H&R Block Income Tax Course Questions and
Answers 100% Correct.
Due Diligence - correct Answers ✔✔ -Requirements that tax professionals must follow when preparing
oy oy oy oy oy oy oy oy oy oy oy oy oy
income tax returns.
oy oy oy
Estimated Tax - correct Answers ✔✔ -The amount of tax a taxpayer expects to owe for the year after
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
subtracting expected amounts withheld and certain refundable credits.
oy oy oy oy oy oy oy oy
Estimated Tax Voucher - correct Answers ✔✔ -A statement by an individual of (1) the amount of
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
income tax he estimates he will incur during the current taxable year on income that is not subject to
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
withholding, (2) the excess amount over that withheld on income which is subject to withholding, and
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
(3) his estimated self-employment tax.
oy oy oy oy oy
Exemption from Withholding - correct Answers ✔✔ -Status claimed on Form W-4 directing the
oy oy oy oy oy oy oy oy oy oy oy oy oy
employer not to withhold federal income taxes from the employee.
oy oy oy oy oy oy oy oy oy oy
Underpayment Penalty - correct Answers ✔✔ -If a taxpayer did not pay enough tax on a timely basis
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
during the year, he may be required to pay an underpayment penalty.
oy oy oy oy oy oy oy oy oy oy oy oy
Two Ways to Pay as You Go - correct Answers ✔✔ -Withholding and Estimated Tax Payments
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Form W-4 - correct Answers ✔✔ -Employee's Withholding Allowance Certificate
oy oy oy oy oy oy oy oy oy
Form 4868 - correct Answers ✔✔ -Application for Automatic Extension of Time To File U.S. Individual
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Income Tax Return
oy oy oy
Amended Return - correct Answers ✔✔ -A tax return filed on Form 1040X after the original return has
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
been filed.
oy oy
Closed Year - correct Answers ✔✔ -A tax year for which the statute of limitations has expired.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Open Year - correct Answers ✔✔ -A taxable year for which the statute of limitations has not yet
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
expired.
oy
Failure-to-File Penalty - correct Answers ✔✔ -Generally 5% for each month or part of a month the
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
return is late, but not more than 25% of the tax not paid.
oy oy oy oy oy oy oy oy oy oy oy oy oy
Failure to File - correct Answers ✔✔ -Taxpayer fails to file the return by the due date, and there is a
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
balance due.
oy oy
,Form 1040X - correct Answers ✔✔ -Amended U.S. Individual Income Tax Return
oy oy oy oy oy oy oy oy oy oy oy
When can an amended return be filed? - correct Answers ✔✔ -Within three years of the date the
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
original return was filed, or within two years of the date the tax was paid, whichever is later.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Can the 1040X be e-filed? - correct Answers ✔✔ -No.
oy oy oy oy oy oy oy oy oy
Portfolio Income and Losses - correct Answers ✔✔ -Those from such sources as dividends, interest,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
capital gains and losses, and royalties.
oy oy oy oy oy oy
Schedule E - correct Answers ✔✔ -Supplemental Income and Loss
oy oy oy oy oy oy oy oy oy
Royalty - correct Answers ✔✔ -Payments received for the right to extract natural resources from the
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
taxpayer's property or to use a taxpayer's literary, musical, or artistic creation.
oy oy oy oy oy oy oy oy oy oy oy oy
Annuity - correct Answers ✔✔ -A series of payments under a contract made at regular intervals over a
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
period of more than one year.
oy oy oy oy oy oy
Beneficiary - correct Answers ✔✔ -The owner or recipient of funds in an account, such as an IRA, or
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
from an insurance policy or will.
oy oy oy oy oy oy
Contribution - correct Answers ✔✔ -When a person puts money into a retirement plan. oy oy oy oy oy oy oy oy oy oy oy oy oy
Defined Benefit Plan - correct Answers ✔✔ -An employee benefit plan that provides determinable
oy oy oy oy oy oy oy oy oy oy oy oy oy
benefits not based on employer profits.
oy oy oy oy oy oy
Defined Contribution Plan - correct Answers ✔✔ -An employee benefit plan that provides a separate
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
account for each person covered and pays benefits based on account earnings.
