H&R Block Final Review Verified Questions And Answers Graded A+

H&R Block Final Review Verified Questions And Answers Graded A+
What is the difference between earned income and unearned income? - Correct AnswerEarned income is received for services performed. Some examples of earned income
include wages, commissions, tips, farming, and other business income.
Unearned income is taxable income that does not meet the definition of earned income.
Examples of unearned income include interest income, dividends, rents and royalties,
pensions, alimony, and unemployment income.
If an employee thinks their Form W-2 is incorrect, what should they do? - Correct AnswerIf the taxpayer's name, social security number, or earnings or withholdings are incorrect,
the taxpayer should notify their employer and request a corrected Form W-2. The
employee should request that the employer update their records and verify that the
earnings were properly credited with the Social Security Administration. However, the
taxpayer is still responsible for filing a timely tax return. If the employee's attempts to
obtain a corrected Form W-2 from their employer are not successful, the taxpayer should
notify the IRS. It may be necessary to prepare a substitute Form W-2.
What information do you need to know to determine whether a taxpayer is required to file
a return? - Correct Answer-The taxpayer's marital status, age at the end of the tax year,
gross income for the year, and if the taxpayer is a dependent.
Where on Form 1040 can you find the regular standard deduction amounts? - Correct
Answer-In the left-hand margin on page 1 of Form 1040. They are: single and married
filing separately, $12,200; married filing jointly and qualifying widow(er), $24,400; and
head of household, $18,350.
How much is added to the standard deduction if the taxpayer (or spouse) is age 65 or
older, or blind? - Correct Answer-$1,300 for married taxpayers and qualifying widow(er)s,
or $1,650 for all other unmarried taxpayers, is added for each condition.
What is the personal exemption amount for 2019? - Correct Answer-There is no personal
exemption for 2019. A personal exemption was an amount previously allowed by law to
reduce income that would otherwise be taxed. The Tax Cuts and Jobs Act of 2017
repealed this deduction beginning in 2018.
How is the gross income filing requirement determined for most taxpayers? - Correct
Answer-The taxpayer's standard deduction, including the additional amounts for age and
blindness. However, for MFS, the amount is $5.
What is the difference between injured spouse allocation and innocent spouse relief? -
Correct Answer-The IRS provides an injured spouse allocation for the taxpayer to protect
their portion of a refund from a spouse's past-due federal income tax, unpaid student
loans, or unpaid child and spousal support, or state income tax.
The IRS provides innocent spouse relief to taxpayers who file a joint return and later learn
that their spouse has underestimated income (or overstated a credit or deduction) on the
return.
What is a thorough interview? - Correct Answer-A thorough interview consists of asking
general information questions, then asking additional questions whenever information is
incomplete or seems inaccurate or inconsistent
What is a conflict of interest? - Correct Answer-Circular 230 states that a conflict of
interest exists if the representation of one client will be directly adverse to another client,
or if there is a significant risk that the representation of one or more clients will be
materially limited by the practitioner's responsibilities to another client, a former client, or
a third person, or by a personal interest of the practitioner.
What actions can resolve a conflict of interest? - Correct Answer-A conflict of interest is
resolved when it is acknowledged, disclosed to all parties, and the parties have
consented to waiving the conflict.
What taxpayer information is confidential? - Correct Answer-Any information that could
potentially identify the taxpayer is confidential. Information includes (but is not limited to)
name, address and phone number, social security number, place of employment, and any
information from a tax return.
What is a tax preparer's responsibility upon finding out that a taxpayer has not complied
with one or more tax laws? - Correct Answer-A tax preparer must only advise the
taxpayer of the noncompliance and the consequences for not correcting the situation. The
taxpayer is the only individual who can decide to make corrections to their return.
What action should a tax preparer take if a taxpayer insists on reporting information that is
inaccurate? - Correct Answer-A tax preparer may not sign a return reporting clearly
inaccurate information or otherwise assist a taxpayer in filing an inaccurate return.
A tax preparer may not sign a return reporting clearly inaccurate information or otherwise
assist a taxpayer in filing an inaccurate return. - Correct Answer-The dependent must be
a qualifying child or qualifying relative; they must be a U.S. citizen or a resident of the
United States, Canada, or Mexico; they cannot file a joint return (unless solely to claim a
refund of taxes paid); and the taxpayer claiming the dependent must not be a dependent
of another taxpayer.
What are the five tests for a qualifying child? - Correct Answer-Relationship test.
Age test.
Residency test.
Support test.
Joint return test.
How can a married individual meet the joint return test to remain a qualifying child? -
Correct Answer-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 of any
taxes withheld.
How can you determine who paid more than half of a person's support? - Correct AnswerThe amount of total support is reduced by the funds received for the person from all
sources other than the taxpayer. Other sources of support might include relatives,
government programs, and the dependent's own income.
What happens if an individual is a qualifying child of more than one taxpayer? - Correct
Answer-If more than one taxpayer claims the dependent, the IRS will apply the tiebreaker
rules to award the qualifying child to one of the taxpayers.

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