Taxes

Casualty losses are still allowed but only for what losses?

Losses declared a disaster by the President

Taxpayers will find under TCJA:

Lower tax rate but higher taxable income amount

Manuel's sick-pay from his employer is considered wages. Which of the following would not be included in Manuel's wages?

Manuel paid the premiums on the health insurance policy

Which of the following nonrefundable credits can be claimed on Form 1040-EZ?

Nonrefundable credits cannot be taken on Form 1040-EZ

Which of the following is not a single federal filing status requirement?

Spouse died during the tax year, taxpayer did not remarry before the end of the current tax year

Maritza is receiving a refund and designated $3 to the Presidential Election Campaign Fund. How will the $3 affect her refund?

The designated $3 will not affect either the refund or amount owed on her tax return.

Paulina is a dependent and a full-time student. Up to what age will Paulina qualify her parents to claim EITC?

Under age 24

Refundable child tax credit will be

$1,400 per qualifying child

What is the AGI?

$25,550

What is the alternative minimum tax (AMT) itemized deduction phaseout amount for married filing jointly?

$313,800 Comments: The alternative minimum tax (AMT) is an additional tax. The taxpayer may be subject to AMT based on his or her income. The 2017 exemption phaseout amount for married filing separately is $54,700 for single and head of household, $70,300 for married filing jointly, or $109,400 for qualifying widow(er). The exemption amount is reported on Form 6251, line 5. The 2017 itemized deduction limit for married filing separately is $156,900, $261,500 for single, $287,650 for head of household, and $313,800 for married filing jointly. See Instructions Form 6251 and Publication 17.

What percentage is used to calculate the net income amount of a self-employed taxpayer?

$400 Comments: The SE tax applies to everyone who has net earnings from self-employment of $400 or more. See Publication 334.

What is the maximum amount of daycare expenses that can be claimed on Form 2441?

$6,000

Estate and Gift tax exemption has been increased to:

10,000,000

What is the amount on Schedule 8812 (Child Tax Credit), line 13?

1000

What is the amount on form 1040, line 43?

1000

Schedule A "Taxes You Paid" has a new cap of:

10000

What is the federal standard deduction for a taxpayer who is filing head of household for tax year 2018?

18,000

How many total exemptions are there?

2

Sec. 199A allows taxpayers a deduction of what percent of qualified business income (QBI)?

20

Heather reported her tips to her employer on Form 4070 for January through November. She forgot to report her tips for December. What amount must Heather report to her employer?

20.00

Heather reported her tips to her employer on Form 4070 for January through November. She forgot to report her tips for December. What amount must Heather report to her employer?

20.00 or more per month

Amber and Livingston are married and file a joint return. They both work and live in the United States. Amber's income is $75,369 and Livingston's income is $77,123. Which federal 2017 form will they use to report their income?

2017 Form 1040

Anet received alimony from her ex-husband Ricardo. Where would Anet report the alimony received for tax year 2017?

2017 Form 1040, line 11

Which of the following nonrefundable credits is reported on 2017 Form 1040-EZ?

2017 Form 1040-EZ does not report nonrefundable credits

Standard deduction for MFJ nearly doubles to:

24000

Robert prepared and signed 900 returns during the 2018 return period. He willfully neglected to retain a copy of the tax returns he prepared. Robert also willfully refused to maintain a complete client list. What is the maximum penalty that IRS can impose on Robert for failure to retain a copy or list of all the returns he prepared?

26,000

How many tax brackets are there under TCJA?

37 percent

What is the total number of exemptions being claimed?

4

The new phaseout amount for Child tax credit for MFJ is:

400,000

How many different federal filing statuses are there?

5

What is the amount on form 1040, line 42a?

5,616

Ruby was assigned an IP PIN from the IRS for identity protection. She is not sure if she brought the correct number to Rita to prepare her current year tax return. Ruby's IP number consists of how many digits?

6

What is the amout on form 8863, line 8?

640

What is the amount of taxable income to pay 37% tax (MFJ)?

7

What is the amount for Total Payments on form 1040, line 46?

7,366

Medical expenses are still deductible, subject to what percent cap in 2018?

7.5

Imelda worked for 321 Tax Service for 18 years. 321 Tax Service has a qualified plan. When she retired Imelda received an Employee Achievement Award of $2,500. How much of her award will be reported as taxable income?

900

Hamilton has filed fraudulent tax returns resulting in underpayment of tax due. Hamilton has been charged with civil fraud. What additional penalty could Hamilton pay for the fraudulent underpayment?

Additional penalty of 75% of the underpayment Comments: If any part of an underpayment is due to fraud, the penalty imposed is 75% of the underpayment (the "civil fraud" penalty). Once the IRS establishes that any portion of an underpayment is due to fraud, the entire underpayment is assumed to be attributable to fraud unless the taxpayer proves otherwise. The 20% accuracy-related penalty does not apply to any portion of an underpayment on which the fraud penalty is imposed. However, the accuracy-related penalty may be applied to any portion of the underpayment not attributable to fraud. If IRS examiners find strong evidence of fraud, they will refer the case to the Criminal Investigation Division (CID) for prosecution. Both civil sanctions and criminal prosecution can be imposed.

