H&R Block UPDATED ACTUAL Exam
Questions and CORRECT Answers
What types of 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 are some examples of income that must be reported on Schedule 1
(Form 1040) and then reported on Form 1040.
What are the adjustments that can be claimed on Schedule 1 (Form 1040)? - CORRECT
ANSWER - Some examples of adjustments that can be claimed on Schedule 1 are:
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 eligible educator.
Married taxpayers filing a joint return who are both eligible educators may each claim the $250
deduction, totaling $500.
Who is an eligible educator? - CORRECT ANSWER - Someone who worked at least 900
hours during the school year as a teacher, teacher's aide, counselor, or principal in an elementary
or secondary school.
,Where is the educator expense deduction reported? - CORRECT ANSWER - Educator
expenses are reported on Schedule 1, Additional Income and Adjustments to Income, line 10.
Who may not claim a student loan interest deduction? - CORRECT ANSWER - Someone
who is claimed as a dependent may not claim the deduction in the current tax year, nor may
someone who uses the married filing separately 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, provided the card was used exclusively to
pay for qualified expenses. Money borrowed from a related person is not a qualified student
loan.
What three requirements must be met for an individual to be claimed as either a qualifying child
or a qualifying relative? - CORRECT ANSWER - To be either a qualifying child or
qualifying relative, they must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of
Canada, or Mexico; they cannot file a joint return (unless solely to claim a refund of taxes paid);
and the taxpayer claiming the dependent must not be a dependent of another taxpayer.
What are the five tests for a qualifying child? - CORRECT ANSWER - 1. Relationship
test.
2. Age test.
3. Residency test.
4. Support test.
5. Joint return test.
How can a married individual meet the joint return test to remain a qualifying child? -
CORRECT ANSWER - They can meet this test by not filing a joint return with their
spouse, or they 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 might
include relatives, government programs, and the dependent's own income. If the taxpayer paid
more than one-half of the total support, they may claim the potential dependent as a qualifying
relative, if all the other requirements are met. If the potential 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 - 1. Not a qualifying child of someone else.
2. Relationship OR member of the household for the entire year.
3. Gross income.
4. Support.
How can the gross income test for a qualifying relative be satisfied? - CORRECT
ANSWER - The qualifying relative's gross income must be less than $4,300. When
determining the 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 to $3,000 per qualifying child ages 6 through 17.
What additional requirements 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 who is the taxpayer's dependent and who has not reached their 18th
birthday by the end of the year.
- Have a social security number valid for employment before the due date of the return.
Questions and CORRECT Answers
What types of 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 are some examples of income that must be reported on Schedule 1
(Form 1040) and then reported on Form 1040.
What are the adjustments that can be claimed on Schedule 1 (Form 1040)? - CORRECT
ANSWER - Some examples of adjustments that can be claimed on Schedule 1 are:
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 eligible educator.
Married taxpayers filing a joint return who are both eligible educators may each claim the $250
deduction, totaling $500.
Who is an eligible educator? - CORRECT ANSWER - Someone who worked at least 900
hours during the school year as a teacher, teacher's aide, counselor, or principal in an elementary
or secondary school.
,Where is the educator expense deduction reported? - CORRECT ANSWER - Educator
expenses are reported on Schedule 1, Additional Income and Adjustments to Income, line 10.
Who may not claim a student loan interest deduction? - CORRECT ANSWER - Someone
who is claimed as a dependent may not claim the deduction in the current tax year, nor may
someone who uses the married filing separately 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, provided the card was used exclusively to
pay for qualified expenses. Money borrowed from a related person is not a qualified student
loan.
What three requirements must be met for an individual to be claimed as either a qualifying child
or a qualifying relative? - CORRECT ANSWER - To be either a qualifying child or
qualifying relative, they must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of
Canada, or Mexico; they cannot file a joint return (unless solely to claim a refund of taxes paid);
and the taxpayer claiming the dependent must not be a dependent of another taxpayer.
What are the five tests for a qualifying child? - CORRECT ANSWER - 1. Relationship
test.
2. Age test.
3. Residency test.
4. Support test.
5. Joint return test.
How can a married individual meet the joint return test to remain a qualifying child? -
CORRECT ANSWER - They can meet this test by not filing a joint return with their
spouse, or they 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 might
include relatives, government programs, and the dependent's own income. If the taxpayer paid
more than one-half of the total support, they may claim the potential dependent as a qualifying
relative, if all the other requirements are met. If the potential 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 - 1. Not a qualifying child of someone else.
2. Relationship OR member of the household for the entire year.
3. Gross income.
4. Support.
How can the gross income test for a qualifying relative be satisfied? - CORRECT
ANSWER - The qualifying relative's gross income must be less than $4,300. When
determining the 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 to $3,000 per qualifying child ages 6 through 17.
What additional requirements 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 who is the taxpayer's dependent and who has not reached their 18th
birthday by the end of the year.
- Have a social security number valid for employment before the due date of the return.
