H&R Block Final Review Exam 2025
Questions and Answers
What is the difference between earned income and unearned income? - --
Answer --Earned income is received for services performed. Some examples
of earned income include wages, commissions, tips, farming, and other business
income.
Unearned income is taxable income that does not meet the definition of earned
income. Examples of unearned income include 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? - --
Answer --If the taxpayer's name, social security number, or earnings or
withholdings are incorrect, the taxpayer should notify their employer and request a
corrected Form W-2. The employee should request that the employer update their
records and verify that the earnings were properly credited with the Social Security
Administration. However, the taxpayer is still responsible for filing a timely tax
return. If the employee's attempts to obtain a corrected Form W-2 from their
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,employer are not successful, the taxpayer should notify the IRS. It may be
necessary to prepare a substitute Form W-2.
What information do you need to know to determine whether a taxpayer is
required to file a return? - --Answer --The taxpayer's marital status, age at the
end of the tax year, gross income for the year, and if the taxpayer is a dependent.
Where on Form 1040 can you find the regular standard deduction amounts? - --
Answer --In the left-hand margin on page 1 of Form 1040. They are: single
and married filing separately, $12,200; married filing jointly and qualifying
widow(er), $24,400; and head of household, $18,350.
How much is added to the standard deduction if the taxpayer (or spouse) is age 65
or older, or blind? - --Answer --$1,300 for married taxpayers and qualifying
widow(er)s, or $1,650 for all other unmarried taxpayers, is added for each
condition.
What is the personal exemption amount for 2019? - --Answer --There is no
personal exemption for 2019. A personal exemption was an amount previously
allowed by law to reduce income that would otherwise be taxed. The Tax Cuts and
Jobs Act of 2017 repealed this deduction beginning in 2018.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
,How is the gross income filing requirement determined for most taxpayers? - --
Answer --The taxpayer's standard deduction, including the additional
amounts for age and blindness. However, for MFS, the amount is $5.
What is the difference between injured spouse allocation and innocent spouse
relief? - --Answer --The IRS provides an injured spouse allocation for the
taxpayer to protect their portion of a refund from a spouse's past-due federal
income tax, unpaid student loans, or unpaid child and spousal support, or state
income tax.
The IRS provides 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.
What is a thorough interview? - --Answer --A thorough interview consists of
asking general information questions, then asking additional questions whenever
information is incomplete or seems inaccurate or inconsistent
What is a conflict of interest? - --Answer --Circular 230 states that a conflict
of interest exists if the representation of one client will be directly adverse to
another client, or if there is a significant risk that the representation of one or more
clients will be materially limited by the practitioner's responsibilities to another
client, a former client, or a third person, or by a personal interest of the
practitioner.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
, What actions can resolve a conflict of interest? - --Answer --A conflict of
interest is resolved when it is acknowledged, disclosed to all parties, and the parties
have consented to waiving the conflict.
What taxpayer information is confidential? - --Answer --Any information
that could potentially identify the taxpayer is confidential. Information includes
(but is not limited to) name, address and phone number, social security number,
place of employment, and any information from a tax return.
What is a tax preparer's responsibility upon finding out that a taxpayer has not
complied with one or more tax laws? - --Answer --A tax preparer must only
advise the taxpayer of the noncompliance and the consequences for not correcting
the situation. The taxpayer is the only individual who can decide to make
corrections to their return.
What action should a tax preparer take if a taxpayer insists on reporting
information that is inaccurate? - --Answer --A tax preparer may not sign a
return reporting clearly inaccurate information or otherwise assist a taxpayer in
filing an inaccurate return.
A tax preparer may not sign a return reporting clearly inaccurate information or
otherwise assist a taxpayer in filing an inaccurate return. - --Answer --The
dependent must be a qualifying child or qualifying relative; they must be a U.S.
citizen or a resident of the United States, Canada, or Mexico; they cannot file a
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 4
Questions and Answers
What is the difference between earned income and unearned income? - --
Answer --Earned income is received for services performed. Some examples
of earned income include wages, commissions, tips, farming, and other business
income.
Unearned income is taxable income that does not meet the definition of earned
income. Examples of unearned income include 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? - --
Answer --If the taxpayer's name, social security number, or earnings or
withholdings are incorrect, the taxpayer should notify their employer and request a
corrected Form W-2. The employee should request that the employer update their
records and verify that the earnings were properly credited with the Social Security
Administration. However, the taxpayer is still responsible for filing a timely tax
return. If the employee's attempts to obtain a corrected Form W-2 from their
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,employer are not successful, the taxpayer should notify the IRS. It may be
necessary to prepare a substitute Form W-2.
What information do you need to know to determine whether a taxpayer is
required to file a return? - --Answer --The taxpayer's marital status, age at the
end of the tax year, gross income for the year, and if the taxpayer is a dependent.
Where on Form 1040 can you find the regular standard deduction amounts? - --
Answer --In the left-hand margin on page 1 of Form 1040. They are: single
and married filing separately, $12,200; married filing jointly and qualifying
widow(er), $24,400; and head of household, $18,350.
How much is added to the standard deduction if the taxpayer (or spouse) is age 65
or older, or blind? - --Answer --$1,300 for married taxpayers and qualifying
widow(er)s, or $1,650 for all other unmarried taxpayers, is added for each
condition.
What is the personal exemption amount for 2019? - --Answer --There is no
personal exemption for 2019. A personal exemption was an amount previously
allowed by law to reduce income that would otherwise be taxed. The Tax Cuts and
Jobs Act of 2017 repealed this deduction beginning in 2018.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
,How is the gross income filing requirement determined for most taxpayers? - --
Answer --The taxpayer's standard deduction, including the additional
amounts for age and blindness. However, for MFS, the amount is $5.
What is the difference between injured spouse allocation and innocent spouse
relief? - --Answer --The IRS provides an injured spouse allocation for the
taxpayer to protect their portion of a refund from a spouse's past-due federal
income tax, unpaid student loans, or unpaid child and spousal support, or state
income tax.
The IRS provides 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.
What is a thorough interview? - --Answer --A thorough interview consists of
asking general information questions, then asking additional questions whenever
information is incomplete or seems inaccurate or inconsistent
What is a conflict of interest? - --Answer --Circular 230 states that a conflict
of interest exists if the representation of one client will be directly adverse to
another client, or if there is a significant risk that the representation of one or more
clients will be materially limited by the practitioner's responsibilities to another
client, a former client, or a third person, or by a personal interest of the
practitioner.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
, What actions can resolve a conflict of interest? - --Answer --A conflict of
interest is resolved when it is acknowledged, disclosed to all parties, and the parties
have consented to waiving the conflict.
What taxpayer information is confidential? - --Answer --Any information
that could potentially identify the taxpayer is confidential. Information includes
(but is not limited to) name, address and phone number, social security number,
place of employment, and any information from a tax return.
What is a tax preparer's responsibility upon finding out that a taxpayer has not
complied with one or more tax laws? - --Answer --A tax preparer must only
advise the taxpayer of the noncompliance and the consequences for not correcting
the situation. The taxpayer is the only individual who can decide to make
corrections to their return.
What action should a tax preparer take if a taxpayer insists on reporting
information that is inaccurate? - --Answer --A tax preparer may not sign a
return reporting clearly inaccurate information or otherwise assist a taxpayer in
filing an inaccurate return.
A tax preparer may not sign a return reporting clearly inaccurate information or
otherwise assist a taxpayer in filing an inaccurate return. - --Answer --The
dependent must be a qualifying child or qualifying relative; they must be a U.S.
citizen or a resident of the United States, Canada, or Mexico; they cannot file a
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 4
