H&R BLOCK PRACTICE EXAMINATION
2026 QUESTIONS WITH ANSWERS
GUARANTEED TO PASS.
◍ Two Ways to Pay as You Go. Answer: Withholding and Estimated
Tax Payments
◍ Form W-4. Answer: Employee's Withholding Allowance
Certificate
◍ Form 8815. Answer: Exclusion of Interest From Series EE and I
U.S. Savings Bonds Issued After 1989
◍ Form 2210. Answer: Underpayment of Estimated Tax by
Individuals, Estates, and Trusts
◍ Form 4868. Answer: Application for Automatic Extension of Time
To File U.S. Individual Income Tax Return
◍ Form 8888. Answer: Allocation of Refund
◍ Form 9465. Answer: Installment Agreement Request
◍ Amended Return. Answer: A tax return filed on Form 1040X after
the original return has been filed.
,◍ Closed Year. Answer: A tax year for which the statute of
limitations has expired.
◍ Open Year. Answer: A taxable year for which the statute of
limitations has not yet expired.
◍ Failure-to-File Penalty. Answer: Generally 5% for each month or
part of a month the return is late, but not more than 25% of the tax not
paid.
◍ Failure to File. Answer: Taxpayer fails to file the return by the due
date, and there is a balance due.
◍ Failure to Pay. Answer: Taxpayer fails to pay the tax owed by the
due date.
◍ Failure-to-Pay Penalty. Answer: 0.5% of the unpaid taxes for each
month or part of a month after the due date, but not more than 25%.
◍ Negligence or Intentional Disregard. Answer: Taxpayer shows
negligence or disregard of the rules or regulations causing an
underpayment.
◍ Negligence-or-Intentional-Disregard Penalty. Answer: 20% of the
underpayment.
,◍ Substantial Understatment. Answer: Taxpayer understates their tax
by the larger of $5,000 or 10% of the correct tax.
◍ Substantial-Understatement Penalty. Answer: 20% of the
underpayment.
◍ Form 1040X. Answer: Amended U.S. Individual Income Tax
Return
◍ When can an amended return be filed?. Answer: Within three years
of the date the original return was filed, or within two years of the
date the tax was paid, whichever is later.
◍ Can the 1040X be e-filed?. Answer: No.
◍ Household Employee. Answer: An individual who performs
nonbusiness services in a taxpayer's home.
◍ Active Income and Losses. Answer: Those for which a taxpayer
performs services.
◍ Partnership. Answer: A form of business in which two or more
persons join their money and skills in conducting the business as co-
owners.
◍ Passive Income and Losses. Answer: Those from business
activities in which the taxpayer does not materially participate, and all
rental activities.
, ◍ Portfolio Income and Losses. Answer: Those from such sources as
dividends, interest, capital gains and losses, and royalties.
◍ Rental Income. Answer: Income received by the taxpayer for
allowing another person's use of the taxpayer's property.
◍ Royalty. Answer: (1) A payment received for the right to exploit a
taxpayer's ownership of natural resources or a taxpayer's literary,
musical, or artistic creation. (2) An interest in the oil and gas in place
that entitles the holder to a specified fraction, in kind or in value, of
the total production from the property, free of any expenses of
development and operation.
◍ S Corporation. Answer: A qualified small business corporation that
has elected special tax treatment under subchapter S of the Internal
Revenue Code. S corporations pass income, losses, and deductions
through to shareholders to report on their individual returns.
◍ Trust. Answer: A tax entity that distributes all or part of its income
to beneficiaries as instructed by the trust agreement.
◍ Requirements for a Real Estate Professional. Answer: 1. More than
half of the personal services performed by the taxpayer in all trades or
businesses during the tax year were performed in real property trades
or businesses in which the taxpayer materially participated.
2. The taxpayer performed more than 750 hours of services during the
year in real property trades or businesses in which the taxpayer
materially participated.
2026 QUESTIONS WITH ANSWERS
GUARANTEED TO PASS.
◍ Two Ways to Pay as You Go. Answer: Withholding and Estimated
Tax Payments
◍ Form W-4. Answer: Employee's Withholding Allowance
Certificate
◍ Form 8815. Answer: Exclusion of Interest From Series EE and I
U.S. Savings Bonds Issued After 1989
◍ Form 2210. Answer: Underpayment of Estimated Tax by
Individuals, Estates, and Trusts
◍ Form 4868. Answer: Application for Automatic Extension of Time
To File U.S. Individual Income Tax Return
◍ Form 8888. Answer: Allocation of Refund
◍ Form 9465. Answer: Installment Agreement Request
◍ Amended Return. Answer: A tax return filed on Form 1040X after
the original return has been filed.
,◍ Closed Year. Answer: A tax year for which the statute of
limitations has expired.
◍ Open Year. Answer: A taxable year for which the statute of
limitations has not yet expired.
◍ Failure-to-File Penalty. Answer: Generally 5% for each month or
part of a month the return is late, but not more than 25% of the tax not
paid.
◍ Failure to File. Answer: Taxpayer fails to file the return by the due
date, and there is a balance due.
◍ Failure to Pay. Answer: Taxpayer fails to pay the tax owed by the
due date.
◍ Failure-to-Pay Penalty. Answer: 0.5% of the unpaid taxes for each
month or part of a month after the due date, but not more than 25%.
◍ Negligence or Intentional Disregard. Answer: Taxpayer shows
negligence or disregard of the rules or regulations causing an
underpayment.
◍ Negligence-or-Intentional-Disregard Penalty. Answer: 20% of the
underpayment.
,◍ Substantial Understatment. Answer: Taxpayer understates their tax
by the larger of $5,000 or 10% of the correct tax.
◍ Substantial-Understatement Penalty. Answer: 20% of the
underpayment.
◍ Form 1040X. Answer: Amended U.S. Individual Income Tax
Return
◍ When can an amended return be filed?. Answer: Within three years
of the date the original return was filed, or within two years of the
date the tax was paid, whichever is later.
◍ Can the 1040X be e-filed?. Answer: No.
◍ Household Employee. Answer: An individual who performs
nonbusiness services in a taxpayer's home.
◍ Active Income and Losses. Answer: Those for which a taxpayer
performs services.
◍ Partnership. Answer: A form of business in which two or more
persons join their money and skills in conducting the business as co-
owners.
◍ Passive Income and Losses. Answer: Those from business
activities in which the taxpayer does not materially participate, and all
rental activities.
, ◍ Portfolio Income and Losses. Answer: Those from such sources as
dividends, interest, capital gains and losses, and royalties.
◍ Rental Income. Answer: Income received by the taxpayer for
allowing another person's use of the taxpayer's property.
◍ Royalty. Answer: (1) A payment received for the right to exploit a
taxpayer's ownership of natural resources or a taxpayer's literary,
musical, or artistic creation. (2) An interest in the oil and gas in place
that entitles the holder to a specified fraction, in kind or in value, of
the total production from the property, free of any expenses of
development and operation.
◍ S Corporation. Answer: A qualified small business corporation that
has elected special tax treatment under subchapter S of the Internal
Revenue Code. S corporations pass income, losses, and deductions
through to shareholders to report on their individual returns.
◍ Trust. Answer: A tax entity that distributes all or part of its income
to beneficiaries as instructed by the trust agreement.
◍ Requirements for a Real Estate Professional. Answer: 1. More than
half of the personal services performed by the taxpayer in all trades or
businesses during the tax year were performed in real property trades
or businesses in which the taxpayer materially participated.
2. The taxpayer performed more than 750 hours of services during the
year in real property trades or businesses in which the taxpayer
materially participated.
