H&R Block Final Review Questions And
Answers With Verified Solutions Already
Passed !!!
Q: What is the difference between earned income and unearned income?
A:
Earned income is money received for services performed. This includes wages,
commissions, tips, farming income, and business profits.
Unearned income refers to income that does not come from work or services.
Examples include interest, dividends, rent, royalties, pensions, alimony, and
unemployment compensation.
Q: If an employee thinks their Form W-2 is incorrect, what should they do?
A:
If there are errors in name, social security number, or income amounts, the
employee should contact their employer to request a corrected Form W-2. The
employer should update their records and verify the details with the Social Security
Administration. The taxpayer is still responsible for filing a timely return. If the
employer fails to provide a corrected W-2, the taxpayer should notify the IRS and
may need to file a substitute Form W-2.
Q: What information do you need to know to determine whether a taxpayer is
required to file a return?
A:
To determine if a taxpayer needs to file, you must know their marital status, age at
the end of the year, total gross income, and whether they are claimed as a
dependent by someone else.
Q: Where on Form 1040 can you find the regular standard deduction
amounts?
A:
The standard deduction amounts are listed in the left-hand margin of page 1 on
Form 1040. For 2019, the amounts are:
Single or married filing separately: $12,200
Married filing jointly or qualifying widow(er): $24,400
Head of household: $18,350
Q: How much is added to the standard deduction if the taxpayer (or spouse) is
age 65 or older, or blind?
,A:
An additional $1,300 is added for married taxpayers and qualifying widow(er)s, or
$1,650 for unmarried taxpayers, for each condition of age 65 or older, or blind.
Q: What is the personal exemption amount for 2019?
A:
There is no personal exemption for 2019, as the Tax Cuts and Jobs Act of 2017
eliminated it starting in 2018.
Q: How is the gross income filing requirement determined for most
taxpayers?
A:
The requirement is based on the taxpayer’s standard deduction, including any
additional amounts for age or blindness. For taxpayers filing as Married Filing
Separately (MFS), the gross income filing requirement is $5.
Q: What is the difference between injured spouse allocation and innocent
spouse relief?
A:
Injured spouse allocation allows a taxpayer to protect their share of a refund if their
spouse owes past-due federal taxes, student loans, or other debts.
Innocent spouse relief applies to taxpayers who filed jointly but later find that their
spouse misstated income or deductions, and they seek relief from responsibility for
that error.
Q: What is a thorough interview?
A:
A thorough interview involves asking basic information questions and then asking
follow-up questions to address any missing, unclear, or inconsistent details.
Q: What is a conflict of interest?
A:
According to Circular 230, a conflict of interest exists if representing one client
will adversely affect another client, or if the practitioner's personal interests or
responsibilities to another client limit their ability to represent a client effectively.
Q: What actions can resolve a conflict of interest?
A:
A conflict of interest is resolved by acknowledging it, disclosing it to all relevant
parties, and obtaining consent from all parties to waive the conflict.
, Q: What taxpayer information is confidential?
A:
Confidential taxpayer information includes any details that can identify the
taxpayer, such as name, address, Social Security number, place of employment,
and any information from tax returns.
Q: What is a tax preparer's responsibility upon finding out that a taxpayer
has not complied with one or more tax laws?
A:
A tax preparer must inform the taxpayer of the noncompliance and the
consequences. However, only the taxpayer can decide whether to make the
necessary corrections.
Q: What action should a tax preparer take if a taxpayer insists on reporting
information that is inaccurate?
A:
A tax preparer must refuse to sign or assist in filing a return if it contains clearly
inaccurate information.
Q: What are the five tests for a qualifying child?
A:
1. Relationship test
2. Age test
3. Residency test
4. Support test
5. Joint return test
Q: How can a married individual meet the joint return test to remain a
qualifying child?
A:
They can meet this test by either not filing a joint return with their spouse or by
filing jointly but only to claim a refund of any taxes withheld.
Q: How can you determine who paid more than half of a person's support?
A:
The total support amount is reduced by contributions from other sources, such as
relatives, government programs, or the dependent's income.
