HRB FINAL EXAM Questions and Answers
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What happens when more than one taxpayer claims the same qualifying child? Tie
Breaker Rules apply : 1. The parent, if only one of the persons is the childs parent 2. The parent
with whom the child lived the longest during the tax 3. The parents with the highest AGI if no
parent can claim the child as a qualifying child
What four tests must be met for an individual to be considered a qualifying relative? 1.
Not be a qualifying child, the person cannot be the taxpayers qualifying child or the qualifying
child of another taxpayer 2. Relationship: Child, brother, sister, step sister, step brother, step
father , step mother, in-laws 3. Gross Income: gross income must be less than $4050 4. Support:
Taxpayer must provide more than half the support
How can the gross income for a qualifying relative test be satisfied? Gross income must
be less than $4050 (Do not include tax exempt income)
What is the purpose of Form 2120 Multiple Support Declaration? You only need 2120
multiple support declaration if you are claiming someone other than a qualifying child as a
dependent and there are two or more people including yourself who provide support for the
dependent
,How much is the child tax credit worth? $1,000
What additional requirements must be met for a taxpayer to be eligible to claim the Child Tax
Credit for the qualifying child? 1. Taxpayer 2. Child must be under17 at the end of the
year 3. Qualifying child must be claimed on tax payer returns 4. Qualifying child must be US
Citizen US National or resident of US
Is the Child Tax Credit refundable or nonrefundable CTC is nonrefundable the The
additional child tax credit is refundable
How much is the penalty if a paid prepaerer fails to meet the child tax credit due diligence
requirements $510 for each failure, for each credit on each return Total Penalty max for
return is $1530
What is the first due diligence requirement for the EITC, CTC,ACTC, AOTC and how does a
paid preparer meet this requirement? Complete and submit the form 8867. 1. Complete
the form thoroughly and conscientously read the form carefully 2. submit the form on every
claim for eitc, ctc/actc and aotc
,CHAPTER 4: DEPENDENT-RELATED FILING STATUS
What filing statuses are available to taxpayers who are unmarried 1. Single 2. Head of
Household 3. Qualifying widow(er)
How may a married taxpayer qualify as unmarried for tax purposes? Must be legally
seperated under a decree of divorce or separate maintenance or meet these requirements: 1. must
file a separate return 2. must have provided more than half the cost of maintaining a household 3.
the home must have been the principle place of abode
What requirements must be met for a taxpayer to qualify to file as head of household 1.
unmarried on the last day of year 2. paid more than 1/2 to maintain home 3. taxpayer has
qualifying child or relative or parent
What are some of the costs of maintaining a home? Rent, mortgage interest, real estate
taxes, homeowner or renter insurance, repairs/maintenance, utilities, food eaten in home
What requirements must be met for a taxpayer to use the qualifying wideo(er) status? 1.
Taxpayer's spouse died in either of the two tax years immediately preceding the current tax year
, 2. Taxpayer paid over half the cost of maintaining the household wich is home of their dependent
son , stepson or step daughter for the entire year and cannot remarry
In the case of divorced or separated parents, which parent generally gets to claim the qualifying
child? Generally, the custodial parent is the one in which the child spent the most nights.
If child lived equal nights, the parent with the higher AGI
What is the exception to this rule? Custodial parent may waive the right to claim
dependency exemption (Form 8332)
What happens when more than one taxpayer claims the same qualifying child? The IRS
will apply the TIE BREAKER RULES
CHAPTER 6: ITEMIZED DEDUCTIONS
When is it considered advantageous for a taxpayer to itemize? When allowable expenses
for things like home mortgage interest and property taxes, state income taxes or sales taxes,
medical expenses, charitable contributions that exceed the standard deduction
100% Solved
What happens when more than one taxpayer claims the same qualifying child? Tie
Breaker Rules apply : 1. The parent, if only one of the persons is the childs parent 2. The parent
with whom the child lived the longest during the tax 3. The parents with the highest AGI if no
parent can claim the child as a qualifying child
What four tests must be met for an individual to be considered a qualifying relative? 1.
Not be a qualifying child, the person cannot be the taxpayers qualifying child or the qualifying
child of another taxpayer 2. Relationship: Child, brother, sister, step sister, step brother, step
father , step mother, in-laws 3. Gross Income: gross income must be less than $4050 4. Support:
Taxpayer must provide more than half the support
How can the gross income for a qualifying relative test be satisfied? Gross income must
be less than $4050 (Do not include tax exempt income)
What is the purpose of Form 2120 Multiple Support Declaration? You only need 2120
multiple support declaration if you are claiming someone other than a qualifying child as a
dependent and there are two or more people including yourself who provide support for the
dependent
,How much is the child tax credit worth? $1,000
What additional requirements must be met for a taxpayer to be eligible to claim the Child Tax
Credit for the qualifying child? 1. Taxpayer 2. Child must be under17 at the end of the
year 3. Qualifying child must be claimed on tax payer returns 4. Qualifying child must be US
Citizen US National or resident of US
Is the Child Tax Credit refundable or nonrefundable CTC is nonrefundable the The
additional child tax credit is refundable
How much is the penalty if a paid prepaerer fails to meet the child tax credit due diligence
requirements $510 for each failure, for each credit on each return Total Penalty max for
return is $1530
What is the first due diligence requirement for the EITC, CTC,ACTC, AOTC and how does a
paid preparer meet this requirement? Complete and submit the form 8867. 1. Complete
the form thoroughly and conscientously read the form carefully 2. submit the form on every
claim for eitc, ctc/actc and aotc
,CHAPTER 4: DEPENDENT-RELATED FILING STATUS
What filing statuses are available to taxpayers who are unmarried 1. Single 2. Head of
Household 3. Qualifying widow(er)
How may a married taxpayer qualify as unmarried for tax purposes? Must be legally
seperated under a decree of divorce or separate maintenance or meet these requirements: 1. must
file a separate return 2. must have provided more than half the cost of maintaining a household 3.
the home must have been the principle place of abode
What requirements must be met for a taxpayer to qualify to file as head of household 1.
unmarried on the last day of year 2. paid more than 1/2 to maintain home 3. taxpayer has
qualifying child or relative or parent
What are some of the costs of maintaining a home? Rent, mortgage interest, real estate
taxes, homeowner or renter insurance, repairs/maintenance, utilities, food eaten in home
What requirements must be met for a taxpayer to use the qualifying wideo(er) status? 1.
Taxpayer's spouse died in either of the two tax years immediately preceding the current tax year
, 2. Taxpayer paid over half the cost of maintaining the household wich is home of their dependent
son , stepson or step daughter for the entire year and cannot remarry
In the case of divorced or separated parents, which parent generally gets to claim the qualifying
child? Generally, the custodial parent is the one in which the child spent the most nights.
If child lived equal nights, the parent with the higher AGI
What is the exception to this rule? Custodial parent may waive the right to claim
dependency exemption (Form 8332)
What happens when more than one taxpayer claims the same qualifying child? The IRS
will apply the TIE BREAKER RULES
CHAPTER 6: ITEMIZED DEDUCTIONS
When is it considered advantageous for a taxpayer to itemize? When allowable expenses
for things like home mortgage interest and property taxes, state income taxes or sales taxes,
medical expenses, charitable contributions that exceed the standard deduction
