H&R BLOCK FINAL STUDY GUIDE 2026
COMPLETE QUESTIONS AND
ANSWERS.
⫸ What is the difference between injured spouse allocation and
innocent spouse relief? Answer: 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.
⫸ Is unemployment compensation taxable? Answer: Yes,
unemployment compensation is fully taxable.
⫸ Are scholarships and fellowships taxable? Answer: Sometimes.
Generally, scholarships and fellowships are excluded from income by
degree-seeking candidates to the extent that they are used to pay
qualified education expenses, such as tuition and course-related fees.
However, if they are used to pay for room and board or other
expenses, they are taxable.
⫸ What document will the taxpayer receive from their employer
reporting disability pension payments? Answer: The income is
reported on Form 1099-R.
,⫸ Under what circumstances can a disability pension qualify as
earned income for the EIC? Answer: Disability pension income
received before the taxpayer attains minimum retirement age for their
company is reported as wage income. It is also considered earned
income for purposes of EIC.
⫸ What types of income must be reported on Schedule 1 (Form
1040) and then reported on Form 1040? Answer: 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)? Answer: 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? Answer: Up to $250 per
eligible educator.
Married taxpayers filing a joint return who are both eligible educators
may each claim the $250 deduction, totaling $500.
⫸ Who is an eligible educator? Answer: Someone who worked at
least 900 hours during the school year as a teacher, teacher's aide,
counselor, or principal in an elementary or secondary school.
⫸ Where is the educator expense deduction reported? Answer:
Educator expenses are reported on Schedule 1, Additional Income and
Adjustments to Income, line 10.
⫸ Who may not claim a student loan interest deduction? Answer:
Someone who is claimed as a dependent may not claim the deduction
in the current tax year, nor may someone who uses the married filing
separately filing status. The amount of income a taxpayer earns may
also affect their deduction. Taxpayers whose modified AGI exceeds a
threshold amount for their filing status may not be able to claim the
deduction, or they may only be eligible to claim a reduced amount.
⫸ What is a qualified student loan? Answer: A loan used to pay
qualified education expenses. Credit card debt may be included,
provided the card was used exclusively to pay for qualified expenses.
Money borrowed from a related person is not a qualified student loan.
⫸ What three requirements must be met for an individual to be
claimed as either a qualifying child or a qualifying relative? Answer:
To be either a qualifying child or qualifying relative, they must be a
, U.S. citizen, U.S. resident alien, U.S. national, or a resident of
Canada, or Mexico; they cannot file a joint return (unless solely to
claim a refund of taxes paid); and the taxpayer claiming the dependent
must not be a dependent of another taxpayer.
⫸ What are the five tests for a qualifying child? Answer: 1.
Relationship test.
2. Age test.
3. Residency test.
4. Support test.
5. Joint return test.
⫸ 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 they can file a joint return with their
spouse if they are filing only to claim a refund of any taxes withheld.
⫸ How can you determine who paid more than half of a person's
support? Answer: First, determine the potential dependent's total
support. Then, that amount is reduced by the funds used by all sources
other than the taxpayer. Other sources of support might include
relatives, government programs, and the dependent's own income. If
the taxpayer paid more than one-half of the total support, they may
claim the potential dependent as a qualifying relative, if all the other
requirements are met. If the potential dependent paid more than one-
half of their own support, then no one else may claim them and they
are not a dependent.
COMPLETE QUESTIONS AND
ANSWERS.
⫸ What is the difference between injured spouse allocation and
innocent spouse relief? Answer: 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.
⫸ Is unemployment compensation taxable? Answer: Yes,
unemployment compensation is fully taxable.
⫸ Are scholarships and fellowships taxable? Answer: Sometimes.
Generally, scholarships and fellowships are excluded from income by
degree-seeking candidates to the extent that they are used to pay
qualified education expenses, such as tuition and course-related fees.
However, if they are used to pay for room and board or other
expenses, they are taxable.
⫸ What document will the taxpayer receive from their employer
reporting disability pension payments? Answer: The income is
reported on Form 1099-R.
,⫸ Under what circumstances can a disability pension qualify as
earned income for the EIC? Answer: Disability pension income
received before the taxpayer attains minimum retirement age for their
company is reported as wage income. It is also considered earned
income for purposes of EIC.
⫸ What types of income must be reported on Schedule 1 (Form
1040) and then reported on Form 1040? Answer: 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)? Answer: 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? Answer: Up to $250 per
eligible educator.
Married taxpayers filing a joint return who are both eligible educators
may each claim the $250 deduction, totaling $500.
⫸ Who is an eligible educator? Answer: Someone who worked at
least 900 hours during the school year as a teacher, teacher's aide,
counselor, or principal in an elementary or secondary school.
⫸ Where is the educator expense deduction reported? Answer:
Educator expenses are reported on Schedule 1, Additional Income and
Adjustments to Income, line 10.
⫸ Who may not claim a student loan interest deduction? Answer:
Someone who is claimed as a dependent may not claim the deduction
in the current tax year, nor may someone who uses the married filing
separately filing status. The amount of income a taxpayer earns may
also affect their deduction. Taxpayers whose modified AGI exceeds a
threshold amount for their filing status may not be able to claim the
deduction, or they may only be eligible to claim a reduced amount.
⫸ What is a qualified student loan? Answer: A loan used to pay
qualified education expenses. Credit card debt may be included,
provided the card was used exclusively to pay for qualified expenses.
Money borrowed from a related person is not a qualified student loan.
⫸ What three requirements must be met for an individual to be
claimed as either a qualifying child or a qualifying relative? Answer:
To be either a qualifying child or qualifying relative, they must be a
, U.S. citizen, U.S. resident alien, U.S. national, or a resident of
Canada, or Mexico; they cannot file a joint return (unless solely to
claim a refund of taxes paid); and the taxpayer claiming the dependent
must not be a dependent of another taxpayer.
⫸ What are the five tests for a qualifying child? Answer: 1.
Relationship test.
2. Age test.
3. Residency test.
4. Support test.
5. Joint return test.
⫸ 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 they can file a joint return with their
spouse if they are filing only to claim a refund of any taxes withheld.
⫸ How can you determine who paid more than half of a person's
support? Answer: First, determine the potential dependent's total
support. Then, that amount is reduced by the funds used by all sources
other than the taxpayer. Other sources of support might include
relatives, government programs, and the dependent's own income. If
the taxpayer paid more than one-half of the total support, they may
claim the potential dependent as a qualifying relative, if all the other
requirements are met. If the potential dependent paid more than one-
half of their own support, then no one else may claim them and they
are not a dependent.
