The Annual Federal Tax Refresher (For AFSP) course is now available in Compass. Find it under course ID # 00068920. This course is 6 hours long with a 100-question exam. You must score at least 70% to pass. Tax professionals who wish to participate in the Annual Filing Season Program (AFSP) this tax season must complete the course, unless they are in an exempt category. Look at the H&R Block's 2015 Continuing Education Requirements document to determine if you need the course to participate. All tax professionals will receive credit upon completion except Enrolled agents who do not receive any credit for this course and should not take it.
Final Exam
Student: Wang, Kent
SCORE: 86%
PASSED
Question 13
Milo could not find his log book that proved his vehicle expenses for 2015. Therefore, he did not deduct this expense on his timely-filed 2015 return. What is the latest date he can file an amended return to obtain a refund of taxes paid on his 2015 return?
Your answer: April 15, 2017
Question 27
The taxpayer in every case below is a U.S. citizen and not a dependent of another taxpayer. Which of the following individuals meets the dependency tests as a qualifying child (QC) of the taxpayer?
Your answer: Zeb (17) is the taxpayer's stepson. He lived with the taxpayer for five months and moved out with his mother when the taxpayer and Zeb's mother got a divorce. The taxpayer contributed over 50% of the support of the household.
Question 33
What is the most precise tax definition of "income"?
Your answer: All worldwide gain from whatever source derived, unless specifically excluded from taxation by law.
Question 42
Joy, a 55-year-old taxpayer, receives $20,000 in wages. What is the maximum contribution she may make to her 401(k) plan in 2015?
Your answer: $24,000
Question 52
How does a taxpayer know the amount of their penalty on early withdrawal of savings?
Your answer: It is reported on Form 5329
Question 53
Sydney does sideline work as a graphic artist for several local businesses. Her primary employment is as a graphic designer for a local corporation. Sydney participates in her corporate employer's health plan. How much of her health insurance premium payment may Sydney deduct as a business expense on her Schedule C?
Your answer: 50%
Question 59
Of the American Opportunity Credit (AOC) and the lifetime learning credit, which credit can be partially refundable?
Your answer: Both credits
Question 61
What is the divorced or separated parent exception regarding Child Tax Credit? Assume a Form 8332 is filed.
Your answer: The custodial parent is allowed to claim the child's dependency exemption and Child Tax Credit. The noncustodial parent claims the other child-related tax benefits.
Question 69
A taxpayer is no longer eligible to claim the EITC if they have more than ______ investment income in 2015?
Your answer: $3,350
Question 71
Following the rules for divorced or separated parents, Jane, the noncustodial parent, may claim which of the following:
Your answer: Head of household filing status
Question 81
What documentation is needed only for vehicle expenses claimed using the actual expense method?
Your answer: A log of dates, purpose, and miles traveled for business use.
Question 89
Which of the following is NOT one of the four requirements for a Tax Professional to meet the EITC due diligence requirement?
Your answer: Computation of the credit
Question 91
If the IRS rejects the electronic portion of a taxpayer's individual income tax return for processing, and the electronic return originator (ERO) cannot rectify the reason for the rejection, the ERO must take reasonable steps to inform the taxpayer of the rejection within what length of time?
Your answer: Ten days.
Question 97
Complete the following sentence with the correct option. There is a preparer penalty for a tax return or claim for refund that understates the taxpayer's liability due to an unreasonable position that the preparer:
Your answer: Willfully and recklessly pursued
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More Questions
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More Questions
1 What is the 2015 exemption amount?
$3,950
XX$4,000
$4,050
$4,500
2 Unless new legislation is enacted, which of the following tax provisions regarding business incentives ended after 2014?
Standard mileage rate deduction for leased vehicles.
XXSection 179 deduction for up to $500,000 of qualified property expenditures.
$25,000 Section 179 limit for heavy SUVs.
Accelerated depreciation for listed property
3 Which of the following taxpayers is required to file a 2015 federal income tax return?
Single (48), gross income $10,250.
Single (72), gross income $11,800, all from pensions.
XX Head of household (25), gross income $13,500.
