H&R Block Income Tax Course
Questions And Answers With Verified
Solutions Latest Updated 2025
Q: What does "Due Diligence" refer to in tax preparation?
A: It refers to the standards and procedures tax professionals must follow when
preparing income tax returns to ensure accuracy and compliance.
Q: What is "Estimated Tax"?
A: The amount of tax a taxpayer expects to owe during the year, after accounting
for any tax already withheld and applicable refundable credits.
Q: What is an "Estimated Tax Voucher"?
A: A statement where an individual estimates their tax liability on income not
subject to withholding, plus any excess tax withheld from their paycheck or self-
employment tax.
Q: What does "Exemption from Withholding" mean?
A: It’s the status claimed on Form W-4 that directs an employer not to withhold
federal income tax from the employee’s wages.
Q: What is an "Underpayment Penalty"?
A: A penalty imposed when a taxpayer fails to pay enough tax during the year.
Q: What are the two primary ways to make tax payments throughout the
year?
A: Through withholding or making estimated tax payments.
Q: What is Form W-4 used for?
A: It is used by employees to determine how much federal income tax should be
withheld from their paycheck.
,Q: What is Form 4868 used for?
A: It is an application for an automatic extension of time to file a U.S. individual
income tax return.
Q: What is an "Amended Return"?
A: A tax return filed to correct errors or omissions from the original return,
typically filed using Form 1040X.
Q: When can an amended return be filed?
A: It can be filed within three years of the original return filing date, or within two
years of the tax payment date, whichever is later.
Q: Can a 1040X be filed electronically?
A: No, Form 1040X must be filed on paper.
Q: What does "Portfolio Income and Losses" refer to?
A: Income and losses derived from investments such as dividends, interest, and
capital gains or losses.
Q: What is Schedule E used for?
A: It is used to report supplemental income or loss, such as rental income or
royalties.
Q: What is a "Royalty"?
A: Payments received for the use of intellectual property or natural resources from
a taxpayer's property.
,Q: What is an "Annuity"?
A: A financial product that provides a series of regular payments over a specified
period, usually after retirement.
Q: Who is a "Beneficiary"?
A: A person designated to receive benefits or assets from an account, insurance
policy, or will.
Q: What is a "Contribution" to a retirement plan?
A: Money that an individual or employer deposits into a retirement savings
account.
Q: What is a "Defined Benefit Plan"?
A: A retirement plan that provides a fixed benefit amount, typically based on
salary and years of service, rather than on investment returns.
Q: What is a "Defined Contribution Plan"?
A: A retirement plan where contributions are made into individual accounts, and
the benefits depend on the account's performance.
Q: What is a "Disability Pension"?
A: A pension paid to individuals who are unable to work due to disability,
typically from an employer or retirement plan.
Q: What is a "Distribution" in the context of retirement plans?
A: The withdrawal or payout of funds from a retirement account.
Q: What is a "Pension"?
A: Regular, predetermined payments made to an individual after they retire from
their job.
, Q: What is a "Rollover"?
A: The transfer of funds from one retirement account to another without incurring
taxes, usually between similar types of accounts.
Q: What is a "Roth IRA"?
A: A type of retirement account where contributions are not tax-deductible, but
qualified withdrawals are tax-free.
Q: What is a "Traditional IRA"?
A: A type of retirement account where contributions may be tax-deductible, and
withdrawals are taxed as ordinary income.
Q: What is the "Full Retirement Age" for Social Security benefits?
A: For those born before 1938, it is 65; for those born later, it gradually increases
to 67.
Q: How much of a person’s Social Security benefits can be taxable?
A: Up to 85% of Social Security benefits may be taxable depending on the
taxpayer’s income.
Q: What is Form SSA-1099 used for?
A: It is used to report Social Security benefits received during the year.
Q: What is Form RRB-1099 used for?
A: It is used to report railroad retirement benefits received.
Q: How much of Social Security benefits are taxable for low-income
individuals?
