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HRB FINAL EXAM PRACTICE QUESTIONS AND ANSWERS
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HRB FINAL EXAM PRACTICE QUESTIONS AND ANSWERS What is the Difference between earned income and unearned income? - Ans:-Earned income is received for services performed. Examples are wages commissions, tips and generally farming and other business income . Taxable income other than that received...

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  • October 23, 2024
  • 41
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • hrb final exam practice questions and answers

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©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED

FIRST PUBLISH OCTOBER 2024




HRB FINAL EXAM PRACTICE
QUESTIONS AND ANSWERS


What is the Difference between earned income and unearned income? - Ans:✔✔-Earned income is

received for services performed. Examples are wages commissions, tips and generally farming and other

business income . Taxable income other than that received for services performed. Unearned Income

includes money received ro the investment of money or other property, such as interest, dividends, and

royalties. It also includes pensions alimony, unemployment compensation and other income that is not

earned


If an employee thinks their Form W2 is incorrect, what should they do? - Ans:✔✔-Employee should

discuss with employer who issued the document and request a W2C. If no help from employer, notify

IRS. Tax prepaper can then file a substitute.


What information do you need to know to determine whether a taxpayer is required to file a return? -

Ans:✔✔-Gross income, filing status, age and if they are a dependent


For tax purposes, when is a person's marital status determined? - Ans:✔✔-On the last day of the tax year




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, ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED

FIRST PUBLISH OCTOBER 2024




Where on the tax form can you find the regular standard deduction amounts? - Ans:✔✔-Line 22 on

1040A, In the left margin at the top of the page 2 of forms 1040 and 1040A. Look at actual form to look

for line


How much is added to the standard deduction if the taxpayer (or spouse is age 65 or older, or blind? -

Ans:✔✔-$1550 if unmarried, $1250 if married


What is the personal exemption amount for 2016? - Ans:✔✔-$4,050


What two amounts are combined to make up the gross income filing requirments for most taxpayers? -

Ans:✔✔-The standard deduction and the personal exemption amounts


Under what circumstances might a taxpayer be required to file a return even though they do not meet

the gross income filing requirements? - Ans:✔✔-1. Has net employment of $400 or more net self

employment 2. You had unemployment income you owe medicare Advantage MSA, receive HAS, Archer,

MSA 3. Reeived an Advanced Premium Tax credit even if they didn't otherwise have a filing requirment

for the year *Tips, HSA, SE $400, PTC


What is the difference between injured spouse allocation and innocent spouse relief? - Ans:✔✔-The

difference between injured spouse and innocent spouse is significant in the eyes of the IRS. Both release

you from an income tax liability arising from a "married filing jointly" return but different outcomes.

Innocent spouse filed a joint return byt was unaware that their spouse deliberately under reported tax

liability. Injured spouse seeks to protect his or her share of the refund in case it gets seized or offset due

to the other spouse's debts or unpaid obligations

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, ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED

FIRST PUBLISH OCTOBER 2024




CHAPTER 3: DEPENDENT EXEMPTIONS AND SUPPORT - Ans:✔✔-


What four requirements must be met for an individual to be claimed as a dependent - Ans:✔✔-Must

pass the dependent test, joint return test, citizenship, qualifying child or relative


What are the five tests for a qualifying child? - Ans:✔✔-1. Relationship 2. Age 3. Residency 4. Support 5.

Joint Return


How can a married individual meet the joint return test to remain a qualifying child? - Ans:✔✔-They can

meet this test by not filing a joint return with their spouse or they can file a joint return with their

spouse if they are filing only to claim a refund on any taxes withheld


How can you determine who paid more than half of a person's support? - Ans:✔✔-Total support is

determined and reduced by the funds received by and for the person from all sources other than the

taxpaer. The remaining support is considered to be provided by the taxpayer. Other sources might

include government support Worksheet for Determining Support


What happens if an individual is a qualifying child of more than one taxpayer? - Ans:✔✔-Generally, the

custodial parent is the one in which the child spent the most nights


What happens when more than one taxpayer claims the same qualifying child? - Ans:✔✔-Tie Breaker

Rules apply : 1. The parent, if only one of the persons is the childs parent 2. The parent with whom the

child lived the longest during the tax 3. The parents with the highest AGI if no parent can claim the child

as a qualifying child


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, ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED

FIRST PUBLISH OCTOBER 2024




What four tests must be met for an individual to be considered a qualifying relative? - Ans:✔✔-1. Not be

a qualifying child, the person cannot be the taxpayers qualifying child or the qualifying child of another

taxpayer 2. Relationship: Child, brother, sister, step sister, step brother, step father , step mother, in-laws

3. Gross Income: gross income must be less than $4050 4. Support: Taxpayer must provide more than

half the support


How can the gross income for a qualifying relative test be satisfied? - Ans:✔✔-Gross income must be less

than $4050 (Do not include tax exempt income)


What is the purpose of Form 2120 Multiple Support Declaration? - Ans:✔✔-You only need 2120 multiple

support declaration if you are claiming someone other than a qualifying child as a dependent and there

are two or more people including yourself who provide support for the dependent


How much is the child tax credit worth? - Ans:✔✔-$1,000


What additional requirements must be met for a taxpayer to be eligible to claim the Child Tax Credit for

the qualifying child? - Ans:✔✔-1. Taxpayer 2. Child must be under17 at the end of the year 3. Qualifying

child must be claimed on tax payer returns 4. Qualifying child must be US Citizen US National or resident

of US


Is the Child Tax Credit refundable or nonrefundable - Ans:✔✔-CTC is nonrefundable the The additional

child tax credit is refundable




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