oy oy oy oy oy oy oy oy oy oy oy oy
Disability Pension - correct Answers ✔✔ -A taxable pension from an employer-funded disability plan or
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
a disability provision of a retirement plan.
oy oy oy oy oy oy oy
Distribution - correct Answers ✔✔ -When a person takes or receives money from a retirement plan.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Pension - correct Answers ✔✔ -Generally a series of definitely determinable payments made to a
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
taxpayer after retirement from work.
oy oy oy oy oy
Rollover - correct Answers ✔✔ -A qualified transfer of funds from one tax-favored account to another,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
usually of the same type.
oy oy oy oy oy
Roth IRA - correct Answers ✔✔ -A type of individual retirement arrangement in which contributions are
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
not tax deductible, earnings grow tax deferred, and qualified withdrawals are tax free.
oy oy oy oy oy oy oy oy oy oy oy oy oy
Traditional IRA - correct Answers ✔✔ -An individual retirement arrangement, contributions to which
oy oy oy oy oy oy oy oy oy oy oy oy
may or may not be deductible depending on the taxpayer's AGI and whether or not he is covered under
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
an employer-sponsored retirement plan.
oy oy oy oy
, What is the full retirement age? - correct Answers ✔✔ -For workers born before 1938, it is 65. For those
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
born after it is gradually being increased to 67.
oy oy oy oy oy oy oy oy oy
How much of a client's social security and equivalent tier 1 RR benefits may be taxable? - correct
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Answers ✔✔ -Up to 85%.
oy oy oy oy oy
Form SSA-1099 - correct Answers ✔✔ -Social Security Benefits
oy oy oy oy oy oy oy oy
Form RRB-1099 - correct Answers ✔✔ -Railroad Retirement Benefits
oy oy oy oy oy oy oy oy
None of Social Security Benefits Taxable - correct Answers ✔✔ -Single, Head of Household, Qualified
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Widow - $0-$25,000; Married Filing Jointly - $0-$32,000
oy oy oy oy oy oy oy oy
Up to 50% of Social Security Benefits Taxable - correct Answers ✔✔ -Single, Head of Household,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Qualified Widow - $25,001-$34,000; Married Filing Jointly - $32,001-$44,000
oy oy oy oy oy oy oy oy oy
Up to 85% of Social Security Benefits Taxable - correct Answers ✔✔ -Single, Head of Household,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Qualified Widow - $34,001+; Married Filing Jointly - $44,001+; Married Filing Single - $1+
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Fully Taxable Pension - correct Answers ✔✔ -Pensions to which the taxpayer did not make after-tax
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
contributions or from which all pre-tax amounts have been recovered in previous years.
oy oy oy oy oy oy oy oy oy oy oy oy oy
Partly Taxable Pensions - correct Answers ✔✔ -Those pensions funded through employer plans to
oy oy oy oy oy oy oy oy oy oy oy oy oy
which the employee contributed some after-tax money.
oy oy oy oy oy oy oy
Form 1099-R - correct Answers ✔✔ -Distributions from Pensions, Annuities, Retirement, or Profit-
oy oy oy oy oy oy oy oy oy oy oy oy
Sharing Plans, IRAs, Insurance Contracts, Etc.
oy oy oy oy oy
Exceptions to the Early Withdrawal Penalty - correct Answers ✔✔ -01 - The distribution was made to an
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
employee who separated from service during or after the year in which they reached age 55.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
02 - The distribution is part of a series of substantially equal periodic payments, made at least annually
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
for the life of the participant or the life expenctancy of the participant.
oy oy oy oy oy oy oy oy oy oy oy oy oy
03 - The distribution was made due to permanent and total disability.
oy oy oy oy oy oy oy oy oy oy oy
04 - The distribution was made due to the death of the employee.
oy oy oy oy oy oy oy oy oy oy oy oy
05 - The distribution was made in a year that the taxpayer's medical expenses exceeds 7.5% of AGI.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
06 - The distribution was made to an alternate payee under a qualified domestic relations order.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
07 - The distribution was made in a year an unemployed taxpayer paid health insurance premiums.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
08 - The distribution was made to pay qualified higher education expenses for the taxpayer, spouse,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
their child, or their grandchild.
oy oy oy oy oy
Answers 100% Correct.
