HRB FINAL EXAM WITH COMPLETE SOLUTIONS
GRADED A+
Terms in this set (328)
Earned income is received for services performed. Examples are wages
commissions, tips and generally farming and other business income . Taxable income
What is the Difference between earned other than that received for services performed. Unearned Income includes money
income and unearned income? received ro the investment of money or other property, such as interest, dividends,
and royalties. It also includes pensions alimony, unemployment compensation and
other income that is not earned
If an employee thinks their Form W2 is Employee should discuss with employer who issued the document and request a
incorrect, what should they do? W2C. If no help from employer, notify IRS. Tax prepaper can then file a substitute.
What information do you need to know to Gross income, filing status, age and if they are a dependent
determine whether a taxpayer is required
to file a return?
For tax purposes, when is a person's marital On the last day of the tax year
status determined?
Where on the tax form can you find the Line 22 on 1040A, In the left margin at the top of the page 2 of forms 1040 and 1040A.
regular standard deduction amounts? Look at actual form to look for line
How much is added to the standard $1550 if unmarried, $1250 if married
deduction if the taxpayer (or spouse is age
65 or older, or blind?
What is the personal exemption amount for $4,050
2016?
What two amounts are combined to make The standard deduction and the personal exemption amounts
up the gross income filing requirments for
most taxpayers?
1/8
, Under what circumstances might a taxpayer 1. Has net employment of $400 or more net self employment 2. You had
be required to file a return even though unemployment income you owe medicare Advantage MSA, receive HAS, Archer,
they do not meet the gross income filing MSA 3. Reeived an Advanced Premium Tax credit even if they didn't otherwise have a
requirements? filing requirment for the year *Tips, HSA, SE $400, PTC
The difference between injured spouse and innocent spouse is significant in the eyes
of the IRS. Both release you from an income tax liability arising from a "married filing
What is the difference between injured
jointly" return but different outcomes. Innocent spouse filed a joint return byt was
spouse allocation and innocent spouse
unaware that their spouse deliberately under reported tax liability. Injured spouse
relief?
seeks to protect his or her share of the refund in case it gets seized or offset due to
the other spouse's debts or unpaid obligations
CHAPTER 3: DEPENDENT EXEMPTIONS
AND SUPPORT
What four requirements must be met for an Must pass the dependent test, joint return test, citizenship, qualifying child or relative
individual to be claimed as a dependent
What are the five tests for a qualifying 1. Relationship 2. Age 3. Residency 4. Support 5. Joint Return
child?
They can meet this test by not filing a joint return with their spouse or they can file a
How can a married individual meet the joint
joint return with their spouse if they are filing only to claim a refund on any taxes
return test to remain a qualifying child?
withheld
Total support is determined and reduced by the funds received by and for the
How can you determine who paid more person from all sources other than the taxpaer. The remaining support is considered
than half of a person's support? to be provided by the taxpayer. Other sources might include government support
Worksheet for Determining Support
What happens if an individual is a qualifying Generally, the custodial parent is the one in which the child spent the most nights
child of more than one taxpayer?
Tie Breaker Rules apply : 1. The parent, if only one of the persons is the childs parent
What happens when more than one
2. The parent with whom the child lived the longest during the tax 3. The parents with
taxpayer claims the same qualifying child?
the highest AGI if no parent can claim the child as a qualifying child
1. Not be a qualifying child, the person cannot be the taxpayers qualifying child or
What four tests must be met for an the qualifying child of another taxpayer 2. Relationship: Child, brother, sister, step
individual to be considered a qualifying sister, step brother, step father , step mother, in-laws 3. Gross Income: gross income
relative? must be less than $4050 4. Support: Taxpayer must provide more than half the
support
How can the gross income for a qualifying Gross income must be less than $4050 (Do not include tax exempt income)
relative test be satisfied?
You only need 2120 multiple support declaration if you are claiming someone other
What is the purpose of Form 2120 Multiple
than a qualifying child as a dependent and there are two or more people including
Support Declaration?
yourself who provide support for the dependent
How much is the child tax credit worth? $1,000
What additional requirements must be met 1. Taxpayer 2. Child must be under17 at the end of the year 3. Qualifying child must
for a taxpayer to be eligible to claim the be claimed on tax payer returns 4. Qualifying child must be US Citizen US National
Child Tax Credit for the qualifying child? or resident of US
Is the Child Tax Credit refundable or CTC is nonrefundable the The additional child tax credit is refundable
nonrefundable
How much is the penalty if a paid $510 for each failure, for each credit on each return Total Penalty max for return is
prepaerer fails to meet the child tax credit $1530
due diligence requirements
2/8
GRADED A+
Terms in this set (328)
Earned income is received for services performed. Examples are wages
commissions, tips and generally farming and other business income . Taxable income
What is the Difference between earned other than that received for services performed. Unearned Income includes money
income and unearned income? received ro the investment of money or other property, such as interest, dividends,
and royalties. It also includes pensions alimony, unemployment compensation and
other income that is not earned
If an employee thinks their Form W2 is Employee should discuss with employer who issued the document and request a
incorrect, what should they do? W2C. If no help from employer, notify IRS. Tax prepaper can then file a substitute.
