VITA Advanced Retake Test 2026 Tax Year – Complete
Exam-Style Questions with Detailed Rationales | 100% Verified –
Pass Guaranteed – A+ Graded
Question 1
A married couple comes to a VITA site. They lived in the same home for the entire tax
year but have not shared a bedroom or had any financial interdependence since March
2026. They have one child, age 8, who lives with the wife. The wife paid more than half
the cost of maintaining the household. Which filing status may the wife use if she meets
all other tests?
A. Married Filing Jointly only
B. Married Filing Separately only
C. Head of Household
D. Single
Correct Answer: C
Rationale: A married taxpayer may file as Head of Household if they lived apart from
their spouse for the last 6 months of the year, paid more than half the cost of
maintaining a household, and the household was the main home of a qualifying child.
The wife meets the "abandoned spouse" rule (IRC §7703(b)), allowing HOH status. MFJ
(A) is available to any married couple but is not the only option. MFS (B) is available but
not required. Single (D) is incorrect because she is still legally married.
Question 2
Maria and David divorced in 2024. Their 10-year-old son lived with Maria for 10 months
and with David for 2 months in 2026. David has a signed Form 8332 from Maria
releasing the dependency exemption to him. Maria's AGI is $35,000; David's AGI is
$60,000. Who may claim the Earned Income Tax Credit (EITC) for this child?
,A. David, because he has Form 8332 and the higher AGI
B. Maria, because she is the custodial parent and the child lived with her more than half
the year
C. Both Maria and David, because they both have a qualifying relationship
D. Neither, because the divorce decree splits the tax benefits
Correct Answer: B
Rationale: For EITC, the custodial parent (with whom the child lived more than half the
year) is the only parent who may treat the child as a qualifying child, regardless of Form
8332. Form 8332 allows the noncustodial parent to claim the Child Tax
Credit/dependency exemption but NOT EITC (IRS Pub 4012, Tab E). David (A) cannot
claim EITC with only Form 8332. Both parents (C) cannot claim the same child for EITC.
Question 3
A married couple filing jointly has two qualifying children for EITC purposes. Their 2026
AGI is $58,000. Their investment income consists of $8,000 in taxable interest and
$4,500 in ordinary dividends. Are they eligible for EITC?
A. Yes, because their earned income exceeds their investment income
B. Yes, but only a reduced credit because they are in the phase-out range
C. No, because their investment income exceeds the EITC limit
D. No, because their AGI exceeds the maximum for two children
Correct Answer: C
Rationale: For tax year 2026, the EITC investment income limit is $11,950 (based on
current IRS inflation-adjusted figures). This couple has $12,500 in investment income
($8,000 + $4,500), which exceeds the limit, making them ineligible for EITC regardless of
earned income or other eligibility factors. Option (B) is incorrect because investment
income over the limit is a complete disqualifier, not a phase-out. Option (D) is incorrect
because the MFJ phase-out for two children begins at approximately $59,478, so
$58,000 is still within the range.
,Question 4
A taxpayer is legally married but lived apart from her spouse for the entire last 6 months
of 2026. She maintained a household for herself and her 6-year-old daughter. Her
spouse did not live in the household at any time during the last 6 months. She wants to
claim EITC. Which statement is correct?
A. She must file Married Filing Jointly to claim EITC
B. She may file Head of Household and claim EITC if she meets all other tests
C. She cannot claim EITC because she is still legally married
D. She must obtain a signed statement from her spouse to claim EITC
Correct Answer: B
Rationale: A married taxpayer who lived apart from their spouse for the last 6 months of
the year and maintained a household for a qualifying child may be treated as unmarried
(abandoned spouse rule) and file as Head of Household. If she meets all EITC
requirements, she can claim EITC using HOH status. She does not need to file MFJ (A)
or obtain spousal consent (D). Being legally married does not bar EITC if the separated
spouse rules are met (C).
Question 5
An Uber driver received Form 1099-NEC showing $42,000 in nonemployee
compensation for 2026. He drove 18,000 business miles, paid $3,200 for gas, $1,800 for
auto insurance (business portion), $800 for a new phone used 60% for business, and
$600 for car washes. He uses the standard mileage rate. Which expense is NOT
deductible on Schedule C?
A. Business mileage at the standard mileage rate
B. Gasoline purchased for business driving
C. The business portion of auto insurance
D. Car washes for the vehicle used for business
, Correct Answer: B
Rationale: When using the standard mileage rate, the rate includes the cost of gas, oil,
depreciation, insurance, and maintenance. Therefore, actual gas costs (B) cannot be
separately deducted; doing so would be double-dipping. Car washes (D), while arguably
included in the standard rate, are sometimes treated separately, but gas is explicitly
included in the standard mileage rate and is the clearest non-deductible item when the
standard rate is used. Business mileage (A) is the method itself. Auto insurance (C) is
also included in the standard rate, but gas is the most definitive answer per IRS Pub
463.
Question 6
A DoorDash driver received Form 1099-NEC for $28,000 and a Form 1099-K for $3,200
from payment card transactions. She had $8,500 in documented business expenses.
What is her net Schedule C profit?
A. $19,500
B. $22,700
C. $28,000
D. $31,200
Correct Answer: B
Rationale: Both Form 1099-NEC ($28,000) and Form 1099-K ($3,200) represent gross
business income that must be reported on Schedule C. Total gross receipts = $31,200.
Less business expenses of $8,500 = net profit of $22,700. Option (A) incorrectly
excludes the 1099-K income. Option (C) ignores expenses. Option (D) is gross receipts
before expenses.
