Final Exam
Student: Wang, Kent
SCORE: 90%
PASSED
Question 8
Which of the following statements is false?
Your answer: It's not necessary to indicate the state to which municipal bond interest belongs.
Question 11
Which statement is true?
Your answer: The credit for taxes paid to other states is always automatically calculated.
FINAL EXAM *************************************************
Which hot key in BlockWorks allows you to flip between the input pane and the form on a state return? F1 F2 XXXF3 F4
Which of the following statements is true? A taxpayer can be domiciled in more than one state. A taxpayer cannot have more than one permanent place of abode. XXXIf both Domicile and Statutory Residency Tests are present for a state, the taxpayer is considered a resident of the state if they pass one or the other. Reference to a permanent place of abode (or similar language) is required for a residency rule to be considered a Statutory Residency Test.
Which of the following will help you determine in which state a taxpayer is domiciled? The amount of time spent in a given location. The location of the taxpayer's employer. XXXThe taxpayer's intent. None of the above.
You should access the Taxable Refund Worksheet (TRW) and ensure it is correctly completed any time you: Have a new client who presents you with a 1099-G with a state refund reported in box 2. Question a new client and learn they received a refund last year AND they itemized last year. Have a prior client who presents you with a 1099-G with a state refund reported in box 2. XXXAll of the above
In Tenessee and New Hampshire, a state return will always be required if: The taxpayer is a resident of the state. There is any taxable interest and/or dividend income on the federal return. XXXThere is any taxable interest and/or dividend income over the required filing threshhold for each state. There are any wages reported in each state
Tennessee and New Hampshire begin the state tax return with: XXXTaxable interest and/or dividends. Federal AGI. Federal taxable income. State wages only.
Any time your client presents you with a 1099-G reporting a state refund in box 2, you should: Just enter the full amount on line 10 of the 1040 Pg 1 input pane. Consider the form informational only. XXXAsk your client whether they itemized deductions in the year for which the refund was received. Enter the 1099-G and skip the Taxable Refund Worksheet.
Which of the following statements is false? XXXIt's not necessary to indicate the state to which municipal bond interest belongs. It's important to indicate either the percentage or the dollar amount of the municipal bond interest that should be allocated to each state. There's never a time when municipal bond interest should be allocated to more than one state. All of the above statements are false
BlockWorks will assume full residency: Only on the state return tied to the ZIP code entered on the Personal Information input pane. Only when full-year residency is indicated on the state General Info input pane. Only on the first state added to the tax return. XXXOn any state added to the return unless indicated otherwise at the state level.
Which statement is true? XXXThere are very few instances where it might be necessary to override state data in BlockWorks. BlockWorks is updated immediately every time a state tax law or regulation is enacted or changed. There's no way of knowing what state issues have been reported or what the proposed workaround might be. It's very common to have to override BlockWorks calculations when preparing a state return
Which statement is true? You must always manually enter data for the credit on taxes paid to another state to calculate correctly. XXXThe credit for taxes paid to other states is always automatically calculated. It's not possible for the credit to be claimed for more than one part-year or nonresident state. None of the above statements is true
If you determine you have to manually enter data into BlockWorks to calculate a credit for taxes paid to other states, you should: Call the Technical Support Center for help. XXXReview the actual form the credit is calculated on and research relevant state regulations to ensure accurate data entries. Assume it's a problem with BlockWorks and report it as an issue. None of the above
Where can you find support for a state tax return in DNA? On the Known Issues page. In the BlockWorks Users Community. The Tax Research Center's Allstate Book. XXXAll of the above
As long as the ZIP code on the Personal Information input pane reflects the state of residency, AND you correctly enter the part-year or nonresident status for the taxpayer for each of the other states, BlockWorks will: XXXAutomatically calculate the credit (if available) with no further action by you. Calculate the credit on one part-year or nonresident return, but will require manual entry for any other states present. Do nothing - manual data entry is always required to calculate the credit for taxes paid to other states. None of the above
A credit for taxes paid to another state or state(s): Is always allowed, regardless of the other state. XXX Is generally allowed on the resident return, although some states allow the credit for part-year residents as well. Is calculated on only one part-year or nonresident state. Is never automatically calculated in BlockWorks
When it comes to determining the correct residency status for your client, you should: Ask as many questions as necessary to understand the taxpayer's situation. Review the residency requirements for the state in question. Learn the taxpayer's intent with regard to each state in question. XXXAll of the above
In how many states may a taxpayer be domiciled? XXX1 2 3 4
Which of the following statements is false? Research is important when preparing a state tax return. XXXThe Tax Institute will only answer questions related to a federal tax return. The state ITC material can be a good resource for information. There are some states that have a reciprocal agreement with neighboring states.
A Statuory Residency Test: XXXGenerally requires the taxpayer's physical presence within a state for a set number of days. Requires that the true, fixed, permanent home to which the taxpayer intends to return be located within the state. Generally requires that the taxpayer participate in a specific activity within the state. Always requires a "permanent" or "principal" place of abode
BlockWorks automatically assigns a state return based on: Address of the company that issued the W-2. XXXThe ZIP code entered on the Personal Information input pane. A state abbreviation entered anywhere in BlockWorks. BlockWorks doesn't automatically assign a state return