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HR BLOCK FINAL TEST (ITC) EXAM QUESTIONS WITH COMPLETE SOLUTIONS
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HR BLOCK FINAL TEST (ITC) EXAM QUESTIONS WITH COMPLETE SOLUTIONS
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HR BLOCK FINAL TEST (ITC) EXAM QUESTIONSWITH COMPLETE SOLUTIONS
A combined due diligence penalty of $2,180 would indicate a
penalty for which of the following?
EIC, CTC/ODC/ACTC, and head of household.
EIC, AOTC, and CTC/ODC/ACTC.
EIC, AOTC, CTC/ODC/ACTC, and head of household.
EIC, PTC, CTC/ODC/ACTC, and head of household. Correct
Answer EIC, AOTC, CTC/ODC/ACTC, and head of household.
All of the following are due diligence requirements a tax
preparer must meet for EIC, AOTC, CTC/ODC/ACTC, and
HOH, EXCEPT:
Investigate and verify the accuracy of information the taxpayer
provides to show eligibility for EIC, AOTC, CTC/ODC/ACTC,
and HOH.
Complete all worksheets used to compute the credits. If the
worksheet is completed by hand, keep a copy in the taxpayer's
client file.
Maintain a copy of documents provided by the taxpayer that the
tax preparer relied on when determining credit eligibility. Then
record the date the information was obtained and the name of
who provided the information.
When information provided by the taxpayer appears to be
incorrect, inconsistent, or incomplete, the tax preparer must
,make additional inquiries to determine if the taxpayer is eligible
for the benefit. Then document both the questions asked and
responses provided. Correct Answer Investigate and verify the
accuracy of information the taxpayer provides to show eligibility
for EIC, AOTC, CTC/ODC/ACTC, and HOH.
Define basis. Correct Answer Basis is a measure of the
taxpayer's investment in property, which is used to determine
gain or loss for tax purposes
Determining if a trade or business is considered a specified
service trade or business (SSTB) is significant for taxpayers that
have taxable income over the lowest thresholds. What type of
trades or businesses are considered SSTBs? Correct Answer A
specified service trade or business (SSTB) is any trade or
business involving the performance of services in the fields of
health, law, consulting, athletics, financial services, brokerage
services or any trade or business in which the principal asset of
the business is the reputation or skill of one or more of its
owners or employees, or that involves the performance of
services that consist of investing and investment management,
trading, or dealing in securities, partnership interests, or
commodities.
Does the fact that an employee is having income tax withheld
from their paycheck mean their tax liability will be covered?
Correct Answer Not necessarily. If a taxpayer experiences a
change of circumstances with regard to their personal or
financial situation, such as the loss of a dependent, or if they
have substantial income that is not subject to withholding, they
, may owe additional taxes at the end of the year. Taxpayers with
more than one job may also owe additional taxes
Earned Income Correct Answer Any income (wages/salary)
that is generated by working
Employer-provided dependent care assistance:
It may be used for the Child and Dependent Care Credit.
It is subtracted from the total expenses for the child or
dependent care on Form 2441.
It is included in wages on Form W-2.
It is not reported to the IRS. Correct Answer
Employer-provided dependent care assistance:
May be used for the Child and Dependent Care Credit.
Is subtracted from the total expenses for child or dependent care
on Form 2441.
Is included in wages on Form W-2.
Is not reported to the IRS. Correct Answer
For MACRS purposes, you need to divide real property into two
categories. What are they? Correct Answer Land, which is not
depreciated, and structures, which are depreciated.
For tax purposes, when is a person's marital status determined?
Correct Answer On the last day of the tax year, or the date of
death.
How are deductible property expenses determined if part is
strictly rental and part is strictly personal? Correct Answer
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