Head of household (66), gross income $14,750
4, Milo could not find his log book that proved his vehicle expenses for 2015. Therefore, he did not deduct this expense on his timely-filed 2015 return. What is the latest date he can file an amended return to obtain a refund of taxes paid on his 2015 return?
>>>>April 15, 2017.
(WRONG)XXApril 15, 2018.
October 15, 2018.
April 15, 2019
5 Unless new legislation is enacted, which of the following Form 1040 adjustments ended after 2014?
Self-employed health insurance.
Health Savings Account (HSA).
XX$250 qualified educator expense.
Alimony.
6 Unless new legislation is enacted, which of the following tax provisions regarding business incentives ended after 2014?
Switching to actual expense method after standard mileage rate was taken in the first year.
(WRONG)XXSection 179 deduction.
>>>>50% bonus depreciation.
Interest paid on business-use vehicle.
7 The 2015 IRA one-rollover-per-year limit applies to:
Trustee-to-trustee transfers.
Failed financial institutions.
All rollovers made in the 2015 calendar year.
XXAll rollovers made in the one-year period that begins on the date the taxpayer receives the IRA distribution
8 Which of the following taxpayers is/are required to file a 2015 federal income tax return?
Married filing jointly (48 and 44), gross income $16,750.
XXQualifying widow(er) (48), gross income $16,750.
Single (64), gross income $10,150.
Single (65), gross income $11,525
9 What is the 2015 standard deduction for taxpayers both over age 65 filing as married filing jointly? $12,600 XX$15,100 $21,850 $23,100
10 Unless new legislation is enacted, which of the following tax provisions regarding cancellation of debt income ended after 2014? XXQualified principal residence indebtedness exclusion. Insolvency. Qualified farm indebtedness. Qualified real property business debt
11 Which of the following taxpayers is required to file a 2015 federal income tax return?
Unmarried dependent (18) of another taxpayer, gross income $4,500, all from wages.
(WRONG)XXUnmarried dependent (2) of another taxpayer, gross income $1,050, all from interest.
Unmarried dependent (16) of another taxpayer, gross income $1,000 ($800 wages plus $200 interest).
>>>>Unmarried dependent (16) of another taxpayer, gross income $1,075 ($700 wages plus $375 interest).
12 What is the 2015 exemption amount? $3,850 $3,900 $3,950 XX$4,000
13 Which of the following taxpayers is/are required to file a 2015 federal income tax return? Head of household (58), gross income $11,750. Married filing jointly (72 and 68), gross income $21,750. XXMarried filing jointly (72 and 63), gross income $22,800. Married filing separately (72), gross income $3,950
14 What is the 2015 filing requirement for a taxpayer under age 65 filing as single? $6,300 $7,550 $7,850 XX$10,300
15 Unless new legislation is enacted, which of the following tax provisions claimed on Form 1040, Schedule A, ended after 2014? XXState/local sales tax itemized deduction. Real estate taxes paid on third home. Gambling losses. Long-term care insurance
16 Taxpayers who take a distribution from a retirement savings plan before a certain age are generally subject to a 10% early distribution penalty. What is that age? 55 XX59½ 63½ 65
17 Which of the following individuals CANNOT file as Head of household?
>>>> Kim, an unmarried taxpayer, pays all the cost to maintain her home and provides more than half the support for her five-year-old son with whom she lives. (WRONG)XXJohn, a married taxpayer, lives with, and provides more than half the support for, his seven-year old daughter. He also provided more than half the cost of maintaining their household. John's wife moved to Colorado in April and has not lived with John or their daughter during the remainder of the year. Cara, a married taxpayer, lives with her mother-in-law and her ten- year-old daughter in the mother-in-law's home. Cara provides more than half the cost of maintaining the household and provides more than half her daughter's support. Cara's husband is in the military and did not live in his mother's home during any part of the year. Nathan, a married father, lives with and provides all of the support for his two children, ages 7 and 8. Nathan and his estranged wife have not lived in the same residence for at least two years.
