H & R Block Midterm Review Questions and Answers

H & R Block Midterm Review Questions and Answers Some types of income do not need to be reported anywhere on a federal tax return. This includes all of the following EXCEPT: A.) Most medical insurance proceeds B.) Worker's compensation paid to an employee who was injured on the job. C.) Welfare benefits D.) Unemployment compensation - Ans:-D.) Unemployment compensation Which of the following is considered earned income? A.) Interest from a bank account. B.) Unemployment compensation C.) Income from farming D.) Gambling Winnings - Ans:-C.) Income from farming ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 2/27 Which of the following shows these numbers rounded correctly: $31.43, $143.57, $369.22, $1,547.88? A.) $32. $142. $368. $1,547 B.) $31. $144. $369. $1,548 C.) $31. $142. $369. $1,547. D.) $32. $144. $368. $1,547 - Ans:-B.) $31. $144. $369. $1,548 The tax on income that comes entirely from wages under $100,000 is determined according to the? A.) Tax tables B.) Tax computation worksheet C.) Qualified dividends and capital gains worksheet D.) schedule D tax worksheet - Ans:-A.) Tax tables Which form is used by employers to report wages earned by their employees? A.) Form W-2 B.) Form W-4 C.) Form 1098-T ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 3/27 D.) Form 1099-R - Ans:-A.) Form W-2 Nathan Bayer is a single taxpayer. His 2018 taxable income was $57,474. What is Nathan's 2018 federal income tax? A.) $5,749 B.) $6898 C.) $8584 D.) $12,644 - Ans:-C.) $8584 Which of the following three factors determine the filing requirement for nondependents? A.) Marital status, age, and residency. B.) Marital status, age, and gross income C.) Marital status, age, and taxable income D.) Marital status, age, and total deductions. - Ans:-B.) Marital status, age, and gross income The standard deduction on an income tax return is determined by: A.) Citizenship B.) Residency ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 4/27 C.) Filing Status D.) Gross Income - Ans:-C.) Filing Status The head of household filing status requires that a taxpayer maintain a household for? A.) A qualifying child, qualifying relative, or a parent claimed as a dependent on the taxpayer's return B.) At least one other person C.) A beloved family pet D.) Maintaining a household for another person is not a requirement of the head of household filing status. - Ans:-A.) A qualifying child, qualifying relative, or a parent claimed as a dependent on the taxpayer's return For tax purposes, when is a person's marital status determined? A.) On the first day of the tax year B.) On the taxpayer's birthday C.) On the day the person files their tax return D.) On the last day of the tax year. - Ans:-D.) On the last day of the tax year. ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 5/27 Under what circumstances might a taxpayer, who does not meet the federal filing requirement, want to file a federal return anyway? A.) They are entitled to one or more refundable credits B.) They are entitled to one or more nonrefundable credits C.) To claim the itemized deductions D.) If there was any state tax withheld. - Ans:-A.) They are entitled to one or more refundable credits Which of the following is not one of the four requirements to claim a dependent? A.) The dependent must be a qualifying child or qualifying relative B.) The dependent must be a U.S. citizen or a resident of the United States, Canada, or Mexico. C.) IF the dependent is married, they cannot be claimed as a dependent if they file a joint return with their spouse (unless they are only filing to claim a refund of withholding). D.) The taxpayer must provide 100% of the dependent's support for the whole year. - Ans:-D.) The taxpayer must provide 100% of the dependent's support for the whole year. What are the five tests for a qualifying child? A.) Relationship, citizenship, age, support, and joint return ©GRACEAMELIA 2024/2025 ACADEMIC YEAR. ALL RIGHTS RESERVED FIRST PUBLISH OCTOBER 2024 Page 6/27 B.) Relationship, residency, age, support, and joint return C.) Marital status, residency, age, support, and joint return. D.) Relationship, residency, age, support, and type of income. - Ans:-B.) Relationship, residency, age, support, and joint return What are the four tests for a qualifying relative? A.) Relationship or member of the household, gross income, support, and residency. B.) Relationship or member of the household, gross income, citizenship, and not a qualifying child C.) Relationship or member of the household, gross income, support, and not a qualifying child D.) Relationship or member of the household, gross income, support, and be a qualifying child. - Ans:-C.) Relationship or member of the household, gross income, support, and n