1. Who can claim Chris’ personal or dependency exemption?
a. Chris can claim his personal exemption because he had earned income.
b. Chris can claim his personal exemption if Darcy does not to claim him.
c. Chris does not have a filing requirement so he cannot claim a personal exemption.
XXXd. Chris must file a tax return and claim zero personal exemptions because Darcy can claim him as a dependent on her tax return.
2. Darcy can claim the expenses Chris paid as qualifying expenses for the American opportunity credit if Darcy claims Chris as a dependent on her return.
XXXa. True
b. False
3.Who can claim Hayden as a dependent?
a. No one can claim Hayden because he was not a member of the household for more than six months.
b. Mike cannot claim Hayden because Hayden is not Mike’s child.
c. Brittany can claim Hayden because she is his parent.
XXXd. Mike can claim Hayden; Brittany cannot claim Hayden because Brittany qualifies as Mike’s dependent.
4.Who can Mike claim as a qualifying child(ren) for the earned income credit?
a. Mike has no qualifying children.
b. Mike can claim Brittany, but not Hayden.
c. Mike can claim Hayden, but not Brittany.
XXXd. Mike can claim both Brittany and Hayden. (Incorrect)
5.Mike’s most advantageous filing status is Single.
a. True
XXXb. False
6.Are Henry and Claudia eligible to claim the earned income credit?
a. No, because Henry and Claudia’s income is too high.
XXXb. No, because they all have ITINs.
c. Yes, because Alyssa is their qualifying child for EIC.
d. Yes, but only if they file a joint return.
7.Henry and Claudia can claim Alyssa for which tax benefit(s)?
XXXa. Dependency exemption and the child tax credit
b. Dependency exemption only
c. Child tax credit only
d. Neither dependency exemption nor child tax credit
8.What is Martin’s most advantageous allowable filing status?
XXXa. Married Filing Separately
b. Head of Household
c. Single
d. Qualifying Widower
9.Considering Martin’s filing status and using Publication 4012, Tab J, Education Benefits, which education benefit is Martin eligible to claim?
a. American opportunity credit
XXXXXXb. He does not qualify for any education benefit
c. Lifetime learning credit
d. Tuition and fees deduction
10.Which allowable filing status is most advantageous to Samantha?
a. Qualifying Widow
b. Single
c. Married Filing Separately
XXXd. Head of Household (Incorrect)
11.Howard is Samantha’s qualifying person for which of the following benefits?
a. Dependency exemption
b. Child tax credit
XXXc. Earned income credit
d. All of the above
12.What is the credit for child and dependent care expenses shown in the tax and credits section of Samantha’s tax return?
a. $840
b. $882
c. $630
XXX d. $600
13.What is the total amount of qualified educational expenses used in the calculation of Samantha’s American opportunity credit? $___4240_______. (Incorrect)
14.What is the amount of self-employment tax in the Other Taxes section of Samantha’s Form 1040, page 2?
a. $0
b. $74
XXX c. $148
d. $161
15. Samantha’s unemployment income does not need to be reported on her tax return.
a. True
XXX b. False
16.Where is the cancelled debt from Form 1099-C reported on Samantha’s tax return?
a. It is not reported on the return
b. On Form 1040, line 7 as wages
XXXc. On Form 1040, line 21 as other income
d. On Schedule A as a miscellaneous deduction
17.Samantha qualifies for an exception to the 10% additional tax on the early distribution from her IRA.
XXXa. True
b. False
18.What is the total taxable interest income shown on Line 8a of Form 1040?
a. $80
XXX b. $110 (95)
c. $150
d. $260
19.How does the code Q on Quincy’s Form 1099-R from Essex Bank affect the return?
XXXa. The entire distribution is not taxable.
b. Half of the distribution is taxable.
c. The entire distribution is taxable.
d. There is no such code.The taxpayer must get a corrected Form 1099-R from the bank.
20.What is the amount shown on Form 1040, Line 13 – Capital gain or loss?
a. $1,916
b. $2,451
XXX c. $2,366 (Incorrect)
d. $2,001
21.How much of the $17,500 gross distribution reported on Form 1099-R is taxable in 2017? $ __16,797______. (Incorrect)
22.Is Quincy’s Social Security income taxable?
XXX a. Yes, a portion of the Social Security income is taxable.
b. Yes, all of the Social Security income is taxable.
c. No, because their total income is less than $32,000.
d. No, Social Security benefits are never taxable.
23. Are the Pikes entitled to claim an earned income credit for 2017?
a. No, because their investment income exceeds the amount allowed to claim.
XXXb. No, Quincy is over the age of 65. (Incorrect)
c. No, Lucas is not a qualifying child for purposes of the EIC.
d. Yes, they are eligible for the credit.
24.What is the total income tax withholding on the tax return? $___3760______
25.What income must Austin report for his business on Schedule C-EZ or C?
a. Income reported on Form 1099-MISC for classes he taught at the gym.
b. Cash income in payments from individual clients.
c. None.He must report all income from his personal training business on Line 21, Other income.
XXXd. Both his income reported on the Form 1099-MISC and the cash income from his clients.
26.What is Austin’s mileage expense deduction (at the standard mileage rate) for his business as a personal trainer?
XXXa. $1,525
b. $2,220
c. $3,531
d. $4,227
27.Which item(s) cannot be deducted by Austin as a business expense? (Select all that apply.)
a. Business license
b. Business liability insurance
c. Advertising
XXXd. Nutritional supplements
28.How does Austin’s self-employment tax affect his tax return?
a. Austin’s self-employment tax is not reported anywhere on Form 1040.
b. A portion of the self-employment tax is deducted as a business expense on Schedule C-EZ or C.
c. The self-employment tax is shown on Form 1040, Other Taxes section, and the full amount is deducted on Schedule A, Taxes You Paid section.
XXXd. The self-employment tax is shown on Form 1040, Other Taxes section, and the deductible part is an adjustment on Form 1040, page 1.
29. What is the amount Austin can take as a student loan interest deduction? $__2500_____.
30.What are Austin’s total itemized deductions on Schedule A, line 29?
XXXa. $6,856 (Incorrect)
b. $8,056
c. $8,156
d. $8,436
31.The amount of Austin’s retirement savings contributions credit in the Tax and Credits section of Form 1040 is $120.
XXXa. True
b. False
32.Austin is not able to pay the entire balance due by the due date of the return (without extensions).What are his options?
a. He can submit a Form 9465, Installment Agreement Request.
b. He can contact the IRS for a full pay 120-day agreement.
c. He can pay using his credit card.
XXXd. Any of the above.
33.What form must be used to split Robert’s refund?
XXX a. Form 8888
b. Form 8880
c. Form 8862
d. There is no form.A refund can’t be split.
34.Which health coverage exemption does Robert quality for?
a. Short Coverage Gap
b. Income below the filing threshold
XXXc. Not lawfully present in the U.S.and not a U.S.citizen
d. None, Robert doesn’t qualify for an exemption
35.Refer to Publication 4012, Tab H.Which of the following qualify as minimum essential coverage?
a. Medicare Advantage plans
b. COBRA coverage
c. Employer-sponsored coverage under a group health plan
XXXd. All of the above
e. A and C only