HR BLOCK FINAL TEST (INCOME TAX
2025) ACTUAL EXAM WITH QUESTIONS
AND CORRECT DETAILED ANSWERS
WITH RATIONALES ALREADY GRADED
A+
SECTION 1 — FILING BASICS & DEPENDENTS
1. Which filing status generally provides the lowest tax liability for a
taxpayer who qualifies for more than one?
A. Single
B. Head of Household
C. Married Filing Separately
D. Qualifying Surviving Spouse
Correct Answer: B
Rationale: HOH offers higher standard deduction and more
favorable tax brackets than Single or MFS. QSS is better only if the
taxpayer qualifies, but fewer taxpayers do.
2. A child meets all tests for dependency. The parents are divorced.
Which parent can claim the child?
,A. Parent with higher AGI
B. Custodial parent
C. Noncustodial parent always
D. Parent who pays the most support
Correct Answer: B
Rationale: The custodial parent claims the child unless they sign
Form 8332 transferring the credit.
3. The qualifying child age test for the Child Tax Credit is:
A. Under 17 at end of tax year
B. Under 19 at end of tax year
C. Under 24 if full-time student
D. Any age if disabled
Correct Answer: A
Rationale: The CTC age cutoff is younger than 17 on December 31.
SECTION 2 — INCOME
4. Which of the following is taxable income?
A. Child support
B. Workers’ comp for job injury
C. Alimony received (post-2019 divorce)
D. Jury duty pay
Correct Answer: D
Rationale: Jury duty is taxable. Child support and workers’ comp
aren't taxable; post-2019 alimony received is also not taxable.
,5. A taxpayer receives a 1099-K from selling personal items online
for less than they cost. What is the tax effect?
A. Fully taxable
B. Not taxable; report zero gain
C. Must report the full 1099-K amount as income
D. Taxpayer needs to file Schedule C
Correct Answer: B
Rationale: Selling personal items for a loss is not taxable; but if a
1099-K reports it, the sale should be reported to show zero taxable
gain.
6. Which of the following is considered earned income?
A. Traditional IRA distributions
B. Social Security benefits
C. W-2 wages
D. Unemployment compensation
Correct Answer: C
SECTION 3 — ADJUSTMENTS & CREDITS
7. Student loan interest is deductible up to:
A. $1,500
B. $2,000
C. $2,500
D. $3,000
, Correct Answer: C
Rationale: Maximum annual deduction is $2,500, subject to income
phaseouts.
8. Which credit is refundable?
A. Lifetime Learning Credit
B. American Opportunity Credit (partially)
C. Adoption Credit
D. Child and Dependent Care Credit
Correct Answer: B
Rationale: Up to 40% of AOTC (max $1,000) is refundable.
9. A taxpayer with one dependent child and earned income of
$15,000 may be eligible for which credit?
A. Earned Income Credit
B. Saver’s Credit only
C. Child and Dependent Care Credit only
D. No credits
Correct Answer: A
Rationale: EIC applies with low to moderate earned income and at
least one qualifying child.
SECTION 4 — STANDARD & ITEMIZED DEDUCTIONS
10. Which of the following can be itemized?
2025) ACTUAL EXAM WITH QUESTIONS
AND CORRECT DETAILED ANSWERS
WITH RATIONALES ALREADY GRADED
A+
SECTION 1 — FILING BASICS & DEPENDENTS
1. Which filing status generally provides the lowest tax liability for a
taxpayer who qualifies for more than one?
A. Single
B. Head of Household
C. Married Filing Separately
D. Qualifying Surviving Spouse
Correct Answer: B
Rationale: HOH offers higher standard deduction and more
favorable tax brackets than Single or MFS. QSS is better only if the
taxpayer qualifies, but fewer taxpayers do.
2. A child meets all tests for dependency. The parents are divorced.
Which parent can claim the child?
,A. Parent with higher AGI
B. Custodial parent
C. Noncustodial parent always
D. Parent who pays the most support
Correct Answer: B
Rationale: The custodial parent claims the child unless they sign
Form 8332 transferring the credit.
3. The qualifying child age test for the Child Tax Credit is:
A. Under 17 at end of tax year
B. Under 19 at end of tax year
C. Under 24 if full-time student
D. Any age if disabled
Correct Answer: A
Rationale: The CTC age cutoff is younger than 17 on December 31.
SECTION 2 — INCOME
4. Which of the following is taxable income?
A. Child support
B. Workers’ comp for job injury
C. Alimony received (post-2019 divorce)
D. Jury duty pay
Correct Answer: D
Rationale: Jury duty is taxable. Child support and workers’ comp
aren't taxable; post-2019 alimony received is also not taxable.
,5. A taxpayer receives a 1099-K from selling personal items online
for less than they cost. What is the tax effect?
A. Fully taxable
B. Not taxable; report zero gain
C. Must report the full 1099-K amount as income
D. Taxpayer needs to file Schedule C
Correct Answer: B
Rationale: Selling personal items for a loss is not taxable; but if a
1099-K reports it, the sale should be reported to show zero taxable
gain.
6. Which of the following is considered earned income?
A. Traditional IRA distributions
B. Social Security benefits
C. W-2 wages
D. Unemployment compensation
Correct Answer: C
SECTION 3 — ADJUSTMENTS & CREDITS
7. Student loan interest is deductible up to:
A. $1,500
B. $2,000
C. $2,500
D. $3,000
, Correct Answer: C
Rationale: Maximum annual deduction is $2,500, subject to income
phaseouts.
8. Which credit is refundable?
A. Lifetime Learning Credit
B. American Opportunity Credit (partially)
C. Adoption Credit
D. Child and Dependent Care Credit
Correct Answer: B
Rationale: Up to 40% of AOTC (max $1,000) is refundable.
9. A taxpayer with one dependent child and earned income of
$15,000 may be eligible for which credit?
A. Earned Income Credit
B. Saver’s Credit only
C. Child and Dependent Care Credit only
D. No credits
Correct Answer: A
Rationale: EIC applies with low to moderate earned income and at
least one qualifying child.
SECTION 4 — STANDARD & ITEMIZED DEDUCTIONS
10. Which of the following can be itemized?