Questions And Answers With Verified
Solutions Latest Updated 2025
Q: What does "Due Diligence" refer to in tax preparation?
A: It refers to the standards and procedures tax professionals must follow when
preparing income tax returns to ensure accuracy and compliance.
Q: What is "Estimated Tax"?
A: The amount of tax a taxpayer expects to owe during the year, after accounting
for any tax already withheld and applicable refundable credits.
Q: What is an "Estimated Tax Voucher"?
A: A statement where an individual estimates their tax liability on income not
subject to withholding, plus any excess tax withheld from their paycheck or self-
employment tax.
Q: What does "Exemption from Withholding" mean?
A: It’s the status claimed on Form W-4 that directs an employer not to withhold
federal income tax from the employee’s wages.
Q: What is an "Underpayment Penalty"?
A: A penalty imposed when a taxpayer fails to pay enough tax during the year.
Q: What are the two primary ways to make tax payments throughout the
year?
A: Through withholding or making estimated tax payments.
Q: What is Form W-4 used for?
A: It is used by employees to determine how much federal income tax should be
withheld from their paycheck.
,Q: What is Form 4868 used for?
A: It is an application for an automatic extension of time to file a U.S. individual
income tax return.
Q: What is an "Amended Return"?
A: A tax return filed to correct errors or omissions from the original return,
typically filed using Form 1040X.
Q: When can an amended return be filed?
A: It can be filed within three years of the original return filing date, or within two
years of the tax payment date, whichever is later.
Q: Can a 1040X be filed electronically?
A: No, Form 1040X must be filed on paper.
Q: What does "Portfolio Income and Losses" refer to?
A: Income and losses derived from investments such as dividends, interest, and
capital gains or losses.
Q: What is Schedule E used for?
A: It is used to report supplemental income or loss, such as rental income or
royalties.
Q: What is a "Royalty"?
A: Payments received for the use of intellectual property or natural resources from
a taxpayer's property.
,Q: What is an "Annuity"?
A: A financial product that provides a series of regular payments over a specified
period, usually after retirement.
Q: Who is a "Beneficiary"?
A: A person designated to receive benefits or assets from an account, insurance
policy, or will.
Q: What is a "Contribution" to a retirement plan?
A: Money that an individual or employer deposits into a retirement savings
account.
Q: What is a "Defined Benefit Plan"?
A: A retirement plan that provides a fixed benefit amount, typically based on
salary and years of service, rather than on investment returns.
Q: What is a "Defined Contribution Plan"?
A: A retirement plan where contributions are made into individual accounts, and
the benefits depend on the account's performance.
Q: What is a "Disability Pension"?
A: A pension paid to individuals who are unable to work due to disability,
typically from an employer or retirement plan.
Q: What is a "Distribution" in the context of retirement plans?
A: The withdrawal or payout of funds from a retirement account.
Q: What is a "Pension"?
A: Regular, predetermined payments made to an individual after they retire from
their job.
, Q: What is a "Rollover"?
A: The transfer of funds from one retirement account to another without incurring
taxes, usually between similar types of accounts.
Q: What is a "Roth IRA"?
A: A type of retirement account where contributions are not tax-deductible, but
qualified withdrawals are tax-free.
Q: What is a "Traditional IRA"?
A: A type of retirement account where contributions may be tax-deductible, and
withdrawals are taxed as ordinary income.
Q: What is the "Full Retirement Age" for Social Security benefits?
A: For those born before 1938, it is 65; for those born later, it gradually increases
to 67.
Q: How much of a person’s Social Security benefits can be taxable?
A: Up to 85% of Social Security benefits may be taxable depending on the
taxpayer’s income.
Q: What is Form SSA-1099 used for?
A: It is used to report Social Security benefits received during the year.
Q: What is Form RRB-1099 used for?
A: It is used to report railroad retirement benefits received.
Q: How much of Social Security benefits are taxable for low-income
individuals?
