H&R Block Income Tax Course
Assessment Exam || With
Questions & Correct Answers
Distribution Code 1 - ANSWER - Early distribution, no known exception to
penalty applies.
Distribution Code 2 - ANSWER - Early distribution, exception to penalty
applies. Distribution Code 3 - ANSWER - Disability.
Distribution Code 4 - ANSWER - Death.
Distribution Code 7 - ANSWER - Normal distribution.
Distribution Code A - ANSWER - May qualify for ten-year averaging and/or
capital gain election.
Distribution Code G - ANSWER - Direct rollover to a qualified retirement plan,
tax- sheltered annuity, 457(b) plan, or IRA, or from a conduit IRA to a
qualified plan.
Distribution Code J - ANSWER - Early distribution from a Roth IRA, no known
exception to penalty applies.
Distribution Code Q - ANSWER - Qualified distribution from a Roth IRA.
Distribution Code T - ANSWER - Roth IRA distribution due to death or
disability or taxpayer has reached age 59 1/2, but the payer does not know if
the five-year holding period was met.
Exceptions to the Early Withdrawal Penalty - ANSWER - 01 - The distribution
was made to an employee who separated from service during or after the
year in which they reached age 55.
02 - The distribution is part of a series of substantially equal periodic
payments, made at least annually for the life of the participant or the life
expenctancy of the participant.
03 - The distribution was made due to permanent and total
disability. 04 - The distribution was made due to the death of
the employee.
05 - The distribution was made in a year that the taxpayer's medical
expenses exceeds 7.5% of AGI.
06 - The distribution was made to an alternate payee under a
qualified domestic relations order.
07 - The distribution was made in a year an unemployed taxpayer paid
health insurance premiums.
, 08 - The distribution was made to pay qualified higher education
expenses for the taxpayer, spouse, their child, or their grandchild.
09 - The distribution was made to pay qualified first-time, home-buying
expenses.
10 - The distribution was made due to an IRS levy of the qualified plan.
11 - The distribution was made to a reservist while serving on active duty for
at least 180 days.
12 - Other.
Form 5329 - ANSWER - Additional Taxes on Qualified Plans and Other Tax-
Favored Accounts
401(k) Plan - ANSWER - Deferred compensation plan available through a
wide range of employers. Contributions to a 401(k) plan are tax deferred to
the employee.
Distributions from the plan are taxed as ordinary income to the recipient
when received.
403(b) Plan - ANSWER - Deferred compensation plan available to employees
of many public educational institutions and non-profit organizations.
457 Plan - ANSWER - Deferred compensation plan available to employees of
many government entities.
Roth IRA - ANSWER - A type of individual arrangement in which contributions
are not tax deductible, earnings grow tax deferred, and qualified
withdrawals are tax free.
Circular 230 - ANSWER - Regulations governing the practice of attorneys,
certified public accountants, enrolled agents, enrolled actuaries, and
appraisers before the IRS.
Disclosure - ANSWER - The release of tax information by an IRS employee.
Due Diligence - ANSWER - Requirements that tax professionals must follow
when preparing income tax returns.
Noncompliance - ANSWER - Failure or refusal to comply with the tax code.
Privilege - ANSWER - Protection from being required to disclose confidential
communications between two parties, such as attorney and client.
Estimated Tax - ANSWER - The amount of tax a taxpayer expects to owe for
the year after subtracting expected amounts withheld and certain refundable
credits.
Estimated Tax Voucher - ANSWER - A statement by an individual of (1) the
amount of income tax he estimates he will incur during the current taxable
year on income that is not subject to withholding, (2) the excess amount
over that withheld on income which is subject to withholding, and (3) his
,estimated self-employment tax.
, Exemption from Withholding - ANSWER - Status claimed on Form W-4
directing the employer not to withhold federal income taxes from the
employee.
Underpayment Penalty - ANSWER - If a taxpayer did not pay enough tax on a
timely basis during the year, he may be required to pay an underpayment
penalty.
Withholding Allowances - ANSWER - An increase by which income tax
withholding on certain income is reduced.
Two Ways to Pay as You Go - ANSWER - Withholding and Estimated Tax
Payments Form W-4 - ANSWER - Employee's Withholding Allowance
Certificate
Form 8815 - ANSWER - Exclusion of Interest From Series EE and I U.S.
Savings Bonds Issued After 1989
Form 2210 - ANSWER - Underpayment of Estimated Tax by Individuals,
Estates, and Trusts
Form 4868 - ANSWER - Application for Automatic Extension of Time To File
U.S. Individual Income Tax Return
Form 8888 - ANSWER - Allocation of Refund
Form 9465 - ANSWER - Installment Agreement Request
Amended Return - ANSWER - A tax return filed on Form 1040X after the
original return has been filed.
Closed Year - ANSWER - A tax year for which the statute of limitations has
expired.
Open Year - ANSWER - A taxable year for which the statute of limitations has
not yet expired.
Failure-to-File Penalty - ANSWER - Generally 5% for each month or part of a
month the return is late, but not more than 25% of the tax not paid.
Failure to File - ANSWER - Taxpayer fails to file the return by the due date,
and there is a balance due.
Failure to Pay - ANSWER - Taxpayer fails to pay the tax owed by the due
date.
Failure-to-Pay Penalty - ANSWER - 0.5% of the unpaid taxes for each month
or part of a month after the due date, but not more than 25%.