18 Marcus (32) is a U.S. citizen. He was married at the beginning of the current tax year. His wife lived in the household until September. Their divorce became finalized on November 11, and Marcus did not remarry before the end of the year. Marcus provided all the support for his son, who lived with him all year and is his qualifying child. What is Marcus's most advantageous filing status? Single. XXHead of household. Married filing jointly. Married filing separately
19 David and Lynnette had been married for 53 years. David died on March 2, 2015. Lynnette did not remarry and wants to file only one return. Which filing status is correct for her 2015 return? Single. XXMarried filing jointly. Married filing separately. Qualified widow
20 What is the Premium Tax Credit? A payment, made by the taxpayer, if anyone in the taxpayer's tax household does not have minimum essential health insurance coverage, and does not qualify for a coverage exemption. An additional 2.35% on earned income exceeding $200,000 ($250,000 MFJ, $125,000 MFS). XXAn advanceable and refundable tax credit to help pay the cost of health insurance coverage purchased through the Marketplace. A tax credit given to applicable large employers (ALEs) for sponsoring employer-provided health insurance coverage to their employees.
21 Sean and Cynthia were divorced on September 21, 2015. Neither has any dependents. Neither has remarried. Which filing status should they use? XXSingle. Married filing jointly. Married filing separately. Head of household.
22 Millie's 2015 tax liability is $41,293. Her AGI is greater than $150,000. Her 2015 withholding is $36,910. Her 2014 tax liability was $29,570. Does she owe an estimated tax payment penalty for 2015? Why or why not? Yes. She owes a penalty because her balance due is greater than $1,000. Yes. She owes a penalty because she did not have at least 100% of her tax liability withheld during the year. XXNo. She does not owe a penalty because her 2015 withholding was greater than 110% of her 2014 tax liability. No. She does not owe a penalty because her 2015 withholding is at least 90% of her 2015 tax liability.
23 Michael and Jenna entered into a common-law marriage in 2010. They have not divorced. Michael does not know the whereabouts of Jenna and has not spoken with her in two years. What is Michael's filing status? Single. Married filing jointly. XXMarried filing separately. Head of household.
24 Which form must be filed by a taxpayer who wishes to purchase up to $5,000 in paper U.S. Series I savings bonds? Form 8606. Form 8880. XXForm 8888. Form 9465
25 Which of the following is NOT a warning sign that would alert a taxpayer to tax-related identity theft? IRS reject codes indicate the taxpayer's SSN already has been used. Taxpayer receives an IRS notice regarding a tax return after all tax issues have been resolved, refund was received or balance due was paid. XXTaxpayer has found unidentifiable charges on their credit cards. Taxpayer receives notice that indicates they had wages from an employer they cannot identify.
26 To claim the filing status of head of household, a taxpayer must: Have a dependent who pays less than half of their own support. Be single according to the laws of the state of residence. XXPay over half the cost of maintaining the household for themselves and a qualifying person. Live in the U.S. more than half the year.
27 Peter's unmarried daughter, Celia, lived with him in his home for the entire year. Peter is divorced. He owns his own home and pays all of the costs of upkeep for the home. Peter paid over one-half of the cost of support for Celia. Peter may file as head of household in which of the following circumstances: Celia is 19, not a full-time student, and earned $3,750 in wages. XXCelia is 22, a full-time student for five months, and earned $5,000 in wages. Celia is 21 and earned $3,725 in wages. Celia is 20 and earned $4,000 in wages
28 Which taxpayers are considered married for federal tax purposes? >>>>>Joe and Paolo were married in a state that recognizes marriages between couples of the same gender. They now reside in a state which does not recognize marriages between couples of the same gender. Jane and Kim are registered domestic partners in California and have been registered since 2007. Abe and Ron were married in a state that does not recognize marriages between couples of the same gender. They now reside in a state which does recognize marriages between couples of the same gender. (WRONG)XXAll of these couples are considered married for federal tax purposes
29 Which of the following is CORRECT regarding the tiebreaker rules for qualifying child? The parent who has the higher AGI has the greater right, regardless of which parent the child lived with longer. If neither claimant is a parent, the one who lived with the child longer has the higher right. The parent who provided more support for the child has the higher right, regardless of AGI. XXThe parent who lived with the child longer has the higher right, regardless of AGI.
