative
What are the five tests for a qualifying child? - ANSWER 1. Relationship 2. Age 3.
Residency 4. Support 5. Joint Return
How can a married individual meet the joint return test to remain a qualifying child? -
ANSWER They can meet this test by not filing a joint return with their spouse or
3
, they can file a joint return with their spouse if they are filing only to claim a refund on any
taxes withheld
How can you determine who paid more than half of a person's support? -
ANSWER Total support is determined and reduced by the funds received by and for
the person from all sources other than the taxpaer. The remaining support is considered to
be provided by the taxpayer. Other sources might include government support Worksheet
for Determining Support
What happens if an individual is a qualifying child of more than one taxpayer? -
ANSWER Generally, the custodial parent is the one in which the child spent the most
nights
What happens when more than one taxpayer claims the same qualifying child? -
ANSWER Tie Breaker Rules apply : 1. The parent, if only one of the persons is the
childs parent 2. The parent with whom the child lived the longest during the tax 3. The
parents with the highest AGI if no parent can claim the child as a qualifying child
What four tests must be met for an individual to be considered a qualifying relative? -
ANSWER 1. Not be a qualifying child, the person cannot be the taxpayers qualifying
child or the qualifying child of another taxpayer 2. Relationship: Child, brother, sister, step
sister, step brother, step father , step mother, in-laws 3. Gross Income: gross income must be
less than $4050 4. Support: Taxpayer must provide more than half the support
How can the gross income for a qualifying relative test be satisfied? - ANSWER Gross
income must be less than $4050 (Do not include tax exempt income)
What is the purpose of Form 2120 Multiple Support Declaration? - ANSWER You
only need 2120 multiple support declaration if you are claiming someone other than a
qualifying child as a dependent and there are two or more people including yourself who
provide support for the dependent
4
