H&R BLOCK INCOME TAX SPECIALIST EXAM | ACCURATE REAL EXAM
CURRENTLY TESTING QUESTIONS AND ANSWERS WITH GUARANTEED
PASS | LATEST UPDATE
Question 1
Sam pays his 19-year-old son, Joshua, $550 per month to maintain the lawn and garden at the
family residence. What are Sam's obligations regarding household employment taxes for Joshua?
A) Since Joshua is not performing child care services, the household tax rules do not apply.
B) Since Joshua is the taxpayer's child and is under age 21, Sam is not subject to FICA taxes for
him.
C) Since no evidence is given that Joshua is a student, he is considered Sam's household
employee.
D) Since Joshua's wages are over the annual threshold, Sam is subject to all household
employment tax rules for Joshua.
Correct Answer: B) Since Joshua is the taxpayer's child and is under age 21, Sam is not
subject to FICA taxes for him.
Rationale: There is a specific exemption for household employment taxes. Wages paid by a
parent to their child who is under the age of 21 are not subject to Social Security and
Medicare (FICA) taxes. The nature of the work or the son's student status is irrelevant to
this specific exemption.
Question 2
When calculating federal gross income, which of the following items must a taxpayer include?
A) A prior-year federal income tax refund.
B) Ordinary dividends received from a stock investment.
C) Compensation received for a personal physical injury.
D) Qualified disaster relief payments.
Correct Answer: B) Ordinary dividends received from a stock investment.
Rationale: Gross income includes all income from whatever source derived, unless
specifically excluded by law. Ordinary dividends are a form of investment income and are
fully taxable. Federal tax refunds are generally not taxable. Compensation for physical
,[Type here]
injuries and qualified disaster payments are specific statutory exclusions from gross
income.
Question 3
A taxpayer is required to file Schedule 1 (Form 1040), "Additional Income and Adjustments to
Income," when claiming which of the following?
A) The Retirement Savings Contributions Credit.
B) The Health Savings Account (HSA) deduction.
C) The American Opportunity Education Credit.
D) The excess advance premium tax credit repayment.
Correct Answer: B) The Health Savings Account (HSA) deduction.
Rationale: Schedule 1 is used to report certain types of income and, importantly, to claim
"above-the-line" adjustments to income. The HSA deduction is one of these specific
adjustments. The other items are credits or repayments that are calculated and reported on
other forms or schedules.
Question 4
For the 2018 tax year, what is the excise tax rate for excess contributions made to a Health
Savings Account (HSA)?
A) 0%
B) 6%
C) 10%
D) 20%
Correct Answer: B) 6%
Rationale: If a taxpayer contributes more to their HSA than the annual limit, the excess
contribution is not deductible and is subject to a 6% excise tax for each year it remains in
the account.
Question 5
For the 2018 tax year, if a taxpayer takes a distribution from their Health Savings Account (HSA)
for a non-qualified medical expense, the distribution is subject to income tax plus an additional
excise tax of:
,[Type here]
A) 0%
B) 6%
C) 10%
D) 20%
Correct Answer: D) 20%
Rationale: Distributions from an HSA are tax-free only if used for qualified medical
expenses. If the funds are withdrawn for any other purpose, the amount is included in gross
income and is also subject to a 20% additional tax penalty (unless the account holder is
over age 65 or disabled).
Question 6
Cynthia, a full-time teacher's aide, paid $250 for a professional development course to upgrade
her job skills. She was not reimbursed. Can she claim the educator expense deduction?
A) No, because she is a teacher's aide, not an eligible educator.
B) No, because professional development is not a qualified expense.
C) Yes, because a teacher's aide is an eligible educator and professional development is a
qualified expense.
D) No, because all employee business expenses have been eliminated.
Correct Answer: C) Yes, because a teacher's aide is an eligible educator and the
professional development course is a qualified expense.
Rationale: An "eligible educator" includes teachers, instructors, counselors, principals, or
aides working in a school for at least 900 hours. A teacher's aide fits this definition.
Qualified expenses include not only classroom supplies but also professional development
courses related to the curriculum or the students. Therefore, Cynthia is eligible to claim the
$250 deduction.
Question 7
Major Winters, a member of the Army Reserve, had $195 in unreimbursed lodging and $268 in
mileage for a trip 250 miles away for his reserve duties. How much is he eligible to deduct as an
above-the-line adjustment?
A) $0
B) $268
, [Type here]
C) $463
D) $698
Correct Answer: C) $463
Rationale: A member of the Armed Forces reserves can deduct their unreimbursed travel
expenses for performing reserve duties more than 100 miles from home. This includes
lodging, meals (subject to limits), and mileage. Both the $195 for lodging and the $268 for
mileage for the long-distance trip are deductible. The local mileage is not. Therefore, the
total deduction is $195 + $268 = $463.
Question 8
Kimberly originally filed her 2017 tax return on February 19, 2018. Under ordinary
circumstances, what is the last day she can file an amended return (Form 1040-X) for the 2017
tax year?
A) April 15, 2021
B) February 19, 2021
C) April 15, 2020
D) April 17, 2018
Correct Answer: A) April 15, 2021
Rationale: The statute of limitations for filing an amended return to claim a refund is
generally the later of three years from the date the original return was filed or two years
from the date the tax was paid. Since she filed early, her return is considered filed on the
due date, April 17, 2018. Three years from that due date is April 17, 2021 (or April 15th in a
normal year).
Question 9
All of the following issues can be corrected or changed by filing Form 1040-X, Amended U.S.
Individual Income Tax Return, EXCEPT:
A) The amount of deductible medical expenses was reported incorrectly.
B) An error was made on a trust return (Form 1041).
C) Wages from a second job were not initially reported.
