1|Page
TAX PREPARER FINAL EXAM PREP 2026
ALL QUESTIONS AND CORRECT
DETAILED ANSWERS ALREADY A GRADED
WITH EXPERT FEEDBACK |NEW AND
REVISED
What is a Tax Professional's responsibility upon finding out that a client
has not complied with any tax law? - ANSWER- A Tax Professional
must advise the client of the noncompliance and the consequences for
not correcting the situation. (26.7)
What action should a Tax Professional take if a client insists on
reporting information that is inaccurate? - ANSWER- A Tax
Professional should never prepare a return that contains inaccurate
information. (26.7)
If the employee thinks his Form W-2 is not correct, what should he do? -
ANSWER- • If the name or social security number is incorrect, the
taxpayer may change it himself and need not obtain a corrected W-2
before filing his tax return.
• The employer should be notified of the error and asked to update his
records.
• Furthermore, the employee's social security number and earnings
records should be verified with the Social Security Administration to
ensure that the earnings were properly credited. (2.17)
,2|Page
Where can the regular standard deduction amounts be found? -
ANSWER- • In the left-hand margin at the top of page 2 of Forms 1040
and 1040A.
• They are: S, MFS $5,700; MFJ, QW $11,400; HH $8,400.
• The amounts differ for taxpayers age 65 or older or blind and those
who may be claimed as dependents by other taxpayers.
[2010]
What is the exemption amount for 2009? - ANSWER- $3,650 with a
reduction for higher-income taxpayers of 2% for each $2,500 ($1,250
MFS) the AGI exceeds amounts:
$166,800 S
$250,200 MFJ QW
$125,100 MFS
$208,500 HH
(3.7,8)
Are early distributions from qualified retirement plans always
penalized? - ANSWER- No.
• Does not apply to qualified disaster recovery assistance distributions.
• Does not apply to any recovery of cost or any amount rolled over in a
timely manner.
(22.12,13)
, 3|Page
How does a Tax Professional know if a distribution exception applies? -
ANSWER- • He can determine that by using thorough interview
questions when discussing the distribution with the client.
• The distribution code on the 1099-R can also be helpful to the Tax
Professional. (22.12)
Is there a time limit for filing amended returns? - ANSWER- Yes.
Three years from the date the return was filed or within two years the tax
was paid, whichever is later. (23.3)
A taxpayer wants to amend his 2006 return. He filed it April 16, 2007.
The return was examined by the IRS on January 9, 2009 and $280
additional tax was paid that date. What is the latest date on which an
amended return may be filed? - ANSWER- January 9, 2011
Any refund will be limited to $280 (the tax paid within the two years
preceding the date the amended return was filed). (23.3)
What are the rules for changing filing status after the due date of the
return? - ANSWER- Married couples may not change their filing status
from MFJ to MFS after the due date. (23.4)
A taxpayer's employer paid $500 of a taxpayer's $2,000 child care
expenses for him. How will the employer's assistance affect the child-
care credit? - ANSWER- Total child care expenses must be reduced by
any amounts paid by the employer. (8.11)
TAX PREPARER FINAL EXAM PREP 2026
ALL QUESTIONS AND CORRECT
DETAILED ANSWERS ALREADY A GRADED
WITH EXPERT FEEDBACK |NEW AND
REVISED
What is a Tax Professional's responsibility upon finding out that a client
has not complied with any tax law? - ANSWER- A Tax Professional
must advise the client of the noncompliance and the consequences for
not correcting the situation. (26.7)
What action should a Tax Professional take if a client insists on
reporting information that is inaccurate? - ANSWER- A Tax
Professional should never prepare a return that contains inaccurate
information. (26.7)
If the employee thinks his Form W-2 is not correct, what should he do? -
ANSWER- • If the name or social security number is incorrect, the
taxpayer may change it himself and need not obtain a corrected W-2
before filing his tax return.
• The employer should be notified of the error and asked to update his
records.
• Furthermore, the employee's social security number and earnings
records should be verified with the Social Security Administration to
ensure that the earnings were properly credited. (2.17)
,2|Page
Where can the regular standard deduction amounts be found? -
ANSWER- • In the left-hand margin at the top of page 2 of Forms 1040
and 1040A.
• They are: S, MFS $5,700; MFJ, QW $11,400; HH $8,400.
• The amounts differ for taxpayers age 65 or older or blind and those
who may be claimed as dependents by other taxpayers.
[2010]
What is the exemption amount for 2009? - ANSWER- $3,650 with a
reduction for higher-income taxpayers of 2% for each $2,500 ($1,250
MFS) the AGI exceeds amounts:
$166,800 S
$250,200 MFJ QW
$125,100 MFS
$208,500 HH
(3.7,8)
Are early distributions from qualified retirement plans always
penalized? - ANSWER- No.
• Does not apply to qualified disaster recovery assistance distributions.
• Does not apply to any recovery of cost or any amount rolled over in a
timely manner.
(22.12,13)
, 3|Page
How does a Tax Professional know if a distribution exception applies? -
ANSWER- • He can determine that by using thorough interview
questions when discussing the distribution with the client.
• The distribution code on the 1099-R can also be helpful to the Tax
Professional. (22.12)
Is there a time limit for filing amended returns? - ANSWER- Yes.
Three years from the date the return was filed or within two years the tax
was paid, whichever is later. (23.3)
A taxpayer wants to amend his 2006 return. He filed it April 16, 2007.
The return was examined by the IRS on January 9, 2009 and $280
additional tax was paid that date. What is the latest date on which an
amended return may be filed? - ANSWER- January 9, 2011
Any refund will be limited to $280 (the tax paid within the two years
preceding the date the amended return was filed). (23.3)
What are the rules for changing filing status after the due date of the
return? - ANSWER- Married couples may not change their filing status
from MFJ to MFS after the due date. (23.4)
A taxpayer's employer paid $500 of a taxpayer's $2,000 child care
expenses for him. How will the employer's assistance affect the child-
care credit? - ANSWER- Total child care expenses must be reduced by
any amounts paid by the employer. (8.11)