30 Melanie files single. Last year, she received $11,500 in social security benefits and had $1,500 in interest income. She had no other income or adjustments. What percentage of her social security benefits is taxable? XX0% Up to 50% Up to 85% 100%
31 Steve lost contact with his wife a few years ago and has been filing MFS ever since. In 2015, he received $20,000 in social security benefits and has modified AGI of $12,000. What percentage of his social security is taxable? (WRONG)XX0% Up to 50%
>>>>>Up to 85% 100%
32 What term is missing from this statement? Gross income includes all income from whatever source derived, unless specifically excluded from taxation: Earned. Cash. XXWorldwide. Subject to tax.
33 Which of the following is NOT a rate used to include social security benefits in gross income? 0% Up to 50% Up to 85% XX100%
34 Sheldon files as head of household. He was in an auto accident with an uninsured driver during 2014. His 2014 itemized deductions included $2,350 medical expenses (after the 10% reduction) for which he did not expect to be reimbursed. His total itemized deductions exceeded the standard deduction by $5,000. In 2015, Sheldon received a $2,000 reimbursement for his medical expenses from his own insurance company. What is his 2015 Form 1040, line 21, amount? $0 XX$2,000 $2,350 $5,000
35 Ishmael and Genevieve filed jointly for 2014 and claimed the standard deduction. In 2015, they received a Form 1099-G for a $68 state income tax refund. What is their 2015 Form 1040, line 10, amount? XX$0 $68 $3,950 Not enough information is given to make this determination
36 Taryn filed as head of household for 2014. She itemized deductions on her federal return and chose to deduct state and local income taxes. Taryn lives in a state that does not have state sales tax. Her itemized deductions exceeded the standard deduction by $112. She received a $150 state income tax refund and a Form 1099-G showing that amount. What is her 2015 Form 1040, line 10, amount? $0 XX$112 $150 $262
37 Schedule B, Compliance Requirement for Foreign Accounts and Trusts, must be answered "Yes" only if the foreign account: Exceeds $10,000 for all 12 months. XXIs held by a United States person who has a financial interest in or signature authority, or other authority over the account. Exceeds $10,000 at the end of the year. Is solely owned by a United States person
38 Joy, a 55-year-old taxpayer, receives $20,000 in wages. What is the maximum contribution she may make to her 401(k) plan in 2015? $18,000 XX$20,000 $23,000 $24,000
39 Sometimes a taxpayer is required to repay unemployment compensation. Which of the following repayment options can only be claimed on Form 1040, Schedule A?
>>>>>Repayment in subsequent year is $3,000 or less. Repayment in subsequent year is over $3,000. Repayment is in same year as income. (WRONG) is in same year as income and is $3,000 or less.
40 What does distribution code 1 in Form 1099-R, box 7, signify? XXEarly distribution, no known exception. Normal distribution. Distribution due to death of the annuitant. Roth IRA distribution, five-year holding period not met
41 Glen, a 35-year-old taxpayer, receives $40,000 in wages. What is the maximum contribution he may make to his 401(k) plan in 2015? $17,500 XX$18,000 $23,000 $24,000
42 What is the maximum tax rate of qualified dividends? 15% XX20% 25% 28%
43 A taxpayer's Form 1099-B shows $6,521 in net proceeds from a securities sale on May 7, 2014. In Box 6, "Noncovered security" is checked. What are all of the other items you need to know to complete Form 8949 and Schedule D? The purchase price paid for the securities. Whether the client sold stocks or mutual funds. The asset basis on the sale date. XXThe date(s) the asset was acquired and the asset basis on the sale date.
