Page 1 of 15
TAX PREPARER FINAL EXAM QUESTIONS AND REVISED ANSWERS 100% PASS
GURANTEED.
Where can the regular standard deduction amounts be found?
• In the left-hand margin at the top of page 2 of Forms 1040 and 1040A.
• They are: S, MFS $5,700; MFJ, QW $11,400; HH $8,400.
• The amounts differ for taxpayers age 65 or older or blind and those who may be claimed as
dependents by other taxpayers.
[2010]
What is the exemption amount for 2009?
$3,650 with a reduction for higher-income taxpayers of 2% for each $2,500 ($1,250 MFS) the AGI
exceeds amounts:
$166,800 S
$250,200 MFJ QW
$125,100 MFS
$208,500 HH
(3.7,8)
Are early distributions from qualified retirement plans always penalized?
No.
• Does not apply to qualified disaster recovery assistance distributions.
• Does not apply to any recovery of cost or any amount rolled over in a timely manner.
(22.12,13)
How does a Tax Professional know if a distribution exception applies?
• He can determine that by using thorough interview questions when discussing the distribution with
the client.
• The distribution code on the 1099-R can also be helpful to the Tax Professional. (22.12)
Is there a time limit for filing amended returns?
Yes.
Three years from the date the return was filed or within two years the tax was paid, whichever is later.
(23.3)
, Page 2 of 15
A taxpayer wants to amend his 2006 return. He filed it April 16, 2007. The return was examined by the
IRS on January 9, 2009 and $280 additional tax was paid that date. What is the latest date on which an
amended return may be filed?
January 9, 2011
Any refund will be limited to $280 (the tax paid within the two years preceding the date the amended
return was filed). (23.3)
What are the rules for changing filing status after the due date of the return?
Married couples may not change their filing status from MFJ to MFS after the due date. (23.4)
A taxpayer's employer paid $500 of a taxpayer's $2,000 child care expenses for him. How will the
employer's assistance affect the child-care credit?
Total child care expenses must be reduced by any amounts paid by the employer. (8.11)
Where does the employer report the amount of child care expense assistance to the taxpayer?
Form W-2 Box 10 (8.11)
What is the maximum amount of contributions on which the Saver's Credit may be based?
$2,000 per individual or spouse (21.19)
What are the rates for the Saver's Credit?
The rates are 10%, 20%, or 50%, depending upon filing status and modified AGI. (21.17)
A taxpayer is building a new home and had a solar water heater installed in 2009, but the home was not
ready to be occupied until early 2010. Can they take the residential energy credit?
Yes, they can take the credit on their 2010 tax return. (8.21)
How much may an eligible educator deduct for qualified classroom expenses as an adjustment to
income?
Up to $250 (11.4)
Who is an eligible educator?
Works at least 900 hours a year. (11.4)
Where is the educator expense deduction reported?
Form 1040 Line 23.
What income reporting form should an independent contractor sometimes receive from the person who
paid him for his services?
Form 1099-MISC (15.6)
Schedule C, Line F asks for the accounting method used in the business.
TAX PREPARER FINAL EXAM QUESTIONS AND REVISED ANSWERS 100% PASS
GURANTEED.
Where can the regular standard deduction amounts be found?
• In the left-hand margin at the top of page 2 of Forms 1040 and 1040A.
• They are: S, MFS $5,700; MFJ, QW $11,400; HH $8,400.
• The amounts differ for taxpayers age 65 or older or blind and those who may be claimed as
dependents by other taxpayers.
[2010]
What is the exemption amount for 2009?
$3,650 with a reduction for higher-income taxpayers of 2% for each $2,500 ($1,250 MFS) the AGI
exceeds amounts:
$166,800 S
$250,200 MFJ QW
$125,100 MFS
$208,500 HH
(3.7,8)
Are early distributions from qualified retirement plans always penalized?
No.
• Does not apply to qualified disaster recovery assistance distributions.
• Does not apply to any recovery of cost or any amount rolled over in a timely manner.
(22.12,13)
How does a Tax Professional know if a distribution exception applies?
• He can determine that by using thorough interview questions when discussing the distribution with
the client.
• The distribution code on the 1099-R can also be helpful to the Tax Professional. (22.12)
Is there a time limit for filing amended returns?
Yes.
Three years from the date the return was filed or within two years the tax was paid, whichever is later.
(23.3)
, Page 2 of 15
A taxpayer wants to amend his 2006 return. He filed it April 16, 2007. The return was examined by the
IRS on January 9, 2009 and $280 additional tax was paid that date. What is the latest date on which an
amended return may be filed?
January 9, 2011
Any refund will be limited to $280 (the tax paid within the two years preceding the date the amended
return was filed). (23.3)
What are the rules for changing filing status after the due date of the return?
Married couples may not change their filing status from MFJ to MFS after the due date. (23.4)
A taxpayer's employer paid $500 of a taxpayer's $2,000 child care expenses for him. How will the
employer's assistance affect the child-care credit?
Total child care expenses must be reduced by any amounts paid by the employer. (8.11)
Where does the employer report the amount of child care expense assistance to the taxpayer?
Form W-2 Box 10 (8.11)
What is the maximum amount of contributions on which the Saver's Credit may be based?
$2,000 per individual or spouse (21.19)
What are the rates for the Saver's Credit?
The rates are 10%, 20%, or 50%, depending upon filing status and modified AGI. (21.17)
A taxpayer is building a new home and had a solar water heater installed in 2009, but the home was not
ready to be occupied until early 2010. Can they take the residential energy credit?
Yes, they can take the credit on their 2010 tax return. (8.21)
How much may an eligible educator deduct for qualified classroom expenses as an adjustment to
income?
Up to $250 (11.4)
Who is an eligible educator?
Works at least 900 hours a year. (11.4)
Where is the educator expense deduction reported?
Form 1040 Line 23.
What income reporting form should an independent contractor sometimes receive from the person who
paid him for his services?
Form 1099-MISC (15.6)
Schedule C, Line F asks for the accounting method used in the business.
