H&R Block Income Tax Course | Exam
Review with Questions and Verified
Answers | 100% Correct | A+ Verified
• The IRS (internal revenue code) oversees the execution of the _____. -
✓✓Internal revenue code
• If not an enrolled agent, CPA, or attorney, a paid tax return preparer cannot: -
✓✓-Represent a taxpayer before any of these IRS officers: appeals, revenue,
counsel, or similar officers and employees of the IRS.
-Provide tax advice other than advice necessary to prepare a return, a claim for
refund, or other document intended to be submitted to the IRS.
• What is Circular 230? -✓✓Regulations governing practices before the IRS.
Ethical standards and prohibited conduct. (READ CIRCULAR 230)
• Which form is used as the current base form for individual tax returns? -✓✓Form
1040
• Primary authority for tax issues consists of: -✓✓PRIMARY AUTHORITY:
Descending order of authority
-Internal Revenue Code
-Regulations issued by the Treasury Department.
-Judicial decisions.
SECONDARY AUTHORITY
-Commentaries
-Publications
-Tax Periodicals
-Common reference material, such as dictionaries and encyclopedias
• What is Publication 17? -✓✓The Federal Income Tax for Individual Tax Guide
• Wage -✓✓Compensation, usually financial, received by workers in exchange for
their work. Included in gross income.
, • What is Adjusted Gross Income? -✓✓Adjusted gross income equals total income
less reductions that are allowable, regardless of whether personal deductions are
itemized.
• What are deductions? -✓✓Amounts that may be subtracted from income that is
otherwise taxable.
• What is Earned Income? -✓✓Income from personal services as distinguished
from income generated by property or other sources. Earned income includes all
amounts received as wages, tips, bonuses, other employee compensation, and self-
employment income, whether in the form of money, services, or property.
• What is Federal Income Tax Withheld? -✓✓The amount taken out of income by
the payer and submitted to the IRS as an advance payment of the taxpayer's federal
income tax.
• What is Gross Income? -✓✓Total WORLDWIDE income received in the form of
money, property, or services that is subject to tax.
• What is Medicare Tax? -✓✓The tax taken out of an employee's wages, or the
same tax paid by a self-employed person on net self-employment income. The
payment of this tax contributes to the taxpayer's medicare coverage under the U.S.
social security system. The current tax rate is 1.45% of gross wages (2.9% for self-
employed individuals). An additional medicare tax may apply if the taxpayer's
wages and compensation exceed a threshold amount.
• What is a Nonrefundable Credit? -✓✓A credit which cannot exceed that
taxpayer's tax liability.
• What is Social Security Tax Withheld? -✓✓The employee's share of social
security tax that was taken out of the employee's pay and submitted along with the
employer's share to the IRS by the employer. The employee pays 6.2% and the
employer pays 6.2% on certain employee's gross wage thresholds.
• What are Social Security Wages? -✓✓Total wages paid to an employee that are
subject to this tax. This amount does not include tips. Wages are also subject to
medicare tax.
Review with Questions and Verified
Answers | 100% Correct | A+ Verified
• The IRS (internal revenue code) oversees the execution of the _____. -
✓✓Internal revenue code
• If not an enrolled agent, CPA, or attorney, a paid tax return preparer cannot: -
✓✓-Represent a taxpayer before any of these IRS officers: appeals, revenue,
counsel, or similar officers and employees of the IRS.
-Provide tax advice other than advice necessary to prepare a return, a claim for
refund, or other document intended to be submitted to the IRS.
• What is Circular 230? -✓✓Regulations governing practices before the IRS.
Ethical standards and prohibited conduct. (READ CIRCULAR 230)
• Which form is used as the current base form for individual tax returns? -✓✓Form
1040
• Primary authority for tax issues consists of: -✓✓PRIMARY AUTHORITY:
Descending order of authority
-Internal Revenue Code
-Regulations issued by the Treasury Department.
-Judicial decisions.
SECONDARY AUTHORITY
-Commentaries
-Publications
-Tax Periodicals
-Common reference material, such as dictionaries and encyclopedias
• What is Publication 17? -✓✓The Federal Income Tax for Individual Tax Guide
• Wage -✓✓Compensation, usually financial, received by workers in exchange for
their work. Included in gross income.
, • What is Adjusted Gross Income? -✓✓Adjusted gross income equals total income
less reductions that are allowable, regardless of whether personal deductions are
itemized.
• What are deductions? -✓✓Amounts that may be subtracted from income that is
otherwise taxable.
• What is Earned Income? -✓✓Income from personal services as distinguished
from income generated by property or other sources. Earned income includes all
amounts received as wages, tips, bonuses, other employee compensation, and self-
employment income, whether in the form of money, services, or property.
• What is Federal Income Tax Withheld? -✓✓The amount taken out of income by
the payer and submitted to the IRS as an advance payment of the taxpayer's federal
income tax.
• What is Gross Income? -✓✓Total WORLDWIDE income received in the form of
money, property, or services that is subject to tax.
• What is Medicare Tax? -✓✓The tax taken out of an employee's wages, or the
same tax paid by a self-employed person on net self-employment income. The
payment of this tax contributes to the taxpayer's medicare coverage under the U.S.
social security system. The current tax rate is 1.45% of gross wages (2.9% for self-
employed individuals). An additional medicare tax may apply if the taxpayer's
wages and compensation exceed a threshold amount.
• What is a Nonrefundable Credit? -✓✓A credit which cannot exceed that
taxpayer's tax liability.
• What is Social Security Tax Withheld? -✓✓The employee's share of social
security tax that was taken out of the employee's pay and submitted along with the
employer's share to the IRS by the employer. The employee pays 6.2% and the
employer pays 6.2% on certain employee's gross wage thresholds.
• What are Social Security Wages? -✓✓Total wages paid to an employee that are
subject to this tax. This amount does not include tips. Wages are also subject to
medicare tax.