Answers With Verified Solutions Already
Passed !!!
Q: What is the difference between earned income and unearned income?
A:
Earned income is money received for services performed. This includes wages,
commissions, tips, farming income, and business profits.
Unearned income refers to income that does not come from work or services.
Examples include interest, dividends, rent, royalties, pensions, alimony, and
unemployment compensation.
Q: If an employee thinks their Form W-2 is incorrect, what should they do?
A:
If there are errors in name, social security number, or income amounts, the
employee should contact their employer to request a corrected Form W-2. The
employer should update their records and verify the details with the Social Security
Administration. The taxpayer is still responsible for filing a timely return. If the
employer fails to provide a corrected W-2, the taxpayer should notify the IRS and
may need to file a substitute Form W-2.
Q: What information do you need to know to determine whether a taxpayer is
required to file a return?
A:
To determine if a taxpayer needs to file, you must know their marital status, age at
the end of the year, total gross income, and whether they are claimed as a
dependent by someone else.
Q: Where on Form 1040 can you find the regular standard deduction
amounts?
A:
The standard deduction amounts are listed in the left-hand margin of page 1 on
Form 1040. For 2019, the amounts are:
Single or married filing separately: $12,200
Married filing jointly or qualifying widow(er): $24,400
Head of household: $18,350
Q: How much is added to the standard deduction if the taxpayer (or spouse) is
age 65 or older, or blind?
,A:
An additional $1,300 is added for married taxpayers and qualifying widow(er)s, or
$1,650 for unmarried taxpayers, for each condition of age 65 or older, or blind.
Q: What is the personal exemption amount for 2019?
A:
There is no personal exemption for 2019, as the Tax Cuts and Jobs Act of 2017
eliminated it starting in 2018.
Q: How is the gross income filing requirement determined for most
taxpayers?
A:
The requirement is based on the taxpayer’s standard deduction, including any
additional amounts for age or blindness. For taxpayers filing as Married Filing
Separately (MFS), the gross income filing requirement is $5.
Q: What is the difference between injured spouse allocation and innocent
spouse relief?
A:
Injured spouse allocation allows a taxpayer to protect their share of a refund if their
spouse owes past-due federal taxes, student loans, or other debts.
Innocent spouse relief applies to taxpayers who filed jointly but later find that their
spouse misstated income or deductions, and they seek relief from responsibility for
that error.
Q: What is a thorough interview?
A:
A thorough interview involves asking basic information questions and then asking
follow-up questions to address any missing, unclear, or inconsistent details.
Q: What is a conflict of interest?
A:
According to Circular 230, a conflict of interest exists if representing one client
will adversely affect another client, or if the practitioner's personal interests or
responsibilities to another client limit their ability to represent a client effectively.
Q: What actions can resolve a conflict of interest?
A:
A conflict of interest is resolved by acknowledging it, disclosing it to all relevant
parties, and obtaining consent from all parties to waive the conflict.
, Q: What taxpayer information is confidential?
A:
Confidential taxpayer information includes any details that can identify the
taxpayer, such as name, address, Social Security number, place of employment,
and any information from tax returns.
Q: What is a tax preparer's responsibility upon finding out that a taxpayer
has not complied with one or more tax laws?
A:
A tax preparer must inform the taxpayer of the noncompliance and the
consequences. However, only the taxpayer can decide whether to make the
necessary corrections.
Q: What action should a tax preparer take if a taxpayer insists on reporting
information that is inaccurate?
A:
A tax preparer must refuse to sign or assist in filing a return if it contains clearly
inaccurate information.
Q: What are the five tests for a qualifying child?
A:
1. Relationship test
2. Age test
3. Residency test
4. Support test
5. Joint return test
Q: How can a married individual meet the joint return test to remain a
qualifying child?
A:
They can meet this test by either not filing a joint return with their spouse or by
filing jointly but only to claim a refund of any taxes withheld.
Q: How can you determine who paid more than half of a person's support?
A:
The total support amount is reduced by contributions from other sources, such as
relatives, government programs, or the dependent's income.
