H&R Block Income Tax Course Exam Questions
And Answers Verified 100% Correct
Modified Adjusted Gross Income (MAGI) - ANSWER AGI plus foreign earned income
exclusion, foreign housing exclusion, foreign housing deduction, income excluded by
residents of Puerto Rico and American Samoa.
Eligible Educational Institution - ANSWER Any college, university, vocational school, or
other postsecondary educational institution eligible to participate in a student aid
program administered by the US Department of Education.
Reduction of Qualified Educational Expenses - ANSWER Qualified expenses must be
reduced by any nontaxable: scholarships; grants; veteran's or military educational
benefits; any other nontaxable benefits.
Eligible Student - ANSWER The student has not claimed an AOC in any four earlier tax
years; the student had not completed the first four years of postsecondary education
before 2011; the student was enrolled at least half-time in a program leading to a
degree for at least one academic period beginning in 2011; the student had not been
convicted of any federal or state felony for possessing or distributing a controlled
substance as of the end of 2011.
Calculating the AOC - ANSWER The amount of the AOC is the sum of: 100% of the first
$2,000 of qualified education expenses paid for the eligible student; 25% of the next
$2,000 of qualified education expenses.
Form 1098-T - ANSWER Tuition Statement
Amount of the Lifetime Learning Credit - ANSWER 20% of the total qualified expenses
for all eligible students on the tax return.
, Adoption Credit - ANSWER A nonrefundable credit for qualified adoption expenses
incurred for each eligible child. The credit cannot exceed $13,360 per child. The limit is
a per-child limit, not an annual limit, and can be carried forward for up to five years or
until used.
Child and Dependent Care Credit - ANSWER A nonrefundable tax credit of 20-35% of
employment-related child and dependent care expenses for amounts of up to $6,000,
available to individuals who are employed and have a qualifying child or disabled
spouse or dependent.
Deductions - ANSWER These lower the tax by reducing the amount of income that
would otherwise be taxable.
Requirements to Claim the Child and Dependent Care Credit - ANSWER Married
taxpayers must file a joint return; the care must have been provided so the taxpayer
could work or look for work; the taxpayer must have some earned income; the taxpayer
and the person for whom the care was provided must have lived in the same home; the
person who provided the care must not be someone the taxpayer can claim as a
dependent.
Qualified Child or Dependent Care Expenses - ANSWER Those incurred for the
primary purpose of assuring the well-being and protection of a qualifying person while
the taxpayer works or looks for work.
Computing the Child Care Credit - ANSWER A percentage of the smallest of the
following: the amount of qualified expenses incurred and paid during the year; $3,000
for one qualifying individual or $6,000 for two or more; the taxpayer's earned income for
the year.
Form 2441 - ANSWER Child and Dependent Care Expenses
Amount of Adoption Credit - ANSWER Up to $13,360 per eligible child.
Eligible Child - ANSWER For purposes of the adoption credit or exclusion must be
,under age 18 or physically or mentally incapable of self-care.
Special-Needs Child - ANSWER A child who the state has determined should not be
returned to his parents' home and who probably will not be adopted unless special
assistance is provided to the adopting family.
Nonbusiness Energy Property Credit - ANSWER Applies to improvements such as
adding insulation, energy-efficient exterior windows and doors, and energy-efficient
heating and air conditioning systems.
FICA - ANSWER The law that provides for social security and medicare benefits. This
program is financed by payroll taxes imposed equally on the employer and employee.
Schedule C - ANSWER Profit or Loss From Business
Schedule SE - ANSWER Self-Employment Tax
When are education expenses not deductible? - ANSWER If the education is required
to meet the minimum educational requirements in effect when the taxpayer first
obtained the job or if it qualifies him for a new trade or business.
Are tax preparation fees deductible? - ANSWER Yes
Hobby - ANSWER An activity not entered into for profit.
What portion of hobby expenses are deductible? - ANSWER The portion up to the
amount of income from the hobby that is reported on the tax return.
Are funeral expenses deductible? - ANSWER No
Is homeowner's or renter's insurance deductible? - ANSWER No
Are gambling losses deductible? - ANSWER Only to the extent of winnings reported as
, income.
Itemized Deductions - ANSWER Certain personal expenditures allowed as deductions
from adjusted gross income.
Schedule A - ANSWER Itemized Deductions
Sections on Schedule A - ANSWER Medical and dental expenses; taxes you paid;
interest you paid; gifts to charity; casualty and theft losses; job expenses and certain
miscellaneous deductions; other miscellaneous deductions.
What portion of medical and dental expenses is deductible? - ANSWER To the extent
they exceed 7.5% of the taxpayer's adjusted gross income.
What taxes are deductible? - ANSWER State and local taxes (income or general
sales); real property taxes (state, local, and foreign); personal property taxes (state and
local); foreign income taxes.
Total Available Income - ANSWER Adjusted gross income plus any nontaxable
income.
Real Estate Taxes - ANSWER State, local, or foreign taxes levied on real property for
the general public welfare.
Personal Property Tax - ANSWER Similar to a real estate tax, except that it is imposed
on personal property.
Health Savings Account (HSA) - ANSWER A trust or custodial account created
exclusively for the purpose of paying the qualified medical expenses of a high
deductible health plan of the account holder.
Early Withdrawal Penalty - ANSWER Deductible as an adjustment to income.
