H&R BLOCK TAX PREPARER TEST BANK 2026
QUESTIONS WITH CORRECT ANSWERS
GRADED A+
◉ Estimated Tax. Answer: The amount of tax a taxpayer expects to owe
for the year after subtracting expected amounts withheld and certain
refundable credits.
◉ Estimated Tax Voucher. Answer: 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. Answer: Status claimed on Form W-4
directing the employer not to withhold federal income taxes from the
employee.
◉ Underpayment Penalty. Answer: 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. Answer: Withholding and Estimated Tax
Payments
,◉ Form W-4. Answer: Employee's Withholding Allowance Certificate
◉ Form 4868. Answer: Application for Automatic Extension of Time To
File U.S. Individual Income Tax Return
◉ Amended Return. Answer: A tax return filed on Form 1040X after the
original return has been filed.
◉ Closed Year. Answer: A tax year for which the statute of limitations
has expired.
◉ Open Year. Answer: A taxable year for which the statute of limitations
has not yet expired.
◉ Failure-to-File Penalty. Answer: 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. Answer: Taxpayer fails to file the return by the due
date, and there is a balance due.
◉ Form 1040X. Answer: Amended U.S. Individual Income Tax Return
,◉ When can an amended return be filed?. Answer: 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?. Answer: No.
◉ Portfolio Income and Losses. Answer: Those from such sources as
dividends, interest, capital gains and losses, and royalties.
◉ Schedule E. Answer: Supplemental Income and Loss
◉ Royalty. Answer: 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. Answer: A series of payments under a contract made at
regular intervals over a period of more than one year.
◉ Beneficiary. Answer: The owner or recipient of funds in an account,
such as an IRA, or from an insurance policy or will.
◉ Contribution. Answer: When a person puts money into a retirement
plan.
, ◉ Defined Benefit Plan. Answer: An employee benefit plan that
provides determinable benefits not based on employer profits.
◉ Defined Contribution Plan. Answer: An employee benefit plan that
provides a separate account for each person covered and pays benefits
based on account earnings.
◉ Disability Pension. Answer: A taxable pension from an employer-
funded disability plan or a disability provision of a retirement plan.
◉ Distribution. Answer: When a person takes or receives money from a
retirement plan.
◉ Pension. Answer: Generally a series of definitely determinable
payments made to a taxpayer after retirement from work.
◉ Rollover. Answer: A qualified transfer of funds from one tax-favored
account to another, usually of the same type.
◉ Roth IRA. Answer: 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. Answer: An individual retirement arrangement,
contributions to which may or may not be deductible depending on the
QUESTIONS WITH CORRECT ANSWERS
GRADED A+
◉ Estimated Tax. Answer: The amount of tax a taxpayer expects to owe
for the year after subtracting expected amounts withheld and certain
refundable credits.
◉ Estimated Tax Voucher. Answer: 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. Answer: Status claimed on Form W-4
directing the employer not to withhold federal income taxes from the
employee.
◉ Underpayment Penalty. Answer: 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. Answer: Withholding and Estimated Tax
Payments
,◉ Form W-4. Answer: Employee's Withholding Allowance Certificate
◉ Form 4868. Answer: Application for Automatic Extension of Time To
File U.S. Individual Income Tax Return
◉ Amended Return. Answer: A tax return filed on Form 1040X after the
original return has been filed.
◉ Closed Year. Answer: A tax year for which the statute of limitations
has expired.
◉ Open Year. Answer: A taxable year for which the statute of limitations
has not yet expired.
◉ Failure-to-File Penalty. Answer: 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. Answer: Taxpayer fails to file the return by the due
date, and there is a balance due.
◉ Form 1040X. Answer: Amended U.S. Individual Income Tax Return
,◉ When can an amended return be filed?. Answer: 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?. Answer: No.
◉ Portfolio Income and Losses. Answer: Those from such sources as
dividends, interest, capital gains and losses, and royalties.
◉ Schedule E. Answer: Supplemental Income and Loss
◉ Royalty. Answer: 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. Answer: A series of payments under a contract made at
regular intervals over a period of more than one year.
◉ Beneficiary. Answer: The owner or recipient of funds in an account,
such as an IRA, or from an insurance policy or will.
◉ Contribution. Answer: When a person puts money into a retirement
plan.
, ◉ Defined Benefit Plan. Answer: An employee benefit plan that
provides determinable benefits not based on employer profits.
◉ Defined Contribution Plan. Answer: An employee benefit plan that
provides a separate account for each person covered and pays benefits
based on account earnings.
◉ Disability Pension. Answer: A taxable pension from an employer-
funded disability plan or a disability provision of a retirement plan.
◉ Distribution. Answer: When a person takes or receives money from a
retirement plan.
◉ Pension. Answer: Generally a series of definitely determinable
payments made to a taxpayer after retirement from work.
◉ Rollover. Answer: A qualified transfer of funds from one tax-favored
account to another, usually of the same type.
◉ Roth IRA. Answer: 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. Answer: An individual retirement arrangement,
contributions to which may or may not be deductible depending on the
