Accredited Tax Preparer (ATP) Exam
Questions And Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A |
Instant Download Pdf
1. Which form is used by individuals to file their federal income tax
return?
A. Form 1065
B. Form 1120
C. Form 1040
D. Form 990
Form 1040 is the standard form used by individuals to report
income, deductions, and credits to the IRS.
2. Which of the following is considered taxable income?
A. Gifts from relatives
B. Child support payments
C. Unemployment compensation
D. Life insurance proceeds received at death
Unemployment compensation is taxable under federal law,
whereas gifts, child support, and life insurance death benefits are
generally not taxable.
3. A taxpayer may deduct mortgage interest on a primary residence
if:
A. The mortgage exceeds $1,000,000
B. The mortgage is secured by the home and within IRS limits
, C. The mortgage is for a vacation home only
D. Only if paid with cash
IRS rules allow interest deduction on mortgages secured by a
primary or secondary residence up to certain limits.
4. The standard deduction for a single taxpayer in 2025 is:
A. $12,950
B. $13,850
C. $14,600
D. $15,200
The IRS adjusts the standard deduction annually for inflation; for
2025, it is $14,600 for single filers.
5. Which of the following is not a qualifying child for the Child Tax
Credit?
A. A child under age 17
B. A child who lives with the taxpayer more than half the year
C. A child who is a U.S. citizen
D. A child claimed as a dependent by someone else
The child must be claimed by the taxpayer; if someone else claims
them, the credit cannot be taken.
6. The earned income tax credit (EITC) is:
A. A deduction from taxable income
B. A refundable credit
C. Only available to taxpayers over 50
D. A credit for business expenses
The EITC is refundable, meaning it can result in a refund even if no
tax is owed.
, 7. Which IRS form reports wages, tips, and other compensation to
employees?
A. Form 1099-MISC
B. Form W-2
C. Form 1040-ES
D. Form 941
Form W-2 reports employee income and taxes withheld to both
the employee and IRS.
8. Contributions to a traditional IRA are:
A. Never deductible
B. Potentially deductible depending on income and retirement
plan coverage
C. Taxable immediately
D. Only deductible if over age 50
Deductibility depends on the taxpayer’s income and participation
in other retirement plans.
9. Which of the following expenses is generally deductible as a
medical expense?
A. Cosmetic surgery
B. Prescription medications
C. Health club memberships
D. Non-prescribed vitamins
Prescription medications are qualified medical expenses; cosmetic
procedures and general wellness are not deductible.
10. Self-employment tax primarily funds:
A. Medicaid
B. Social Security and Medicare
Questions And Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A |
Instant Download Pdf
1. Which form is used by individuals to file their federal income tax
return?
A. Form 1065
B. Form 1120
C. Form 1040
D. Form 990
Form 1040 is the standard form used by individuals to report
income, deductions, and credits to the IRS.
2. Which of the following is considered taxable income?
A. Gifts from relatives
B. Child support payments
C. Unemployment compensation
D. Life insurance proceeds received at death
Unemployment compensation is taxable under federal law,
whereas gifts, child support, and life insurance death benefits are
generally not taxable.
3. A taxpayer may deduct mortgage interest on a primary residence
if:
A. The mortgage exceeds $1,000,000
B. The mortgage is secured by the home and within IRS limits
, C. The mortgage is for a vacation home only
D. Only if paid with cash
IRS rules allow interest deduction on mortgages secured by a
primary or secondary residence up to certain limits.
4. The standard deduction for a single taxpayer in 2025 is:
A. $12,950
B. $13,850
C. $14,600
D. $15,200
The IRS adjusts the standard deduction annually for inflation; for
2025, it is $14,600 for single filers.
5. Which of the following is not a qualifying child for the Child Tax
Credit?
A. A child under age 17
B. A child who lives with the taxpayer more than half the year
C. A child who is a U.S. citizen
D. A child claimed as a dependent by someone else
The child must be claimed by the taxpayer; if someone else claims
them, the credit cannot be taken.
6. The earned income tax credit (EITC) is:
A. A deduction from taxable income
B. A refundable credit
C. Only available to taxpayers over 50
D. A credit for business expenses
The EITC is refundable, meaning it can result in a refund even if no
tax is owed.
, 7. Which IRS form reports wages, tips, and other compensation to
employees?
A. Form 1099-MISC
B. Form W-2
C. Form 1040-ES
D. Form 941
Form W-2 reports employee income and taxes withheld to both
the employee and IRS.
8. Contributions to a traditional IRA are:
A. Never deductible
B. Potentially deductible depending on income and retirement
plan coverage
C. Taxable immediately
D. Only deductible if over age 50
Deductibility depends on the taxpayer’s income and participation
in other retirement plans.
9. Which of the following expenses is generally deductible as a
medical expense?
A. Cosmetic surgery
B. Prescription medications
C. Health club memberships
D. Non-prescribed vitamins
Prescription medications are qualified medical expenses; cosmetic
procedures and general wellness are not deductible.
10. Self-employment tax primarily funds:
A. Medicaid
B. Social Security and Medicare