Assessment Exam || With
Questions & Correct Answers
Distribution Code 1 - ANSWER - Early distribution, no known exception to
penalty applies.
Distribution Code 2 - ANSWER - Early distribution, exception to penalty
applies. Distribution Code 3 - ANSWER - Disability.
Distribution Code 4 - ANSWER - Death.
Distribution Code 7 - ANSWER - Normal distribution.
Distribution Code A - ANSWER - May qualify for ten-year averaging and/or
capital gain election.
Distribution Code G - ANSWER - Direct rollover to a qualified retirement plan,
tax- sheltered annuity, 457(b) plan, or IRA, or from a conduit IRA to a
qualified plan.
Distribution Code J - ANSWER - Early distribution from a Roth IRA, no known
exception to penalty applies.
Distribution Code Q - ANSWER - Qualified distribution from a Roth IRA.
Distribution Code T - ANSWER - Roth IRA distribution due to death or
disability or taxpayer has reached age 59 1/2, but the payer does not know if
the five-year holding period was met.
Exceptions to the Early Withdrawal Penalty - ANSWER - 01 - The distribution
was made to an employee who separated from service during or after the
year in which they reached age 55.
02 - The distribution is part of a series of substantially equal periodic
payments, made at least annually for the life of the participant or the life
expenctancy of the participant.
03 - The distribution was made due to permanent and total
disability. 04 - The distribution was made due to the death of
the employee.
05 - The distribution was made in a year that the taxpayer's medical
expenses exceeds 7.5% of AGI.
06 - The distribution was made to an alternate payee under a
qualified domestic relations order.
07 - The distribution was made in a year an unemployed taxpayer paid
health insurance premiums.
, 08 - The distribution was made to pay qualified higher education
expenses for the taxpayer, spouse, their child, or their grandchild.
09 - The distribution was made to pay qualified first-time, home-buying
expenses.
10 - The distribution was made due to an IRS levy of the qualified plan.
11 - The distribution was made to a reservist while serving on active duty for
at least 180 days.
12 - Other.
Form 5329 - ANSWER - Additional Taxes on Qualified Plans and Other Tax-
Favored Accounts
401(k) Plan - ANSWER - Deferred compensation plan available through a
wide range of employers. Contributions to a 401(k) plan are tax deferred to
the employee.
Distributions from the plan are taxed as ordinary income to the recipient
when received.
403(b) Plan - ANSWER - Deferred compensation plan available to employees
of many public educational institutions and non-profit organizations.
457 Plan - ANSWER - Deferred compensation plan available to employees of
many government entities.
Roth IRA - ANSWER - A type of individual arrangement in which contributions
are not tax deductible, earnings grow tax deferred, and qualified
withdrawals are tax free.
Circular 230 - ANSWER - Regulations governing the practice of attorneys,
certified public accountants, enrolled agents, enrolled actuaries, and
appraisers before the IRS.
Disclosure - ANSWER - The release of tax information by an IRS employee.
Due Diligence - ANSWER - Requirements that tax professionals must follow
when preparing income tax returns.
Noncompliance - ANSWER - Failure or refusal to comply with the tax code.
Privilege - ANSWER - Protection from being required to disclose confidential
communications between two parties, such as attorney and client.
Estimated Tax - ANSWER - The amount of tax a taxpayer expects to owe for
the year after subtracting expected amounts withheld and certain refundable
credits.
Estimated Tax Voucher - ANSWER - A statement by an individual of (1) the
amount of income tax he estimates he will incur during the current taxable
year on income that is not subject to withholding, (2) the excess amount
over that withheld on income which is subject to withholding, and (3) his
,estimated self-employment tax.
, Exemption from Withholding - ANSWER - Status claimed on Form W-4
directing the employer not to withhold federal income taxes from the
employee.
Underpayment Penalty - ANSWER - If a taxpayer did not pay enough tax on a
timely basis during the year, he may be required to pay an underpayment
penalty.
Withholding Allowances - ANSWER - An increase by which income tax
withholding on certain income is reduced.
Two Ways to Pay as You Go - ANSWER - Withholding and Estimated Tax
Payments Form W-4 - ANSWER - Employee's Withholding Allowance
Certificate
Form 8815 - ANSWER - Exclusion of Interest From Series EE and I U.S.
Savings Bonds Issued After 1989
Form 2210 - ANSWER - Underpayment of Estimated Tax by Individuals,
Estates, and Trusts
Form 4868 - ANSWER - Application for Automatic Extension of Time To File
U.S. Individual Income Tax Return
Form 8888 - ANSWER - Allocation of Refund
Form 9465 - ANSWER - Installment Agreement Request
Amended Return - ANSWER - A tax return filed on Form 1040X after the
original return has been filed.
Closed Year - ANSWER - A tax year for which the statute of limitations has
expired.
Open Year - ANSWER - A taxable year for which the statute of limitations has
not yet expired.
Failure-to-File Penalty - ANSWER - Generally 5% for each month or part of a
month the return is late, but not more than 25% of the tax not paid.
Failure to File - ANSWER - Taxpayer fails to file the return by the due date,
and there is a balance due.
Failure to Pay - ANSWER - Taxpayer fails to pay the tax owed by the due
date.
Failure-to-Pay Penalty - ANSWER - 0.5% of the unpaid taxes for each month
or part of a month after the due date, but not more than 25%.