Due Diligence - correct Answers ✔✔ -Requirements that tax professionals must follow when preparing
oy oy oy oy oy oy oy oy oy oy oy oy oy
income tax returns.
oy oy oy
Estimated Tax - correct Answers ✔✔ -The amount of tax a taxpayer expects to owe for the year after
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
subtracting expected amounts withheld and certain refundable credits.
oy oy oy oy oy oy oy oy
Estimated Tax Voucher - correct Answers ✔✔ -A statement by an individual of (1) the amount of
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
income tax he estimates he will incur during the current taxable year on income that is not subject to
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
withholding, (2) the excess amount over that withheld on income which is subject to withholding, and
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
(3) his estimated self-employment tax.
oy oy oy oy oy
Exemption from Withholding - correct Answers ✔✔ -Status claimed on Form W-4 directing the
oy oy oy oy oy oy oy oy oy oy oy oy oy
employer not to withhold federal income taxes from the employee.
oy oy oy oy oy oy oy oy oy oy
Underpayment Penalty - correct Answers ✔✔ -If a taxpayer did not pay enough tax on a timely basis
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
during the year, he may be required to pay an underpayment penalty.
oy oy oy oy oy oy oy oy oy oy oy oy
Two Ways to Pay as You Go - correct Answers ✔✔ -Withholding and Estimated Tax Payments
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Form W-4 - correct Answers ✔✔ -Employee's Withholding Allowance Certificate
oy oy oy oy oy oy oy oy oy
Form 4868 - correct Answers ✔✔ -Application for Automatic Extension of Time To File U.S. Individual
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Income Tax Return
oy oy oy
Amended Return - correct Answers ✔✔ -A tax return filed on Form 1040X after the original return has
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
been filed.
oy oy
Closed Year - correct Answers ✔✔ -A tax year for which the statute of limitations has expired.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Open Year - correct Answers ✔✔ -A taxable year for which the statute of limitations has not yet
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
expired.
oy
Failure-to-File Penalty - correct Answers ✔✔ -Generally 5% for each month or part of a month the
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
return is late, but not more than 25% of the tax not paid.
oy oy oy oy oy oy oy oy oy oy oy oy oy
Failure to File - correct Answers ✔✔ -Taxpayer fails to file the return by the due date, and there is a
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
balance due.
oy oy
,Form 1040X - correct Answers ✔✔ -Amended U.S. Individual Income Tax Return
oy oy oy oy oy oy oy oy oy oy oy
When can an amended return be filed? - correct Answers ✔✔ -Within three years of the date the
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
original return was filed, or within two years of the date the tax was paid, whichever is later.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Can the 1040X be e-filed? - correct Answers ✔✔ -No.
oy oy oy oy oy oy oy oy oy
Portfolio Income and Losses - correct Answers ✔✔ -Those from such sources as dividends, interest,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
capital gains and losses, and royalties.
oy oy oy oy oy oy
Schedule E - correct Answers ✔✔ -Supplemental Income and Loss
oy oy oy oy oy oy oy oy oy
Royalty - correct Answers ✔✔ -Payments received for the right to extract natural resources from the
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
taxpayer's property or to use a taxpayer's literary, musical, or artistic creation.
oy oy oy oy oy oy oy oy oy oy oy oy
Annuity - correct Answers ✔✔ -A series of payments under a contract made at regular intervals over a
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
period of more than one year.
oy oy oy oy oy oy
Beneficiary - correct Answers ✔✔ -The owner or recipient of funds in an account, such as an IRA, or
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
from an insurance policy or will.
oy oy oy oy oy oy
Contribution - correct Answers ✔✔ -When a person puts money into a retirement plan. oy oy oy oy oy oy oy oy oy oy oy oy oy
Defined Benefit Plan - correct Answers ✔✔ -An employee benefit plan that provides determinable
oy oy oy oy oy oy oy oy oy oy oy oy oy
benefits not based on employer profits.
oy oy oy oy oy oy
Defined Contribution Plan - correct Answers ✔✔ -An employee benefit plan that provides a separate
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
account for each person covered and pays benefits based on account earnings.
oy oy oy oy oy oy oy oy oy oy oy oy
Disability Pension - correct Answers ✔✔ -A taxable pension from an employer-funded disability plan or
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
a disability provision of a retirement plan.
