HR BLOCK FINAL TEST (ITC 2024) ACTUAL EXAM QUESTIONS WITH CORRECT ANSWERS AND RATIONALES UPDATED 2024/2025 | 100% Verified.

HR BLOCK FINAL TEST (ITC 2024) ACTUAL EXAM QUESTIONS WITH CORRECT ANSWERS AND RATIONALES UPDATED 2024/2025 | 100% Verified. A tax returner or claim for refund requiring a paid tax return preparer to determine eligibility for EITC, CTC/ODC/ ACTC, AOTC, and the head of household filling status may be subject to a maximum penalty, totaling what amount for failure to meet due diligence requirements if all four are claimed on a single tax return? - ANSWERa,$2,120 the deduction for state and local income taxes is limited to what amount? - ANSWER-a. $10,000 ($5,000 if MFS). A married couple who materially participate in the operation of a jointly owned business may elect for each spouse to file their own Schedule C, with each reporting their respective amounts of income, loss, and deductions. This known as what? - ANSWERC. A qualified joint venture Stock owned by an individual would be classified as what type of property? - ANSWERa. Intangible personal, investment -use property Which of the following is not deductible on Schedule A? - ANSWER-C. Federal taxes withheld. Which of the following types of property may be depreciated? - ANSWER-d. a copier purchased by a tax preparation office. a taxpayer who actively participates in a rental real estate activity may, in many cases, deduct up to what amount of rental losses against any other kind of income? - ANSWER-a. 25,000 A sole proprietor who computes self-employment tax should be filling what form? - ANSWER-b. Schedule SE. An employee tells their employer how much income tax to withold from their taxable wages by completing what form? - ANSWER-C. Form W-4. The IRS may assess penalties on taxpayers for which of the folllowing? - ANSWER-d. All of the Above Which of the following best describes gross income? - ANSWER-a. all income from whatever source derived, unless excluded from taxation by law Which of the following best describes earned income? - ANSWER-c. Income received for services, performed, including wages, commissions, tips, and generally, farming and other business income. HR BLOCK FINAL TEST (ITC 2024) ACTUAL EXAM QUESTIONS WITH CORRECT ANSWERS AND RATIONALES UPDATED 2024/2025GRADED A+ Which of the following taxpayers is not required to file a federal tax return for 2019? - ANSWER-d. Ron (66) and sue (64) have gross income of $ 25,250. they wish to file a joint return In 2019, Jennfier's (27) brother, jim (18), her fiancee Steve(29) and her daughter, Kim (5) lived with her for the entire year. Jennfier's AGI is $27,800, Jim's AGI is $5,050, Steve AGI is $4,0050, and Kim had no icome. Jim and Kim did not provide over 50% of steve's support. Jennifer quailties and files as head of household in 2019. How many qualifying dependents can jennfier claim on her return? - ANSWER-c. Three Which of the following items is included in federal gross income? - ANSWER-d. Unemployment compensation. Which of the following items is not included in federal gross income? - ANSWER-B. Federal income tax refunds Which of the following taxpayers is not required to file a federal income tax return for 2019? - ANSWER-b. Elizabeth (68) has gross income of $12,250. she is single and has no dependents Mike is single and has a taxable income of $17,405. His amount of tax from the 2019 Tax tables is - ANSWER-c. $1,897. Adrian is married filing separatly, and has a taxable income of $26,100. His amount of tax from the 2019 tax tables is - ANSWER-c. $2,941. Which of the following is not one of the five quailfying child tests a taxpayer must meet their child to be considered their dependent? - ANSWER-a. Gross income test. Marissa and lucius were married 18 years ago. They had one child, Matthew (13.) luciuis pased away in 2015. Marissa did not remary. Marissa and mathhew lived together all year long, and no one else lived with them. Matthew had no income in 2019. Marissa paid 100% of the cost of the maintaining their home. What is the most benefical 2019 filing status for Marissa? - ANSWER-a. Head of household. Brian had dividened income reported on Form 1099-DIV. Brian would be required to file a form 1040, schedule B, when his dividened income exceeds of which of the following households? - ANSWER-b. $1,500. Which of the following taxpayers is not required does not quailfy to deduct qualified educator expenses? - ANSWER-C. Gaylene is a high school substitute teacher in her local school district. She worked 1,040 hours in 2019. She speny $590 home schooling, her fifth- grade daughter jodie. She spent $230 on supplies used in various classrooms. she reimbursed for the supplies. What is the maximum deduction allowed for quailifed student loan interest? - ANSWERb. $2,500. Which of the following expenses quailifies for an education credit in 2019? - ANSWERa. tutition payments?, the taxpayer didn't receive scholarships, grants, or other nontaxable benefiets Which of the following taxpayers is not able to claim the Child and Dependent Care Credit? - ANSWER-c. Sideny and Stella Anderson have a dependent daughter, Andera (8). Sideny works full-time, and Stella is extensively involved in charity work. They paid the Daily Child Care Center to take care of Andrea while Stella volunterred for various charitable organizations. What is the maximum amount of the America Opportunity Tax Credit a taxpayer could receive? - ANSWER-d. $2,500 The Child and the Dependent Care Credit? - ANSWER-d. Never completely phases out. What is the maximum amount of the lifetime learning credit? - ANSWER-C. $2,000 per return Nakita was born in 1957. Based on her year of birth, when would Nakita reach full retirement age for social security benefits? - ANSWER-d. 66 years and 6 months. Which of the following is not a percentage of social security benefits subject to federal tax