And Answers Verified 100% Correct
Modified Adjusted Gross Income (MAGI) - ANSWER AGI plus foreign earned income
exclusion, foreign housing exclusion, foreign housing deduction, income excluded by
residents of Puerto Rico and American Samoa.
Eligible Educational Institution - ANSWER Any college, university, vocational school, or
other postsecondary educational institution eligible to participate in a student aid
program administered by the US Department of Education.
Reduction of Qualified Educational Expenses - ANSWER Qualified expenses must be
reduced by any nontaxable: scholarships; grants; veteran's or military educational
benefits; any other nontaxable benefits.
Eligible Student - ANSWER The student has not claimed an AOC in any four earlier tax
years; the student had not completed the first four years of postsecondary education
before 2011; the student was enrolled at least half-time in a program leading to a
degree for at least one academic period beginning in 2011; the student had not been
convicted of any federal or state felony for possessing or distributing a controlled
substance as of the end of 2011.
Calculating the AOC - ANSWER The amount of the AOC is the sum of: 100% of the first
$2,000 of qualified education expenses paid for the eligible student; 25% of the next
$2,000 of qualified education expenses.
Form 1098-T - ANSWER Tuition Statement
Amount of the Lifetime Learning Credit - ANSWER 20% of the total qualified expenses
for all eligible students on the tax return.
, Adoption Credit - ANSWER A nonrefundable credit for qualified adoption expenses
incurred for each eligible child. The credit cannot exceed $13,360 per child. The limit is
a per-child limit, not an annual limit, and can be carried forward for up to five years or
until used.
Child and Dependent Care Credit - ANSWER A nonrefundable tax credit of 20-35% of
employment-related child and dependent care expenses for amounts of up to $6,000,
available to individuals who are employed and have a qualifying child or disabled
spouse or dependent.
Deductions - ANSWER These lower the tax by reducing the amount of income that
would otherwise be taxable.
Requirements to Claim the Child and Dependent Care Credit - ANSWER Married
taxpayers must file a joint return; the care must have been provided so the taxpayer
could work or look for work; the taxpayer must have some earned income; the taxpayer
and the person for whom the care was provided must have lived in the same home; the
person who provided the care must not be someone the taxpayer can claim as a
dependent.
Qualified Child or Dependent Care Expenses - ANSWER Those incurred for the
primary purpose of assuring the well-being and protection of a qualifying person while
the taxpayer works or looks for work.
Computing the Child Care Credit - ANSWER A percentage of the smallest of the
following: the amount of qualified expenses incurred and paid during the year; $3,000
for one qualifying individual or $6,000 for two or more; the taxpayer's earned income for
the year.
Form 2441 - ANSWER Child and Dependent Care Expenses
Amount of Adoption Credit - ANSWER Up to $13,360 per eligible child.
Eligible Child - ANSWER For purposes of the adoption credit or exclusion must be
,under age 18 or physically or mentally incapable of self-care.
Special-Needs Child - ANSWER A child who the state has determined should not be
returned to his parents' home and who probably will not be adopted unless special
assistance is provided to the adopting family.
Nonbusiness Energy Property Credit - ANSWER Applies to improvements such as
adding insulation, energy-efficient exterior windows and doors, and energy-efficient
heating and air conditioning systems.
FICA - ANSWER The law that provides for social security and medicare benefits. This
program is financed by payroll taxes imposed equally on the employer and employee.
Schedule C - ANSWER Profit or Loss From Business
Schedule SE - ANSWER Self-Employment Tax
When are education expenses not deductible? - ANSWER If the education is required
to meet the minimum educational requirements in effect when the taxpayer first
obtained the job or if it qualifies him for a new trade or business.
Are tax preparation fees deductible? - ANSWER Yes
Hobby - ANSWER An activity not entered into for profit.
What portion of hobby expenses are deductible? - ANSWER The portion up to the
amount of income from the hobby that is reported on the tax return.
Are funeral expenses deductible? - ANSWER No
Is homeowner's or renter's insurance deductible? - ANSWER No
Are gambling losses deductible? - ANSWER Only to the extent of winnings reported as
, income.
Itemized Deductions - ANSWER Certain personal expenditures allowed as deductions
from adjusted gross income.
Schedule A - ANSWER Itemized Deductions
Sections on Schedule A - ANSWER Medical and dental expenses; taxes you paid;
interest you paid; gifts to charity; casualty and theft losses; job expenses and certain
miscellaneous deductions; other miscellaneous deductions.
What portion of medical and dental expenses is deductible? - ANSWER To the extent
they exceed 7.5% of the taxpayer's adjusted gross income.
What taxes are deductible? - ANSWER State and local taxes (income or general
sales); real property taxes (state, local, and foreign); personal property taxes (state and
local); foreign income taxes.
Total Available Income - ANSWER Adjusted gross income plus any nontaxable
income.
Real Estate Taxes - ANSWER State, local, or foreign taxes levied on real property for
the general public welfare.
Personal Property Tax - ANSWER Similar to a real estate tax, except that it is imposed
on personal property.
Health Savings Account (HSA) - ANSWER A trust or custodial account created
exclusively for the purpose of paying the qualified medical expenses of a high
deductible health plan of the account holder.
Early Withdrawal Penalty - ANSWER Deductible as an adjustment to income.