What information do you need to know to Gross income, filing status, age and if they are a dependent
determine whether a taxpayer is required
to file a return?
For tax purposes, when is a person's marital On the last day of the tax year
status determined?
Where on the tax form can you find the Line 22 on 1040A, In the left margin at the top of the page 2 of forms 1040 and 1040A.
regular standard deduction amounts? Look at actual form to look for line
How much is added to the standard $1550 if unmarried, $1250 if married
deduction if the taxpayer (or spouse is age
65 or older, or blind?
What is the personal exemption amount for $4,050
2016?
What two amounts are combined to make The standard deduction and the personal exemption amounts
up the gross income filing requirments for
most taxpayers?
1/8
, Under what circumstances might a taxpayer 1. Has net employment of $400 or more net self employment 2. You had
be required to file a return even though unemployment income you owe medicare Advantage MSA, receive HAS, Archer,
they do not meet the gross income filing MSA 3. Reeived an Advanced Premium Tax credit even if they didn't otherwise have a
requirements? filing requirment for the year *Tips, HSA, SE $400, PTC
The difference between injured spouse and innocent spouse is significant in the eyes
of the IRS. Both release you from an income tax liability arising from a "married filing
What is the difference between injured
jointly" return but different outcomes. Innocent spouse filed a joint return byt was
spouse allocation and innocent spouse
unaware that their spouse deliberately under reported tax liability. Injured spouse
relief?
seeks to protect his or her share of the refund in case it gets seized or offset due to
the other spouse's debts or unpaid obligations
CHAPTER 3: DEPENDENT EXEMPTIONS
AND SUPPORT
What four requirements must be met for an Must pass the dependent test, joint return test, citizenship, qualifying child or relative
individual to be claimed as a dependent
What are the five tests for a qualifying 1. Relationship 2. Age 3. Residency 4. Support 5. Joint Return
child?
They can meet this test by not filing a joint return with their spouse or they can file a
How can a married individual meet the joint
joint return with their spouse if they are filing only to claim a refund on any taxes
return test to remain a qualifying child?
withheld
Total support is determined and reduced by the funds received by and for the
How can you determine who paid more person from all sources other than the taxpaer. The remaining support is considered
than half of a person's support? to be provided by the taxpayer. Other sources might include government support
Worksheet for Determining Support
What happens if an individual is a qualifying Generally, the custodial parent is the one in which the child spent the most nights
child of more than one taxpayer?
Tie Breaker Rules apply : 1. The parent, if only one of the persons is the childs parent
What happens when more than one
2. The parent with whom the child lived the longest during the tax 3. The parents with
taxpayer claims the same qualifying child?
the highest AGI if no parent can claim the child as a qualifying child
1. Not be a qualifying child, the person cannot be the taxpayers qualifying child or
What four tests must be met for an the qualifying child of another taxpayer 2. Relationship: Child, brother, sister, step
individual to be considered a qualifying sister, step brother, step father , step mother, in-laws 3. Gross Income: gross income
relative? must be less than $4050 4. Support: Taxpayer must provide more than half the
support
How can the gross income for a qualifying Gross income must be less than $4050 (Do not include tax exempt income)
relative test be satisfied?
You only need 2120 multiple support declaration if you are claiming someone other
What is the purpose of Form 2120 Multiple
than a qualifying child as a dependent and there are two or more people including
Support Declaration?
yourself who provide support for the dependent
How much is the child tax credit worth? $1,000
What additional requirements must be met 1. Taxpayer 2. Child must be under17 at the end of the year 3. Qualifying child must
for a taxpayer to be eligible to claim the be claimed on tax payer returns 4. Qualifying child must be US Citizen US National
Child Tax Credit for the qualifying child? or resident of US
Is the Child Tax Credit refundable or CTC is nonrefundable the The additional child tax credit is refundable
nonrefundable
How much is the penalty if a paid $510 for each failure, for each credit on each return Total Penalty max for return is
prepaerer fails to meet the child tax credit $1530
due diligence requirements
2/8