D) A taxpayer who filed as a non-resident now qualifies for U.S. resident status.
CURRENTLY TESTING QUESTIONS AND ANSWERS WITH GUARANTEED
PASS | LATEST UPDATE
Question 1
Sam pays his 19-year-old son, Joshua, $550 per month to maintain the lawn and garden at the
family residence. What are Sam's obligations regarding household employment taxes for Joshua?
A) Since Joshua is not performing child care services, the household tax rules do not apply.
B) Since Joshua is the taxpayer's child and is under age 21, Sam is not subject to FICA taxes for
him.
C) Since no evidence is given that Joshua is a student, he is considered Sam's household
employee.
D) Since Joshua's wages are over the annual threshold, Sam is subject to all household
employment tax rules for Joshua.
Correct Answer: B) Since Joshua is the taxpayer's child and is under age 21, Sam is not
subject to FICA taxes for him.
Rationale: There is a specific exemption for household employment taxes. Wages paid by a
parent to their child who is under the age of 21 are not subject to Social Security and
Medicare (FICA) taxes. The nature of the work or the son's student status is irrelevant to
this specific exemption.
Question 2
When calculating federal gross income, which of the following items must a taxpayer include?
A) A prior-year federal income tax refund.
B) Ordinary dividends received from a stock investment.
C) Compensation received for a personal physical injury.
D) Qualified disaster relief payments.
Correct Answer: B) Ordinary dividends received from a stock investment.
Rationale: Gross income includes all income from whatever source derived, unless
specifically excluded by law. Ordinary dividends are a form of investment income and are
fully taxable. Federal tax refunds are generally not taxable. Compensation for physical
,[Type here]
injuries and qualified disaster payments are specific statutory exclusions from gross
income.
Question 3
A taxpayer is required to file Schedule 1 (Form 1040), "Additional Income and Adjustments to
Income," when claiming which of the following?
A) The Retirement Savings Contributions Credit.
B) The Health Savings Account (HSA) deduction.
C) The American Opportunity Education Credit.
D) The excess advance premium tax credit repayment.
Correct Answer: B) The Health Savings Account (HSA) deduction.
Rationale: Schedule 1 is used to report certain types of income and, importantly, to claim
"above-the-line" adjustments to income. The HSA deduction is one of these specific
adjustments. The other items are credits or repayments that are calculated and reported on
other forms or schedules.
Question 4
For the 2018 tax year, what is the excise tax rate for excess contributions made to a Health
Savings Account (HSA)?
A) 0%
B) 6%
C) 10%
D) 20%
Correct Answer: B) 6%
Rationale: If a taxpayer contributes more to their HSA than the annual limit, the excess
contribution is not deductible and is subject to a 6% excise tax for each year it remains in
the account.
Question 5
For the 2018 tax year, if a taxpayer takes a distribution from their Health Savings Account (HSA)
for a non-qualified medical expense, the distribution is subject to income tax plus an additional
excise tax of:
,[Type here]
A) 0%
B) 6%
C) 10%
D) 20%
Correct Answer: D) 20%
Rationale: Distributions from an HSA are tax-free only if used for qualified medical
expenses. If the funds are withdrawn for any other purpose, the amount is included in gross
income and is also subject to a 20% additional tax penalty (unless the account holder is
over age 65 or disabled).
Question 6
Cynthia, a full-time teacher's aide, paid $250 for a professional development course to upgrade
her job skills. She was not reimbursed. Can she claim the educator expense deduction?
A) No, because she is a teacher's aide, not an eligible educator.
B) No, because professional development is not a qualified expense.
C) Yes, because a teacher's aide is an eligible educator and professional development is a
qualified expense.
D) No, because all employee business expenses have been eliminated.
Correct Answer: C) Yes, because a teacher's aide is an eligible educator and the
professional development course is a qualified expense.
Rationale: An "eligible educator" includes teachers, instructors, counselors, principals, or
aides working in a school for at least 900 hours. A teacher's aide fits this definition.
Qualified expenses include not only classroom supplies but also professional development
courses related to the curriculum or the students. Therefore, Cynthia is eligible to claim the
$250 deduction.
Question 7
Major Winters, a member of the Army Reserve, had $195 in unreimbursed lodging and $268 in
mileage for a trip 250 miles away for his reserve duties. How much is he eligible to deduct as an
above-the-line adjustment?
A) $0
B) $268
, [Type here]
C) $463
D) $698
Correct Answer: C) $463
Rationale: A member of the Armed Forces reserves can deduct their unreimbursed travel
expenses for performing reserve duties more than 100 miles from home. This includes
lodging, meals (subject to limits), and mileage. Both the $195 for lodging and the $268 for
mileage for the long-distance trip are deductible. The local mileage is not. Therefore, the
total deduction is $195 + $268 = $463.
Question 8
Kimberly originally filed her 2017 tax return on February 19, 2018. Under ordinary
circumstances, what is the last day she can file an amended return (Form 1040-X) for the 2017
tax year?
A) April 15, 2021
B) February 19, 2021
C) April 15, 2020
D) April 17, 2018
Correct Answer: A) April 15, 2021
Rationale: The statute of limitations for filing an amended return to claim a refund is
generally the later of three years from the date the original return was filed or two years
from the date the tax was paid. Since she filed early, her return is considered filed on the
due date, April 17, 2018. Three years from that due date is April 17, 2021 (or April 15th in a
normal year).
Question 9
All of the following issues can be corrected or changed by filing Form 1040-X, Amended U.S.
Individual Income Tax Return, EXCEPT:
A) The amount of deductible medical expenses was reported incorrectly.
B) An error was made on a trust return (Form 1041).
C) Wages from a second job were not initially reported.
D) A taxpayer who filed as a non-resident now qualifies for U.S. resident status.
