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HR BLOCK FINAL TEST (ITC 2024) COMPLETE 150 ACTUAL
EXAM QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) GRADED A+
What is the maximum amount of the American Opportunity Tax Credit a taxpayer could receive per student?
$1,650
$1,800
$2,000
$2,500 - Correct Answer - $2,500
Which of the following is a requirement for all taxpayers who want to claim the EIC?Live in the U.S. for more than half a year.Have a valid social security number.Have a qualifying child dependent.Have AGI less than $21,430 ($27,380 MFJ). - Correct Answer - Have a valid social security number.
Who is an eligible educator? - Correct 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? - Correct Answer - Educator expenses are reported on Schedule 1, Additional Income and Adjustments to Income, line 11.
What is a qualified student loan? - Correct 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. 1 / 3
pg. 2 What three requirements must be met for an individual to be claimed as either a qualifying child or a qualifying relative? - Correct 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? - Correct Answer - 1. 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.
What four tests must be met for an individual to be considered a qualifying relative? - Correct Answer - 1. Not a qualifying child of someone else.
- Relationship OR member of the household for the entire year.
- Gross income.
- Support.
How can the gross income test for a qualifying relative be satisfied? - Correct Answer - The qualifying relative's gross income must be less than $4,300. When determining the gross income, tax-exempt income, such as certain social security benefits, is not included.
How much is the Child Tax Credit worth? - Correct Answer - Up to $3,600 per qualifying child under age 6 and up to $3,000 per qualifying child ages 6 through 17.
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pg. 3 How is the lifetime learning credit calculated? - Correct Answer - It is 20% of the first $10,000 of qualifying expenses per return, per year.
What is the maximum lifetime learning credit, and which taxpayers may take advantage of this credit? - Correct Answer - The maximum is $2,000 per return. The lifetime learning credit is available to certain taxpayers paying for higher education courses, including graduate-level courses. Students may be degree candidates, or they may be non-degree candidates taking college courses to maintain or improve job skills.
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 is a qualified retirement plan? - Correct Answer - A plan that meets the requirement of IRC Section 401(a) and the Employment Retirement Income Security Act of 1974 (ERISA), and is therefore eligible for favorable tax treatment.
Why is it important to distinguish qualified home mortgage interest from personal interest? - Correct Answer - Qualified home mortgage interest is deductible, with limitations, on Schedule A. Personal interest, such as credit card interest, is not deductible.
What happens when more than one taxpayer claims the same qualifying child (QC)? -
Correct Answer - The IRS will apply tiebreaker rules as follows:
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