HRB FINAL EXAM Complete Questions And Answer With Verified Solutions

HRB FINAL EXAM Complete Questions And Answer With Verified Solutions
What is the Difference between earned income and unearned income?
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?
What information do you need to know to determine whether a taxpayer is
required to file a return?
Gross income, filing status, age and if they are a dependent
For tax purposes, when is a person's marital status determined?
On the last day of the tax year
Where on the tax form can you find the regular standard deduction amounts?
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.
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?
$1550 if unmarried, $1250 if married
What is the personal exemption amount for 2016?
$4,050
What two amounts are combined to make up the gross income filing requirments
for most taxpayers?
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?
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?
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
CHAPTER 3: DEPENDENT EXEMPTIONS AND SUPPORT
What four requirements must be met for an individual to be claimed as a
dependent
Must pass the dependent test, joint return test, citizenship, qualifying child or
relative
What are the five tests for a qualifying child?
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?
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

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