CHAPTERS 1-6 TEST (ITC 2024)
MULTIPLE CHOICE QUESTIONS WITH
ANSWERS EXAM WITH COMPLETE
SOLUTIONS
Min Lee received the following items of income during the year:
• $35,000 of wages.
• $150 of dividends from a savings account at her credit union.
• $200 of interest from a U.S. Savings Bond.
• $250 of interest from a Treasury bill.
What amount will be reported on Min's Form 1040, line 2b?
a) $350
b) $400
c) $450
d) $600 -ANSd) $600
Rachel is a restaurant hostess with tip income. Which of the following statements would
help her to report her tip income accurately?
a) Any tips Rachel receives are excluded from gross income and are not subject to
federal income tax.
b) If Rachel does not report her tips to her employer, they are not taxable.
c) Rachel should use Form 4070-A, Employee's Daily Record of Tips, to keep a daily
record of her tip income.
d) Tips under $20 a month are not taxable. -ANSc) Rachel should use Form 4070-A,
Employee's Daily Record of Tips, to keep a daily record of her tip income.
Beatrice had interest income reported on Form 1099-INT, Interest Income. Which of the
following scenarios would require Beatrice to file Schedule B, Interest and Ordinary
Dividends, along with Form 1040? Beatrice received:
a) $10 of regular interest.
b) $1,250 of regular interest.
c) $1,600 of tax-exempt interest.
d) $1,700 of regular interest. -ANSd) $1,700 of regular interest.
To avoid the risk of penalties, tax preparers must abide by rules regarding preparer tax
identification numbers (PTINs). Which of the following statements is TRUE regarding
PTINs?
,a) A PTIN is required semi-annually for anyone who prepares or assists in preparing
federal tax returns for compensation.
b) If a tax preparer does not have a PTIN, they can still prepare tax returns for
compensation.
c) The IRS may provide a PTIN to taxpayers who are victims of identity theft.
d) The preparer must enter their PTIN on the tax return in the space provided. -ANSd)
The preparer must enter their PTIN on the tax return in the space provided.
Which of the following is an example of earned income?
a) Capital gains.
b) Rents.
c) Royalties.
d) Sick pay. -ANSd) Sick pay.
Malachi has a savings account at his local credit union. He earned $50 on deposits
made to this account. How is this income reported on his tax return? The income will be
reported as:
a) Nominee interest.
b) Ordinary dividends.
c) Qualified dividends.
d) Regular interest. -ANSd) Regular interest.
Tucker is an unmarried, 29-year-old taxpayer. He received the following income for the
year:
• Wages: $44,500.
• Interest from a bank savings account: $50.
• Unemployment compensation: $7,000.
• Gift from his father: $3,000.
How much of Tucker's income is considered earned income?
a) $44,500
b) $44,550
c) $51,500
d) $54,550 -ANSa) $44,500
Ricky and his wife, Sarah, are filing their tax return. Which of the following statements
regarding signing the return is NOT correct?
a) A joint return must be signed by both the taxpayer and the spouse.
b) Every taxpayer must sign their own return.
c) When a tax return is filed electronically, there are no signature requirements for the
taxpayer.
, d) When a taxpayer signs their tax return, they declare, under penalties of perjury, that
they have examined the return and accompanying schedules and statements, and to
the best of their knowledge and belief, they are true, correct, and complete. -ANSc)
When a tax return is filed electronically, there are no signature requirements for the
taxpayer.
Mark (67) and Josephine (69) are married and are both U.S. citizens. They will file a
joint return. Which federal tax form do they have the option to use to file their personal
income tax return?
a) Form 1040-ES.
b) Form 1040-NR.
c) Form 1040-PR.
d) Form 1040-SR -ANSd) Form 1040-SR
Ruben and Josie were married on October 15, 2022. They wish to file only one return.
What is Ruben's and Josie's correct and most favorable 2022 filing status?
a) Single.
b) Married filing jointly.
c) Married filing separately.
d) Head of household. -ANSb) Married filing jointly.
Kiri and Divina are registered domestic partners. Neither had dependents they could
claim for 2022. What is Kiri's and Divina's correct and most favorable 2022 filing status
on the federal return?
a) Single.
b) Married filing jointly.
c) Married filing separately.
d) Qualifying surviving spouse. -ANSa) Single.
What is the due date to file a 2022 Form 1040, U.S. Individual Income Tax Return, or
request an extension?
a) January 31, 2023
b) April 18, 2023
c) June 15, 2023
d) October 16, 2023 -ANSb) April 18, 2023
What are the three factors needed to determine the filing requirement for a
nondependent?
a) Dependent taxpayer test, joint return test, and citizen test.
b) Filing status, age, and income.
c) Marital status, filing status, and income.