Question 7
Exam-Style Questions with Detailed Rationales | 100% Verified –
Pass Guaranteed – A+ Graded
Question 1
A married couple comes to a VITA site. They lived in the same home for the entire tax
year but have not shared a bedroom or had any financial interdependence since March
2026. They have one child, age 8, who lives with the wife. The wife paid more than half
the cost of maintaining the household. Which filing status may the wife use if she meets
all other tests?
A. Married Filing Jointly only
B. Married Filing Separately only
C. Head of Household
D. Single
Correct Answer: C
Rationale: A married taxpayer may file as Head of Household if they lived apart from
their spouse for the last 6 months of the year, paid more than half the cost of
maintaining a household, and the household was the main home of a qualifying child.
The wife meets the "abandoned spouse" rule (IRC §7703(b)), allowing HOH status. MFJ
(A) is available to any married couple but is not the only option. MFS (B) is available but
not required. Single (D) is incorrect because she is still legally married.
Question 2
Maria and David divorced in 2024. Their 10-year-old son lived with Maria for 10 months
and with David for 2 months in 2026. David has a signed Form 8332 from Maria
releasing the dependency exemption to him. Maria's AGI is $35,000; David's AGI is
$60,000. Who may claim the Earned Income Tax Credit (EITC) for this child?
,A. David, because he has Form 8332 and the higher AGI
B. Maria, because she is the custodial parent and the child lived with her more than half
the year
C. Both Maria and David, because they both have a qualifying relationship
D. Neither, because the divorce decree splits the tax benefits
Correct Answer: B
Rationale: For EITC, the custodial parent (with whom the child lived more than half the
year) is the only parent who may treat the child as a qualifying child, regardless of Form
8332. Form 8332 allows the noncustodial parent to claim the Child Tax
Credit/dependency exemption but NOT EITC (IRS Pub 4012, Tab E). David (A) cannot
claim EITC with only Form 8332. Both parents (C) cannot claim the same child for EITC.
Question 3
A married couple filing jointly has two qualifying children for EITC purposes. Their 2026
AGI is $58,000. Their investment income consists of $8,000 in taxable interest and
$4,500 in ordinary dividends. Are they eligible for EITC?
A. Yes, because their earned income exceeds their investment income
B. Yes, but only a reduced credit because they are in the phase-out range
C. No, because their investment income exceeds the EITC limit
D. No, because their AGI exceeds the maximum for two children
Correct Answer: C
Rationale: For tax year 2026, the EITC investment income limit is $11,950 (based on
current IRS inflation-adjusted figures). This couple has $12,500 in investment income
($8,000 + $4,500), which exceeds the limit, making them ineligible for EITC regardless of
earned income or other eligibility factors. Option (B) is incorrect because investment
income over the limit is a complete disqualifier, not a phase-out. Option (D) is incorrect
because the MFJ phase-out for two children begins at approximately $59,478, so
$58,000 is still within the range.
,Question 4
A taxpayer is legally married but lived apart from her spouse for the entire last 6 months
of 2026. She maintained a household for herself and her 6-year-old daughter. Her
spouse did not live in the household at any time during the last 6 months. She wants to
claim EITC. Which statement is correct?
A. She must file Married Filing Jointly to claim EITC
B. She may file Head of Household and claim EITC if she meets all other tests
C. She cannot claim EITC because she is still legally married
D. She must obtain a signed statement from her spouse to claim EITC
Correct Answer: B
Rationale: A married taxpayer who lived apart from their spouse for the last 6 months of
the year and maintained a household for a qualifying child may be treated as unmarried
(abandoned spouse rule) and file as Head of Household. If she meets all EITC
requirements, she can claim EITC using HOH status. She does not need to file MFJ (A)
or obtain spousal consent (D). Being legally married does not bar EITC if the separated
spouse rules are met (C).
Question 5
An Uber driver received Form 1099-NEC showing $42,000 in nonemployee
compensation for 2026. He drove 18,000 business miles, paid $3,200 for gas, $1,800 for
auto insurance (business portion), $800 for a new phone used 60% for business, and
$600 for car washes. He uses the standard mileage rate. Which expense is NOT
deductible on Schedule C?
A. Business mileage at the standard mileage rate
B. Gasoline purchased for business driving
C. The business portion of auto insurance
D. Car washes for the vehicle used for business
, Correct Answer: B
Rationale: When using the standard mileage rate, the rate includes the cost of gas, oil,
depreciation, insurance, and maintenance. Therefore, actual gas costs (B) cannot be
separately deducted; doing so would be double-dipping. Car washes (D), while arguably
included in the standard rate, are sometimes treated separately, but gas is explicitly
included in the standard mileage rate and is the clearest non-deductible item when the
standard rate is used. Business mileage (A) is the method itself. Auto insurance (C) is
also included in the standard rate, but gas is the most definitive answer per IRS Pub
463.
Question 6
A DoorDash driver received Form 1099-NEC for $28,000 and a Form 1099-K for $3,200
from payment card transactions. She had $8,500 in documented business expenses.
What is her net Schedule C profit?
A. $19,500
B. $22,700
C. $28,000
D. $31,200
Correct Answer: B
Rationale: Both Form 1099-NEC ($28,000) and Form 1099-K ($3,200) represent gross
business income that must be reported on Schedule C. Total gross receipts = $31,200.
Less business expenses of $8,500 = net profit of $22,700. Option (A) incorrectly
excludes the 1099-K income. Option (C) ignores expenses. Option (D) is gross receipts
before expenses.
Question 7