oy oy oy oy oy oy oy
Distribution - correct Answers ✔✔ -When a person takes or receives money from a retirement plan.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Pension - correct Answers ✔✔ -Generally a series of definitely determinable payments made to a
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
taxpayer after retirement from work.
oy oy oy oy oy
Rollover - correct Answers ✔✔ -A qualified transfer of funds from one tax-favored account to another,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
usually of the same type.
oy oy oy oy oy
Roth IRA - correct Answers ✔✔ -A type of individual retirement arrangement in which contributions are
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
not tax deductible, earnings grow tax deferred, and qualified withdrawals are tax free.
oy oy oy oy oy oy oy oy oy oy oy oy oy
Traditional IRA - correct Answers ✔✔ -An individual retirement arrangement, contributions to which
oy oy oy oy oy oy oy oy oy oy oy oy
may or may not be deductible depending on the taxpayer's AGI and whether or not he is covered under
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
an employer-sponsored retirement plan.
oy oy oy oy
, What is the full retirement age? - correct Answers ✔✔ -For workers born before 1938, it is 65. For those
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
born after it is gradually being increased to 67.
oy oy oy oy oy oy oy oy oy
How much of a client's social security and equivalent tier 1 RR benefits may be taxable? - correct
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Answers ✔✔ -Up to 85%.
oy oy oy oy oy
Form SSA-1099 - correct Answers ✔✔ -Social Security Benefits
oy oy oy oy oy oy oy oy
Form RRB-1099 - correct Answers ✔✔ -Railroad Retirement Benefits
oy oy oy oy oy oy oy oy
None of Social Security Benefits Taxable - correct Answers ✔✔ -Single, Head of Household, Qualified
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Widow - $0-$25,000; Married Filing Jointly - $0-$32,000
oy oy oy oy oy oy oy oy
Up to 50% of Social Security Benefits Taxable - correct Answers ✔✔ -Single, Head of Household,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Qualified Widow - $25,001-$34,000; Married Filing Jointly - $32,001-$44,000
oy oy oy oy oy oy oy oy oy
Up to 85% of Social Security Benefits Taxable - correct Answers ✔✔ -Single, Head of Household,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Qualified Widow - $34,001+; Married Filing Jointly - $44,001+; Married Filing Single - $1+
oy oy oy oy oy oy oy oy oy oy oy oy oy oy
Fully Taxable Pension - correct Answers ✔✔ -Pensions to which the taxpayer did not make after-tax
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
contributions or from which all pre-tax amounts have been recovered in previous years.
oy oy oy oy oy oy oy oy oy oy oy oy oy
Partly Taxable Pensions - correct Answers ✔✔ -Those pensions funded through employer plans to
oy oy oy oy oy oy oy oy oy oy oy oy oy
which the employee contributed some after-tax money.
oy oy oy oy oy oy oy
Form 1099-R - correct Answers ✔✔ -Distributions from Pensions, Annuities, Retirement, or Profit-
oy oy oy oy oy oy oy oy oy oy oy oy
Sharing Plans, IRAs, Insurance Contracts, Etc.
oy oy oy oy oy
Exceptions to the Early Withdrawal Penalty - correct Answers ✔✔ -01 - The distribution was made to an
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
employee who separated from service during or after the year in which they reached age 55.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
02 - The distribution is part of a series of substantially equal periodic payments, made at least annually
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
for the life of the participant or the life expenctancy of the participant.
oy oy oy oy oy oy oy oy oy oy oy oy oy
03 - The distribution was made due to permanent and total disability.
oy oy oy oy oy oy oy oy oy oy oy
04 - The distribution was made due to the death of the employee.
oy oy oy oy oy oy oy oy oy oy oy oy
05 - The distribution was made in a year that the taxpayer's medical expenses exceeds 7.5% of AGI.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
06 - The distribution was made to an alternate payee under a qualified domestic relations order.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
07 - The distribution was made in a year an unemployed taxpayer paid health insurance premiums.
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
08 - The distribution was made to pay qualified higher education expenses for the taxpayer, spouse,
oy oy oy oy oy oy oy oy oy oy oy oy oy oy oy
their child, or their grandchild.
oy oy oy oy oy