up to: - ANSWER-d. 100% when a taxpayer receives Form 1099-R with no amount entered box 2a and code 7 entered in box 7, the entire distrubtion: - ANSWER-a. Could be taxable. if a taxpayer rents a portion of their personal residence, can they deduct mortgage interest as ar expense on Schedule E? - ANSWER-the rental portion of this expense can be deducted A taxpayer who receives income from a partnership will receive: - ANSWER-c. Schedule K-1 An active participant with modified AGI below the limit may deduct rental losses up to: - ANSWER-b. 25,000 The fact that an employee is having taxes withheld from their paycheck does not guarantee that tax liability will be covered. what factor could cause an employee to have a withholding shortfall a the end of the year? - ANSWER-Additional income is earned from self-employmeny Which of the following describes a situation where a taxpayer may need to do a ''paycheck checkup? - ANSWER-Marley and Derick are married and life jointly. they both work.. The couple had twin sons this year. Under what circumstances may an employee claim exemption from withholding? - ANSWER-If the employee had no federal income tax liability for the prior year, and they expect to have no tax liability for the current year. Which of the following tests is not one of the first three dependent requirements? - ANSWER-B. joint return Which of the following tests is not one of the first three dependent requirements? - ANSWER-d. Taxpayer must have provided over 50% of potential dependent's support. Which of the following tests is not one that must be met for a dependent to be a taxpayer's quailfying child? - ANSWER-B. Gross Income Can the taxpayer's aunt be a qualifying relative (QR) if she did not live with the taxpayer's at all during the year, if all other QR tests are met? - ANSWER-B. yes. She passess the relationships part the test Sam (230 is single. he worked full-time one semester and attended classess one semester of 2019. He is fred's son and lived with Fred. What qualifying child (QC) test still needs to be asked? - ANSWER-D. Support. Which of the following is included in support? - ANSWER-A. Life Insurance Premiums Which of the following dependents, who are claimed as quailfying relatives and lived with the taxpayer all year, do not quailfy an unmarried taxpayer for the head of household filing status? - ANSWER-C. Cousin Which of the following quailfying relatives does not have to live with the unmarried taxpayer to qualify them for the head of household filing status? - ANSWER-B. Parent Michelle married to Brian. Michelle has not spoken to him for 15 years., which of the following filing statuses can be ruled out for michelle to use? - ANSWER-D. Single. Which of the following tax benefits will not travel to the noncoustdial parent when using the rules for divorced or separated parents? - ANSWER-B. Head of Household filing status. Which of the following statements about the (ACTC) is true? The ACTC is - ANSWERB. A refundable credit. What is the preparer penalty for failure to meet due diligence requirements? - ANSWER-C. $530 for each failure, per credit, on each return. Which of the following is not one of the rules for anyone wanting to claim the EICTc? - ANSWER-B. A. Earned income is only allowed from wages, tips and salaries. Which of the following single taxpayers may be able to claim the EITC? - ANSWER-C. Cindy age 26, is a u.s citizen and has earned income of $13,980. The maximum amount of social security income that may be taxed is: - ANSWER-C. 85%. Tier 1 railroad retirement benefits are reported on: - ANSWER-A. Form RRB- 1099 Which of the following is not a requirement to use the simplified method? - ANSWER-D. The pension was received before 1996. Distriubutions from traditional IRAs are not taxable: - ANSWER-D. to the extent the distrubution represents return of nondeductible contributions. Taxpayers who made a nondeductible contributions to a traditional IRA calculate the taxable amount of a distribution: - ANSWER-D.Using from 8606. Which of the following is not a valid accounting period? - ANSWER-C. Perodic Tax year. Which of the following is not a part of schedule C? - ANSWER-B. Information on your vehicle Which of the following is not a part of schedule C? - ANSWER-D. self-employment tax. To be deductible, a business expense must be: - ANSWER-C. both A and B To be deductible a business expense must be; - ANSWER-C. Both A or B You sold your bicylce at a $50 loss. Your school laptop at a $100 loss, and your business cell phone at a $200 loss. What is your deductible loss? - ANSWER-C.$200. When preparing a tax return for a self-employed person, which of the following forms would typically not be used? - ANSWER-D. Schedule SE. Geraldine purchased a new lawnmowner for $1,000. She uses it 90% for her landscaping business and 10% on her own lawn. What isn its depreciable basis? - ANSWER-B. $900. If a taxpayer has a capitial gain on quailfied small business stock, the stock, must be helkd a certain amount of time in order to exclude some or all of the gain. what years? - ANSWER-C. 5. The MACRS GDS recovery period for residential rental property is: - ANSWER-A. 27.5 years. Taxpayers may begin depreciating qualifying assets on which of the following data - ANSWER-b. Date the asset is placed in service. Which of the following methods would be most benefical to a taxpayer who expects her income to increase susbtantally, in later years? - ANSWER-C, Straight line. The failure -to-file penalty is assessed on which of the following 2019 returns? - ANSWER-a, Balance due, return due april 15, 2020, but not filed until december 15, 2020 with an extension A taxpayer filed form 4868 on april 15, 2020, and submitted their $897 balance due return to the IR on October 15, 2020. They did not submit any payment with Form 4868 . which penalty applies? - ANSWER-B, Failure to pay.