H&R Block Income Tax Course Exam
Questions & Answers36
Due Diligence - ANSWERS-Requirements that tax professionals must follow when preparing
income tax returns.
Estimated Tax - ANSWERS-The amount of tax a taxpayer expects to owe for the year after
subtracting expected amounts withheld and certain refundable credits.
Estimated Tax Voucher - ANSWERS-A statement by an individual of (1) the amount of income tax
he estimates he will incur during the current taxable year on income that is not subject to
withholding, (2) the excess amount over that withheld on income which is subject to
withholding, and (3) his estimated self-employment tax.
Exemption from Withholding - ANSWERS-Status claimed on Form W-4 directing the employer
not to withhold federal income taxes from the employee.
Underpayment Penalty - ANSWERS-If a taxpayer did not pay enough tax on a timely basis during
the year, he may be required to pay an underpayment penalty.
Two Ways to Pay as You Go - ANSWERS-Withholding and Estimated Tax Payments
Form W-4 - ANSWERS-Employee's Withholding Allowance Certificate
Form 4868 - ANSWERS-Application for Automatic Extension of Time To File U.S. Individual
Income Tax Return
,Amended Return - ANSWERS-A tax return filed on Form 1040X after the original return has been
filed.
Closed Year - ANSWERS-A tax year for which the statute of limitations has expired.
Open Year - ANSWERS-A taxable year for which the statute of limitations has not yet expired.
Failure-to-File Penalty - ANSWERS-Generally 5% for each month or part of a month the return is
late, but not more than 25% of the tax not paid.
Failure to File - ANSWERS-Taxpayer fails to file the return by the due date, and there is a balance
due.
Form 1040X - ANSWERS-Amended U.S. Individual Income Tax Return
When can an amended return be filed? - ANSWERS-Within three years of the date the original
return was filed, or within two years of the date the tax was paid, whichever is later.
Can the 1040X be e-filed? - ANSWERS-No.
Portfolio Income and Losses - ANSWERS-Those from such sources as dividends, interest, capital
gains and losses, and royalties.
Schedule E - ANSWERS-Supplemental Income and Loss
Royalty - ANSWERS-Payments received for the right to extract natural resources from the
taxpayer's property or to use a taxpayer's literary, musical, or artistic creation.
,Annuity - ANSWERS-A series of payments under a contract made at regular intervals over a
period of more than one year.
Beneficiary - ANSWERS-The owner or recipient of funds in an account, such as an IRA, or from
an insurance policy or will.
Contribution - ANSWERS-When a person puts money into a retirement plan.
Defined Benefit Plan - ANSWERS-An employee benefit plan that provides determinable benefits
not based on employer profits.
Defined Contribution Plan - ANSWERS-An employee benefit plan that provides a separate
account for each person covered and pays benefits based on account earnings.
Disability Pension - ANSWERS-A taxable pension from an employer-funded disability plan or a
disability provision of a retirement plan.
Distribution - ANSWERS-When a person takes or receives money from a retirement plan.
Pension - ANSWERS-Generally a series of definitely determinable payments made to a taxpayer
after retirement from work.
Rollover - ANSWERS-A qualified transfer of funds from one tax-favored account to another,
usually of the same type.
Roth IRA - ANSWERS-A type of individual retirement arrangement in which contributions are not
tax deductible, earnings grow tax deferred, and qualified withdrawals are tax free.
, Traditional IRA - ANSWERS-An individual retirement arrangement, contributions to which may
or may not be deductible depending on the taxpayer's AGI and whether or not he is covered
under an employer-sponsored retirement plan.
What is the full retirement age? - ANSWERS-For workers born before 1938, it is 65. For those
born after it is gradually being increased to 67.
How much of a client's social security and equivalent tier 1 RR benefits may be taxable? -
ANSWERS-Up to 85%.
Form SSA-1099 - ANSWERS-Social Security Benefits
Form RRB-1099 - ANSWERS-Railroad Retirement Benefits
None of Social Security Benefits Taxable - ANSWERS-Single, Head of Household, Qualified
Widow - $0-$25,000; Married Filing Jointly - $0-$32,000
Up to 50% of Social Security Benefits Taxable - ANSWERS-Single, Head of Household, Qualified
Widow - $25,001-$34,000; Married Filing Jointly - $32,001-$44,000
Up to 85% of Social Security Benefits Taxable - ANSWERS-Single, Head of Household, Qualified
Widow - $34,001+; Married Filing Jointly - $44,001+; Married Filing Single - $1+
Fully Taxable Pension - ANSWERS-Pensions to which the taxpayer did not make after-tax
contributions or from which all pre-tax amounts have been recovered in previous years.
Partly Taxable Pensions - ANSWERS-Those pensions funded through employer plans to which
the employee contributed some after-tax money.