MULTIPLE CHOICE QUESTIONS WITH
ANSWERS EXAM WITH COMPLETE
SOLUTIONS
Min Lee received the following items of income during the year:
• $35,000 of wages.
• $150 of dividends from a savings account at her credit union.
• $200 of interest from a U.S. Savings Bond.
• $250 of interest from a Treasury bill.
What amount will be reported on Min's Form 1040, line 2b?
a) $350
b) $400
c) $450
d) $600 -ANSd) $600
Rachel is a restaurant hostess with tip income. Which of the following statements would
help her to report her tip income accurately?
a) Any tips Rachel receives are excluded from gross income and are not subject to
federal income tax.
b) If Rachel does not report her tips to her employer, they are not taxable.
c) Rachel should use Form 4070-A, Employee's Daily Record of Tips, to keep a daily
record of her tip income.
d) Tips under $20 a month are not taxable. -ANSc) Rachel should use Form 4070-A,
Employee's Daily Record of Tips, to keep a daily record of her tip income.
Beatrice had interest income reported on Form 1099-INT, Interest Income. Which of the
following scenarios would require Beatrice to file Schedule B, Interest and Ordinary
Dividends, along with Form 1040? Beatrice received:
a) $10 of regular interest.
b) $1,250 of regular interest.
c) $1,600 of tax-exempt interest.
d) $1,700 of regular interest. -ANSd) $1,700 of regular interest.
To avoid the risk of penalties, tax preparers must abide by rules regarding preparer tax
identification numbers (PTINs). Which of the following statements is TRUE regarding
PTINs?
,a) A PTIN is required semi-annually for anyone who prepares or assists in preparing
federal tax returns for compensation.
b) If a tax preparer does not have a PTIN, they can still prepare tax returns for
compensation.
c) The IRS may provide a PTIN to taxpayers who are victims of identity theft.
d) The preparer must enter their PTIN on the tax return in the space provided. -ANSd)
The preparer must enter their PTIN on the tax return in the space provided.
Which of the following is an example of earned income?
a) Capital gains.
b) Rents.
c) Royalties.
d) Sick pay. -ANSd) Sick pay.
Malachi has a savings account at his local credit union. He earned $50 on deposits
made to this account. How is this income reported on his tax return? The income will be
reported as:
a) Nominee interest.
b) Ordinary dividends.
c) Qualified dividends.
d) Regular interest. -ANSd) Regular interest.
Tucker is an unmarried, 29-year-old taxpayer. He received the following income for the
year:
• Wages: $44,500.
• Interest from a bank savings account: $50.
• Unemployment compensation: $7,000.
• Gift from his father: $3,000.
How much of Tucker's income is considered earned income?
a) $44,500
b) $44,550
c) $51,500
d) $54,550 -ANSa) $44,500
Ricky and his wife, Sarah, are filing their tax return. Which of the following statements
regarding signing the return is NOT correct?
a) A joint return must be signed by both the taxpayer and the spouse.
b) Every taxpayer must sign their own return.
c) When a tax return is filed electronically, there are no signature requirements for the
taxpayer.
, d) When a taxpayer signs their tax return, they declare, under penalties of perjury, that
they have examined the return and accompanying schedules and statements, and to
the best of their knowledge and belief, they are true, correct, and complete. -ANSc)
When a tax return is filed electronically, there are no signature requirements for the
taxpayer.
Mark (67) and Josephine (69) are married and are both U.S. citizens. They will file a
joint return. Which federal tax form do they have the option to use to file their personal
income tax return?
a) Form 1040-ES.
b) Form 1040-NR.
c) Form 1040-PR.
d) Form 1040-SR -ANSd) Form 1040-SR
Ruben and Josie were married on October 15, 2022. They wish to file only one return.
What is Ruben's and Josie's correct and most favorable 2022 filing status?
a) Single.
b) Married filing jointly.
c) Married filing separately.
d) Head of household. -ANSb) Married filing jointly.
Kiri and Divina are registered domestic partners. Neither had dependents they could
claim for 2022. What is Kiri's and Divina's correct and most favorable 2022 filing status
on the federal return?
a) Single.
b) Married filing jointly.
c) Married filing separately.
d) Qualifying surviving spouse. -ANSa) Single.
What is the due date to file a 2022 Form 1040, U.S. Individual Income Tax Return, or
request an extension?
a) January 31, 2023
b) April 18, 2023
c) June 15, 2023
d) October 16, 2023 -ANSb) April 18, 2023
What are the three factors needed to determine the filing requirement for a
nondependent?
a) Dependent taxpayer test, joint return test, and citizen test.
b) Filing status, age, and income.
c) Marital status, filing status, and income.
