VITA Basic Exam (Latest Update) Questions and Verified Answers| 100% Correct| Grade A

VITA Basic Exam (Latest Update) Questions

and Verified Answers| 100% Correct| Grade

A

Q: You are clarifying Larry's Form 13614-C. Larry is at a VITA/TCE site to have his taxes

prepared. He completes Form 13614-C and tells the tax preparer:

He is 26 years old

His filing status is Head of Household

He wants to claim his 2-year-old nephew for EITC

He has no child care expenses

He earned $19,000 in wages

Do you think it's safe to rely on good faith for Larry's information?

Answer:

No, Larry's situation requires more inquiry

Based on the information you will learn in the course, Larry's information regarding his

qualifying child and filing status is questionable. Further inquiries should include:

Why is the uncle claiming the child and not the parents?

Why isn't there child care expense and who cares for the child while the taxpayer works?

Is there anyone else living in the household that contributes?

Is there anyone else eligible to claim the child?

Do the tie-breaker rules apply?

If asked, can the taxpayer provide proof that the qualifying child lived with him for more than

half of the year?

Q: You are clarifying Steven's Form 13614-C. Steven is at a VITA/TCE site to have his taxes

prepared. He completes Form 13614-C and tells the tax preparer:

He is 22 years old

He has two sons, ages 10 and 11

He has Social Security cards for both boys and himself

His W-2 wage indicates earnings of $20,000

Do you think it's safe to rely on good faith for Steven's information?

Answer:

No, Steven's situation requires more inquiry

Steven's age and the age of the qualifying children appear to be inconsistent. Further inquiries

are needed to determine:

Are the boys his sons by birth, foster sons, adopted sons, step-sons?

Is there anyone else eligible to claim the children as qualifying children?

Do the tie-breaker rules apply?

If asked, can the taxpayer provide proof that the qualifying children lived with him for more than

half of the year?

Q: You are helping a taxpayer who has given you two different Social Security numbers. Then,

he tells you he has two children, but later corrects it to three. You are concerned about the

truthfulness of this information. You should _____.

Answer:

Decline to prepare the tax returnIf you suspect an individual is not providing truthful information, you should refuse to prepare

the tax return.

Q: True or False? It is perfectly acceptable to accept a taxpayer's invitation to lunch as a thank

you for preparing his or her tax return.

Answer:

False- Although lunch is not a monetary "payment" for services rendered, some may interpret it

as such. It is best to politely decline such offers in order to maintain the integrity of the

VITA/TCE programs.

Q: You are helping Anita fill out her tax return. She has questions about how her divorce

effects her tax situation. To provide answers for her, you decide to ask a more experienced

volunteer for help. Which of the following should you say to the more experienced volunteer?

Answer:

I am helping a taxpayer who divorced her husband last year. She has some questions about her

filing status for last year.- You should never use a taxpayer's name in front of other taxpayers or

volunteers. However, you may discuss specific tax situations with other taxpayers and

volunteers.

Q: If needed, refer to the Chart A - For Most People Who Must File to answer this question.

Lucy is 36 years old and single, and her gross income is $20,000. Is Lucy required to file a tax

return?

Answer:

Yes- That's right. Lucy must file a tax return since her income exceeds the amount for her age

and filing status.

Q: If needed, refer to the Chart A - For Most People Who Must File to answer this question.

Henrietta and Javier are married and plan to file a joint return. Henrietta is 67 and had a gross

income of $11,000 for the tax year. Javier is 66. His gross income was $5,000 for the year. Do

they need to file a tax return?

Answer:

No- That's right. Since their combined gross income is less than the minimum amount for their

ages and filing status, they do not have to file a return.

Q: If needed, refer to the Sources of taxable and non taxable income to answer this question.

Which of the following is considered taxable income?

Answer:

Annuities- You need to include annuities when calculating a taxpayer's taxable income.

Q: Which of the following individuals could use Chart A to determine if they must file a tax

return?

Answer:

Mrs. Fulton, 70, who is single and whose only sources of income are her pension and

investments. Her income was less than $10,000.- Mrs. Harlan can be claimed as a dependent on

her son's return, so she must use Chart B. Mr. Emmet must use Chart C.

Q: True or False? Bob is 27 years old. No one can claim him as a dependent. His gross income

was $17,000 during the tax year. Based only on this information, Bob is required to file a tax

return.

Answer:

True- Bob is required to file a return

Q: True or False? Janet and Harry are married, file jointly, and lived together all year. During

the tax year, Janet turned 66 and Harry turned 64. Their gross income was $18,000. Based only

on this information, they are required to file a tax return.

Answer:

False- Janet and Harry are not required to file.

Q: True or False? Juanita can file as a Qualifying Widow(er). She is 47 years old. Her gross

income was $27,000. Based only on this information, she is required to file a tax return.

Answer:

True- Juanita is required to file.

Q: What should you do if a taxpayer is not required to file a tax return, and you are uncertain if

they will benefit from filing?

Answer:

Begin a return to determine if filing a tax return would benefit the taxpayer- Begin a tax return to

determine if the taxpayer would benefit from filing. Otherwise the taxpayer might miss out on

receiving certain tax credits.

Q: Which of the following can be used to verify a taxpayer's Social Security number and

correct name spelling?

Answer:

Social Security card- Only valid SSA documents such as Social Security cards or other SSA

proof of taxpayer identification number for all persons listed in the tax return should be used to