H&R BLOCK FINAL REVIEW 100%
Correct!!
Earned Income - ANSWERSincome is received for services performed. Includes wages, commissions, tips,
farming, and other business income
Unearned Income - ANSWERStaxable income that does not meet the definition of earned income.
Ex: interest income, dividends, rents and royalties, pensions, alimony, and unemployment income.
If an employee thinks their Form W-2 is incorrect, what should they do? - ANSWERSTaxpayer should
notify employer and request a corrected Form W-2 and have them update their records with Social
Secutiry Adminstration. Notify IRS if necessary.
Is interest received on U.S. Treasury Obligations taxable on state and /or local returns? - ANSWERSNo.
expempt by federal law
Is municipal bond interest taxable on a federal return? - ANSWERSNo. Govt does not tax.
How is interest income reported to the taxpayer? - ANSWERSForm 1099-INT or subsitute statment.
What information do you need to know to determine whether a nondependent taxpayer is required to
file a return? - ANSWERSFiling status, age at end of tax year, and gross income for the year.
When is a person's marital status determined? - ANSWERSOn the last day of the tax year or date of
death.
How much is added to the standard deduction if the taxpayer (or spouse) is age 65 or older or blind? -
ANSWERS1,350 for married taxpayers and qualifying window(er)s. 1,700 for single or head of household.
,What is the personal expemption amount for 2021? - ANSWERSNone for 2021. The Tax Cuts and Jobs Act
of 2017 repealed this deduction in beginning of 2018.
How is the gross income filing requirement determined for most nondependent taxpayers? -
ANSWERSThe taxpayer's standard deduction, including amounts for age. But for married filed separately
and married filed jointly who did not live together at the end of the year, the amount is $5.
What is the difference between injured spouse alloction and innocent spouse relief? - ANSWERS- Injured
spouse allocation for 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.
- 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? - ANSWERSYes, fully
Are scholarships and fellowships taxable? - ANSWERSSometimes. 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? -
ANSWERSForm 1099-R
Under what circumstances can a disability pension qualify as earned income for earned income credit
(EIC)? - ANSWERSDisability 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 on income must be reported on Schedule 1 (Form 1040) and then reported on Form 1040? -
ANSWERSGambling winnings, alimony, jury duty pay, canceled debts, and hobby income
What are the adjustments that can be claimed on Schdule 1 (Form 1040)? - ANSWERSEducator 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? - ANSWERSUp to $250 per educator. Married filing a joint return and are both elgible educators
can claim $250 each, totaling $500.
Who is an eligible educator? - ANSWERSWorked at least 900 hours during school year as teacher,
teacher's aide, counselor, or principal in an elementary or secondary school.
Where is the educator expense deduction reported? - ANSWERSSchedule 1, Additional Income and
Adjustments to Income, line 11.
Who may not claim a student loan interest deduction? - ANSWERSSomeone who is claimed as a
dependent and someone who uses the "married filing seperately" 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? - ANSWERSA loan used to pay qualified education expenses. Credit card
debt may be included if the card was used exclusively to pay for qualified expenses. Money borrowed
from a related person is not a qualified student loan.
What three requirments must be met for an individual to be claimed as either a qualifying child or a
qualifying relative? - ANSWERSU.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada, or
Mexico, cannot file a joint return (unless solely to claim a refund of taxes paid), taxpayer claiming
dependent must not be a dependent of another taxpayer.
What are the five tests for a qualifying child? - ANSWERSRelationship test, Age test, Residency test,
Support test, and Joint return test.
How can a married individual meet the joint return test to remain a qualifying child? - ANSWERSBy not
filing a joint return with their spouse, or can file a joint return with their spouse if they are filing only to
claim a refund of any taxes withheld.
Correct!!
Earned Income - ANSWERSincome is received for services performed. Includes wages, commissions, tips,
farming, and other business income
Unearned Income - ANSWERStaxable income that does not meet the definition of earned income.
Ex: interest income, dividends, rents and royalties, pensions, alimony, and unemployment income.
If an employee thinks their Form W-2 is incorrect, what should they do? - ANSWERSTaxpayer should
notify employer and request a corrected Form W-2 and have them update their records with Social
Secutiry Adminstration. Notify IRS if necessary.
Is interest received on U.S. Treasury Obligations taxable on state and /or local returns? - ANSWERSNo.
expempt by federal law
Is municipal bond interest taxable on a federal return? - ANSWERSNo. Govt does not tax.
How is interest income reported to the taxpayer? - ANSWERSForm 1099-INT or subsitute statment.
What information do you need to know to determine whether a nondependent taxpayer is required to
file a return? - ANSWERSFiling status, age at end of tax year, and gross income for the year.
When is a person's marital status determined? - ANSWERSOn the last day of the tax year or date of
death.
How much is added to the standard deduction if the taxpayer (or spouse) is age 65 or older or blind? -
ANSWERS1,350 for married taxpayers and qualifying window(er)s. 1,700 for single or head of household.
,What is the personal expemption amount for 2021? - ANSWERSNone for 2021. The Tax Cuts and Jobs Act
of 2017 repealed this deduction in beginning of 2018.
How is the gross income filing requirement determined for most nondependent taxpayers? -
ANSWERSThe taxpayer's standard deduction, including amounts for age. But for married filed separately
and married filed jointly who did not live together at the end of the year, the amount is $5.
What is the difference between injured spouse alloction and innocent spouse relief? - ANSWERS- Injured
spouse allocation for 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.
- 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? - ANSWERSYes, fully
Are scholarships and fellowships taxable? - ANSWERSSometimes. 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? -
ANSWERSForm 1099-R
Under what circumstances can a disability pension qualify as earned income for earned income credit
(EIC)? - ANSWERSDisability 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 on income must be reported on Schedule 1 (Form 1040) and then reported on Form 1040? -
ANSWERSGambling winnings, alimony, jury duty pay, canceled debts, and hobby income
What are the adjustments that can be claimed on Schdule 1 (Form 1040)? - ANSWERSEducator 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? - ANSWERSUp to $250 per educator. Married filing a joint return and are both elgible educators
can claim $250 each, totaling $500.
Who is an eligible educator? - ANSWERSWorked at least 900 hours during school year as teacher,
teacher's aide, counselor, or principal in an elementary or secondary school.
Where is the educator expense deduction reported? - ANSWERSSchedule 1, Additional Income and
Adjustments to Income, line 11.
Who may not claim a student loan interest deduction? - ANSWERSSomeone who is claimed as a
dependent and someone who uses the "married filing seperately" 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? - ANSWERSA loan used to pay qualified education expenses. Credit card
debt may be included if the card was used exclusively to pay for qualified expenses. Money borrowed
from a related person is not a qualified student loan.
What three requirments must be met for an individual to be claimed as either a qualifying child or a
qualifying relative? - ANSWERSU.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada, or
Mexico, cannot file a joint return (unless solely to claim a refund of taxes paid), taxpayer claiming
dependent must not be a dependent of another taxpayer.
What are the five tests for a qualifying child? - ANSWERSRelationship test, Age test, Residency test,
Support test, and Joint return test.
How can a married individual meet the joint return test to remain a qualifying child? - ANSWERSBy not
filing a joint return with their spouse, or can file a joint return with their spouse if they are filing only to
claim a refund of any taxes withheld.
