HR BLOCK FINAL TEST (ITC 2023) ACTUAL EXAM 300 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONLES (VERIFIED ANSWERS) |ALREADY GRADED A+

HR BLOCK FINAL TEST (ITC 2023) ACTUAL EXAM

300 QUESTIONS AND CORRECT DETAILED ANSWERS

WITH RATIONLES (VERIFIED ANSWERS) |ALREADY

GRADED A+

How is the gross income filing requirement determined for most

nondependent taxpayers - ANSWER- The taxpayer's standard deduction,

including the additional amounts for age. However, for married filing

separately, or married filing jointly when the spouses did not live

together at the end of the year, the amount is $5.

What is the difference between injured spouse allocation and innocent

spouse relief? - 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, 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.

Is unemployment compensation taxable? - ANSWER- Yes,

unemployment compensation is fully taxable.

Are scholarships and fellowships taxable? - ANSWER- Sometimes.

Generally, scholarships and fellowships are excluded from income by

degree-seeking candidates to the extent that they are used to pay

qualified education expenses, such as tuition and course-related fees.

However, if they are used to pay for room and board or other expenses,

they are taxable.

What document will the taxpayer receive from their employer reporting

disability pension payments? - ANSWER- The income is reported on

Form 1099-R

Under what circumstances can a disability pension qualify as earned

income for the EIC? - ANSWER- Disability pension income received

before the taxpayer attains minimum retirement age for their company is

reported as wage income. It is also considered earned income for

purposes of EIC.

What types of income must be reported on Schedule 1 (Form 1040) and

then reported on Form 1040? - ANSWER- Gambling winnings, alimony,

jury duty pay, canceled debts, and hobby income are some examples of

income that must be reported on Schedule 1 (Form 1040) and then

reported on Form 1040.

What are the adjustments that can be claimed on Schedule 1 (Form

1040)? - ANSWER- Some examples of adjustments that can be claimed

on Schedule 1 are:

Educator expense deduction.

The health savings account (HSA) deduction.

Moving expenses for members of the military.

Self-employment tax deduction.

Self-employed health insurance deduction.

Penalty on early withdrawal of savings.

Alimony payments.

IRA deduction.

Student loan interest deduction.

How much may an eligible educator deduct for qualified classroom

expenses as an adjustment to income? - ANSWER- Up to $250 per

eligible educator.

Married taxpayers filing a joint return who are both eligible educators

may each claim the $250 deduction, totaling $500.

Who is an eligible educator? - ANSWER- Someone who worked at least

900 hours during the school year as a teacher, teacher's aide, counselor,

or principal in an elementary or secondary school.

Where is the educator expense deduction reported - ANSWER- Educator

expenses are reported on Schedule 1, Additional Income and

Adjustments to Income, line 11.

Who may not claim a student loan interest deduction? - ANSWERSomeone who is claimed as a dependent may not claim the deduction in

the current tax year, nor may someone who uses the married filing

separately filing status. The amount of income a taxpayer earns may also

affect their deduction. Taxpayers whose modified AGI exceeds a

threshold amount for their filing status may not be able to claim the

deduction, or they may only be eligible to claim a reduced amount.

What is a qualified student loan? - ANSWER- A loan used to pay

qualified education expenses. Credit card debt may be included,

provided the card was used exclusively to pay for qualified expenses.

Money borrowed from a related person is not a qualified student loan.

What three requirements must be met for an individual to be claimed as

either a qualifying child or a qualifying relative? - ANSWER- To be

either a qualifying child or qualifying relative, they must be a U.S.

citizen, U.S. resident alien, U.S. national, or a resident of 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 - ANSWER- 1.

Relationship test.

2. Age test.

3. Residency test.

4. Support test.

5. Joint return test.

How can a married individual meet the joint return test to remain a

qualifying child? - ANSWER- They can meet this test by not filing a