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H&R Block Income Tax Course Questions And Answers With Verified Solutions (GRADED A+)
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H&R Block Income Tax Course Questions And Answers With Verified Solutions (GRADED A+)
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H&R Block Income Tax Course Questions And Answers With Verified Solutions (GRADED A+) Circular 230 - ANSWER Regulations governing the practice of attorneys, certified pu blic accountants, enrolled agents, enrolled actuaries, and appraisers before the IRS. Disclosure - ANSWER The release of tax information by an IRS employee. Due Diligence - ANSWER Requirements that tax professionals must follow when preparing i ncome tax returns. Noncompliance - ANSWER Failure or refusal to comply with the tax code. Privilege - ANSWER Protection from being required to disclose confidential communications between two parties, such as attorney and client. Estimated Tax - ANSWER The amount of tax a taxpayer expects to owe for the year after subtracting expected amounts withheld and certain refundable credits. Estimated Tax Voucher - ANSWER A statement by an individual of (1) the amount of income tax he estimates he will incur during the current taxable year on income that is not subject to withholding, (2) the excess amount over that withheld on income which is subject to withholding, and (3 ) his estimated self -employment tax. Exemption from Withholding - ANSWER Status claimed on Form W -4 directing the employer not to withhold federal income taxes from the employee. Underpayment Penalty - ANSWER If a taxpayer did not pay enough ta x on a timely basis during the year, he may be required to pay an underpayment penalty. Withholding Allowances - ANSWER An increase by which income tax withholding on certain income is reduced. Two Ways to Pay as You Go - ANSWER Withholding and Estimated Tax Payments Form W -4 - ANSWER Employee's Withholding Allowance Certificate Form 8815 - ANSWER Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989 Form 2210 - ANSWER Underpayment of Estimated Tax by Individuals, Estates, and Trusts Form 4868 - ANSWER Application for Automatic Extension of Time To File U.S. Individual Income Tax Return Form 8888 - ANSWER Allocation of Refund Form 9465 - ANSWER Installment Agreement Request Amended Re turn - ANSWER A tax return filed on Form 1040X after the original return has been filed. Closed Year - ANSWER A tax year for which the statute of limitations has expired. Open Year - ANSWER A taxable year for which the statute of limitatio ns has not yet expired. Failure -to-File Penalty - ANSWER Generally 5% for each month or part of a month the return is late, but not more than 25% of the tax not paid. Failure to File - ANSWER Taxpayer fails to file the return by the due date, and there is a balance due. Failure to Pay - ANSWER Taxpayer fails to pay the tax owed by the due date. Failure -to-Pay Penalty - ANSWER 0.5% of the unpaid taxes for each month or part of a mont h after the due date, but not more than 25%. Negligence or Intentional Disregard - ANSWER Taxpayer shows negligence or disregard of the rules or regulations causing an underpayment. Negligence -or-Intentional -Disregard Penalty - ANSWER 20% of th e underpayment. Substantial Understatment - ANSWER Taxpayer understates their tax by the larger of $5,000 or 10% of the correct tax. Substantial -Understatement Penalty - ANSWER 20% of the underpayment. Form 1040X - ANSWER Amended U.S. Ind ividual Income Tax Return When can an amended return be filed? - ANSWER Within three years of the date the original return was filed, or within two years of the date the tax was paid, whichever is later. Can the 1040X be e -filed? - ANSWER No. Household Employee - ANSWER An individual who performs nonbusiness services in a taxpayer's home. Active Income and Losses - ANSWER Those for which a taxpayer performs services. Partnership - ANSWER A form of business in which two or more persons join their money and skills in conducting the business as co -owners. Passive Income and Losses - ANSWER Those from business activities in which the taxpayer does not materially participate, and all rental activities. Portfolio Income and Losses - ANSWER Those from such sources as dividends, interest, capital gains and losses, and royalties.
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