Questions & Answers36
Due Diligence - ANSWERS-Requirements that tax professionals must follow when preparing
income tax returns.
Estimated Tax - ANSWERS-The amount of tax a taxpayer expects to owe for the year after
subtracting expected amounts withheld and certain refundable credits.
Estimated Tax Voucher - ANSWERS-A statement by an individual of (1) the amount of income tax
he estimates he will incur during the current taxable year on income that is not subject to
withholding, (2) the excess amount over that withheld on income which is subject to
withholding, and (3) his estimated self-employment tax.
Exemption from Withholding - ANSWERS-Status claimed on Form W-4 directing the employer
not to withhold federal income taxes from the employee.
Underpayment Penalty - ANSWERS-If a taxpayer did not pay enough tax on a timely basis during
the year, he may be required to pay an underpayment penalty.
Two Ways to Pay as You Go - ANSWERS-Withholding and Estimated Tax Payments
Form W-4 - ANSWERS-Employee's Withholding Allowance Certificate
Form 4868 - ANSWERS-Application for Automatic Extension of Time To File U.S. Individual
Income Tax Return
,Amended Return - ANSWERS-A tax return filed on Form 1040X after the original return has been
filed.
Closed Year - ANSWERS-A tax year for which the statute of limitations has expired.
Open Year - ANSWERS-A taxable year for which the statute of limitations has not yet expired.
Failure-to-File Penalty - ANSWERS-Generally 5% for each month or part of a month the return is
late, but not more than 25% of the tax not paid.
Failure to File - ANSWERS-Taxpayer fails to file the return by the due date, and there is a balance
due.
Form 1040X - ANSWERS-Amended U.S. Individual Income Tax Return
When can an amended return be filed? - ANSWERS-Within three years of the date the original
return was filed, or within two years of the date the tax was paid, whichever is later.
Can the 1040X be e-filed? - ANSWERS-No.
Portfolio Income and Losses - ANSWERS-Those from such sources as dividends, interest, capital
gains and losses, and royalties.
Schedule E - ANSWERS-Supplemental Income and Loss
Royalty - ANSWERS-Payments received for the right to extract natural resources from the
taxpayer's property or to use a taxpayer's literary, musical, or artistic creation.
,Annuity - ANSWERS-A series of payments under a contract made at regular intervals over a
period of more than one year.
Beneficiary - ANSWERS-The owner or recipient of funds in an account, such as an IRA, or from
an insurance policy or will.
Contribution - ANSWERS-When a person puts money into a retirement plan.
Defined Benefit Plan - ANSWERS-An employee benefit plan that provides determinable benefits
not based on employer profits.
Defined Contribution Plan - ANSWERS-An employee benefit plan that provides a separate
account for each person covered and pays benefits based on account earnings.
Disability Pension - ANSWERS-A taxable pension from an employer-funded disability plan or a
disability provision of a retirement plan.
Distribution - ANSWERS-When a person takes or receives money from a retirement plan.
Pension - ANSWERS-Generally a series of definitely determinable payments made to a taxpayer
after retirement from work.
Rollover - ANSWERS-A qualified transfer of funds from one tax-favored account to another,
usually of the same type.
Roth IRA - ANSWERS-A type of individual retirement arrangement in which contributions are not
tax deductible, earnings grow tax deferred, and qualified withdrawals are tax free.
, Traditional IRA - ANSWERS-An individual retirement arrangement, contributions to which may
or may not be deductible depending on the taxpayer's AGI and whether or not he is covered
under an employer-sponsored retirement plan.
What is the full retirement age? - ANSWERS-For workers born before 1938, it is 65. For those
born after it is gradually being increased to 67.
How much of a client's social security and equivalent tier 1 RR benefits may be taxable? -
ANSWERS-Up to 85%.
Form SSA-1099 - ANSWERS-Social Security Benefits
Form RRB-1099 - ANSWERS-Railroad Retirement Benefits
None of Social Security Benefits Taxable - ANSWERS-Single, Head of Household, Qualified
Widow - $0-$25,000; Married Filing Jointly - $0-$32,000
Up to 50% of Social Security Benefits Taxable - ANSWERS-Single, Head of Household, Qualified
Widow - $25,001-$34,000; Married Filing Jointly - $32,001-$44,000
Up to 85% of Social Security Benefits Taxable - ANSWERS-Single, Head of Household, Qualified
Widow - $34,001+; Married Filing Jointly - $44,001+; Married Filing Single - $1+
Fully Taxable Pension - ANSWERS-Pensions to which the taxpayer did not make after-tax
contributions or from which all pre-tax amounts have been recovered in previous years.
Partly Taxable Pensions - ANSWERS-Those pensions funded through employer plans to which
the employee contributed some after-tax money.