44 Which of the following are job expenses deductible on Schedule A, line 21, NOT requiring Form 2106? Travel expenses reimbursed by the employer. Education expenses for a career change. XXResearch expenses of a college professor. Job search expenses for a new occupation
45 What is the penalty for using HSA distributions to pay non-qualified expenses? 10% XX20% 25% 50%
46 Which item is NOT permitted as a mortgage interest deduction on Schedule A? Points paid to purchase a new home. Mortgage interest paid on the taxpayer's second home. XXMortgage interest paid on the taxpayer's third home. Late payment charges paid on the taxpayer's new home
47 Which of the following taxpayers meets the distance requirement for deducting moving expenses? Bill's new workplace is half a mile from his former home. His former home is 60 miles from his old workplace. Connie's new workplace is five miles from her former home. Her former home is two miles from her old workplace. Yuri's new workplace is 65 miles from his former home. His former home is 25 miles from his old workplace. XXDanica's new workplace is 60 miles from her former home. Her former home is five miles from her old workplace.
48 Which of the following could be deductible as Other Taxes on Schedule A, line 8? XXForeign income taxes paid on taxable investments. $355 employment tax paid on Schedule H for a household employee. Custom duties paid on imported goods. Federal gift tax paid
49 On which of the following forms do taxpayers report their HSA contributions and distributions? (WRONG)Form XX1099-SA. Form 8880. Form 8888. >>>>>Form 8889.
50 Louise is a retired school teacher who spends most of her time as a volunteer. She itemizes deductions and brought in a list of her charitable contributions. Which of the following is NOT a deductible charitable contribution? Cash donated to her college sorority's fundraising effort to support the local children's science museum. A car in poor condition that she donated to an organization which provided her with a Form 1098-C. The cost of parking in a parking garage near the downtown public library where she reads to children once a week. XXTuition she paid as a scholarship for her hairdresser's child to attend band camp.
51 Which of the following items may be deductible as a medical expense on Schedule A? The cost of nutritional supplements recommended by a physician to maintain good health. The cost of a cosmetic procedure not medically necessary. Prescription drugs ordered by a U.S. physician but obtained over the counter from another country. XXLowering counters and cabinets for a handicapped individual
52 Which of the following taxes paid could be deductible on the taxpayer's 2015 Form 1040, Schedule A? 2015 fourth quarter estimated state income tax payment paid timely on January 15, 2016. >>>>>City tax balance due paid on November 15, 2015, for income earned in 2014. (WRONG)XXLuxury tax in excess of the selective sales tax rate paid for a new car on February 12, 2015. Employment tax for household workers paid February 10, 2015
53 For 2015, which one of the following taxpayers covered by an employer retirement plan may FULLY DEDUCT their traditional IRA contribution? Kelli files single. Her modified AGI is $62,000. Mark files head of household. His modified AGI is $63,000. XXSamantha files a joint return as a surviving spouse. Her modified AGI is $91,000. Donald is married and files a joint return. The couple's modified AGI is $98,500.
54 Which of the following items are deductible on Schedule A, line 28, as miscellaneous itemized deductions NOT subject to the 2%-of-AGI threshold? XXImpairment-related work expenses of a disabled person. Tax preparation fees. Foreign income tax paid. Gambling losses in excess of gambling winnings.
55 A casualty loss of personal-use property is subject to which of the following? XXA 10%-of-AGI limit and reduced by $100 per casualty. A 10%-of-AGI limit and reduced by $100 per year. A 2%-of-AGI limit and reduced by $100 per casualty. A 2%-of-AGI limit.
56 Which of the following would be used to indicate that a taxpayer has an adjustment from the rental of personal property engaged in for profit? DPAD. Jury Pay. Rental. XXPPR
57 How does a taxpayer know the amount of their penalty on early withdrawal of savings? The penalty is computed on Schedule B and carried to Form 1040, line 30. Each taxpayer is required to keep their own records to document the early withdrawal penalty they had to pay on their account. It is reported on Form 5329. It is reported on Form 1099-INT.
58
To qualify to claim EITC, a taxpayer with or without children must meet certain tests such as have a valid SSN, not use the MFS filing status, be a citizen or resident alien all year, not file Form 2555, and have investment income of $3,400 or less. What qualification is missing from this list?
Chad is a cash-basis taxpayer who owns his own business. On December 30, 2014, Chad received a check from a customer in the amount of $15,000. Chad was busy and did not deposit the check in his bank account until January 5, 2015. In which tax year must Chad report the $15,000?
Your answer: (not answered)