H&R Block Final Review UPDATED Exam
Questions and CORRECT Answers
What types on income must be reported on Schedule 1 (Form 1040) and then reported on Form
1040? - CORRECT ANSWER - Gambling winnings, alimony, jury duty pay, canceled
debts, and hobby income
What are the adjustments that can be claimed on Schdule 1 (Form 1040)? - CORRECT
ANSWER - 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? - CORRECT ANSWER - Up 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? - CORRECT ANSWER - Worked 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? - CORRECT ANSWER - Schedule 1,
Additional Income and Adjustments to Income, line 11.
Who may not claim a student loan interest deduction? - CORRECT ANSWER - Someone
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? - CORRECT ANSWER - A 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? - CORRECT ANSWER - U.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? - CORRECT ANSWER - Relationship 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? -
CORRECT ANSWER - By 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.
How can you determine who paid more than half of a person's support? - CORRECT
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:
relatives, government programs, and the dependent's own income. If the taxpayer paid more than
one-half of the total support, they may claim as a qualifying relative, if all the other requirements
are met. If the dependent paid more than one-half of their own support, then no one else may
claim them and they are not a dependent.
What four tests must be met for an individual to be considered a qualifying relative? -
CORRECT ANSWER - Not a qualifying child of someone else, Relationship OR member
of the household for the entire year, Gross income, and Support.
How can the gross income test for a qualifying relative be satisfied? - CORRECT
ANSWER - qualifying relative's gross income must be less than $4,300. Not included in
gross income: tax-exempt income, such as certain social security benefits, is not included.
What is the purpose of Form 2120, Multiple Support Declaration? - CORRECT
ANSWER - If two or more persons combined provided over one-half of a person's
, support, they may together agree to allow any one of them who contributed at least 10% of the
support to claim the exemption. A statement waiving the right to claim the dependency
exemption should be signed by each contributor who is not claiming the exemption, and retained
by the one who is. Form 2120 is attached to the return of the taxpayer claiming the exemption.
How much is the Child Tax Credit worth? - CORRECT ANSWER - Up to $3,600 per
qualifying child under age 6 and up. Up to $3,000 per qualifying child ages 6 through 17.
What additional requirments must be met for a taxpayer to be eligible to claim the Child Tax
Credit for their qualifying child? - CORRECT ANSWER - The child must: Be a qualifying
child and not reach their 18th birthday by end of the year, have valid SSN, be a citizen, national,
or US resident
Is the Child Tax Credit refundable or nonrefundable? - CORRECT ANSWER - Full
refundable mostly. However, certain taxpayers may qualify for the Additional Child Tax Credit,
which is refundable.
How much is the penalty if a paid preparer fails to meet the Child Tax Credit due diligence
requirments? - CORRECT ANSWER - $545 on one taxpayer's return.
What is the first due diligence requirement for the CTC/ODC and how does a paid preparer meet
this requirement? - CORRECT ANSWER - Complete and submit Form 8867, Paid
Preparer's Earned Income Credit Checklist by the preparer.
One Form 8867 must be submitted with every e-filed or paper-filed return (original and/or
amended) for every taxpayer who claims the EIC, CTC/ODC/ACTC, AOTC, and/or uses the
head of household filing status.
What filing statuses are available to taxpayers who are unmarried? - CORRECT
ANSWER - Qualifying widow(er), head of household, and single.
How may a married taxpayer qualify as unmarried for tax purposes? - CORRECT
ANSWER - For the purpose of claiming the head of household filing status, a taxpayer
must: Not file a joint return with their spouse, Provide more than half the cost of maintaining
their home, The home must be the main home for the taxpayer and their dependent child (or
Questions and CORRECT Answers
What types on income must be reported on Schedule 1 (Form 1040) and then reported on Form
1040? - CORRECT ANSWER - Gambling winnings, alimony, jury duty pay, canceled
debts, and hobby income
What are the adjustments that can be claimed on Schdule 1 (Form 1040)? - CORRECT
ANSWER - 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? - CORRECT ANSWER - Up 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? - CORRECT ANSWER - Worked 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? - CORRECT ANSWER - Schedule 1,
Additional Income and Adjustments to Income, line 11.
Who may not claim a student loan interest deduction? - CORRECT ANSWER - Someone
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? - CORRECT ANSWER - A 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? - CORRECT ANSWER - U.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? - CORRECT ANSWER - Relationship 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? -
CORRECT ANSWER - By 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.
How can you determine who paid more than half of a person's support? - CORRECT
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:
relatives, government programs, and the dependent's own income. If the taxpayer paid more than
one-half of the total support, they may claim as a qualifying relative, if all the other requirements
are met. If the dependent paid more than one-half of their own support, then no one else may
claim them and they are not a dependent.
What four tests must be met for an individual to be considered a qualifying relative? -
CORRECT ANSWER - Not a qualifying child of someone else, Relationship OR member
of the household for the entire year, Gross income, and Support.
How can the gross income test for a qualifying relative be satisfied? - CORRECT
ANSWER - qualifying relative's gross income must be less than $4,300. Not included in
gross income: tax-exempt income, such as certain social security benefits, is not included.
What is the purpose of Form 2120, Multiple Support Declaration? - CORRECT
ANSWER - If two or more persons combined provided over one-half of a person's
, support, they may together agree to allow any one of them who contributed at least 10% of the
support to claim the exemption. A statement waiving the right to claim the dependency
exemption should be signed by each contributor who is not claiming the exemption, and retained
by the one who is. Form 2120 is attached to the return of the taxpayer claiming the exemption.
How much is the Child Tax Credit worth? - CORRECT ANSWER - Up to $3,600 per
qualifying child under age 6 and up. Up to $3,000 per qualifying child ages 6 through 17.
What additional requirments must be met for a taxpayer to be eligible to claim the Child Tax
Credit for their qualifying child? - CORRECT ANSWER - The child must: Be a qualifying
child and not reach their 18th birthday by end of the year, have valid SSN, be a citizen, national,
or US resident
Is the Child Tax Credit refundable or nonrefundable? - CORRECT ANSWER - Full
refundable mostly. However, certain taxpayers may qualify for the Additional Child Tax Credit,
which is refundable.
How much is the penalty if a paid preparer fails to meet the Child Tax Credit due diligence
requirments? - CORRECT ANSWER - $545 on one taxpayer's return.
What is the first due diligence requirement for the CTC/ODC and how does a paid preparer meet
this requirement? - CORRECT ANSWER - Complete and submit Form 8867, Paid
Preparer's Earned Income Credit Checklist by the preparer.
One Form 8867 must be submitted with every e-filed or paper-filed return (original and/or
amended) for every taxpayer who claims the EIC, CTC/ODC/ACTC, AOTC, and/or uses the
head of household filing status.
What filing statuses are available to taxpayers who are unmarried? - CORRECT
ANSWER - Qualifying widow(er), head of household, and single.
How may a married taxpayer qualify as unmarried for tax purposes? - CORRECT
ANSWER - For the purpose of claiming the head of household filing status, a taxpayer
must: Not file a joint return with their spouse, Provide more than half the cost of maintaining
their home, The home must be the main home for the taxpayer and their dependent child (or