Under the ACA the Individual Shared Responsibility Payment is reduced to zero, effective

After December 31, 2018

GTI6 2017 Form 1040-A allows the taxpayer to adjust their income with certain adjustments. Which of the following adjustments to income are not deducted on 2017 Form 1040-A?

Alimony paid

Which of the following is not used to complete the Form W-7 or W-7SP application process?

Applicant's full name Travel itinerary to and from the United States Applicant's mailing address

Which of the following should the taxpayer do when they do not have a social security number (SSN)?

Apply for an SSN (if they qualify) or an ITIN.

Generally, which of the following is the correct due date to file an individual federal tax return?

April 15th

The Sec. 199A deduction benefits "pass-thru entities" that includes all the following except

C Corporations

Jeff's filing status is married filing separate. Which of the following does not apply to Jeff?

Can claim the EITC (earned income tax credit)

Which of the following cannot be used to pay a federal balance due?

Cash

Mrs. Whitworth has 3 foster children living with her. Which of the following children would not be considered a qualifying child for purposes of earned income tax credit (EITC)?

Child waiting to be adopted lived with Mrs. Whitworth for only 2 months

Genaro has several family members living with him and wants to claim all of them for the child tax credit. Which relationship would not qualify Genaro to claim the child tax credit?

Cousin

Which of the following dates determines the taxpayer's marital status?

December 31st or the last day of the fiscal year for the taxpayer

Deborah is a new client to Gloria. Deborah owns a cleaning business and has a part-time W-2 job. Total gross wages reported on her W-2 were $8,500. Her cleaning business earned $7,000 with no expenses. Deborah has 3 children under the age of 17. Which of the following questions does Gloria not have to ask Deborah

Does Deborah have a business license? Does Deborah have a business checking account? Does Deborah want Gloria to do her bookkeeping

Which of the following credits are reported on 2017 Form 1040-EZ?

Earned Income Credit (EIC)

Which of the following is not a test to be a qualifying child?

Education

The total monthly premiums for one or more qualified health plans that any tax family member enrolled in.

Enrollment premiums

Hunter and Amanda have 6 qualifying dependents and file a joint return. They are not sure which form to use. Which of the following is the best scenario for Hunter and Amanda?

For tax year 2017, Hunter and Amanda would file using Form 1040 or Form 1040-A and attach an additional paper with the dependent information needed

Nestor receives more than $20 a month in tips. He reports his monthly tips to his employer. What form does Nestor use to track his own tips?

Form 4070A

Zane is subject to alternative minimum tax (AMT). Which form will she use to calculate her alternative minimum tax (AMT)?

Form 6251 Comments: Form 6251, Alternative Minimum Tax-Individuals, is used to calculate whether a taxpayer will be subject to AMT. Form 4868 is Application for Automatic Extension of Time to File US Individual Income Tax Return. Form 8863 is Education Credits, and Form 8801 is Credit for Prior Year Minimum Tax Individual, Estates, and Trusts. See Publication 17.

John received wages from his employer. Which of the following would John receive to report his income?

Form W-2

Which of the following is reported on Form 1040, line 7?

Form W-4

Which of the following federal gambling winnings is subject to income tax withholding?

Gambling winnings more than $5,000

Rose was completing a tax return with refundable credits for Peter. Peter is a roofing contractor and files Schedule C. Rose was asking Peter for his income and expenses. Peter told Rose he did not have any records. Which of the following should Rose do?

Help Peter reconstruct his record keeping, creating an accurate tax return

Which of the following scenarios best describes who does not have to file a tax return but should to receive a refund?

Henry age 16 had a part time job and received $968 in wages and $75 in federal withholding

What is the filing status?

HoH

Which of the following de minimis benefits does not need to be included in the employee wages?

Holiday ham

Which of the following government agency issues the ITIN?

IRS

Kyle is a qualifying child for his mother Ramona and father Quentin. Quentin and Ramona are legally separated, and both want to claim Kyle for the tax benefits. Ramona and Quentin have a separation agreement that they have joint custody. Kyle lives with both parents equally. Ramona earned $19,365.23 and Quentin earned $36,986.21. Who will be able to claim Kyle?

If the child is the qualifying child of more than one person, only one person can claim the child as a qualifying child. Under the tie-breaker rule, the child is treated as a qualifying child only by the parents if they file a joint return: the parent, if only one of the persons is the child's parent; the parent with whom the child lived the longest during the tax year, if two of the persons are the child's parent and they do not file a joint return together. The parent with the highest AGI if the child lived with each parent for the same amount of time during the tax year, and they do not file a joint return together; the person with the highest AGI if no parent can claim the child as a qualifying child; or a person with the higher AGI than any parent who can also claim the child as a qualifying child but does not. Therefore, Quentin will claim Kyle as his dependent.

Raul started a business in 2017. Which of the following is not self-employment income for Raul?

Income from Schedule D Comments: Self-employment income consists of income from self-employed business activities that are reported on Schedule C, Schedule F, Clergy and Employees of Churches and Religious Organizations. Income from Schedule D is a capital gain. See Schedule C Instructions.

Faustino received income from the following sources. Which of the following is generally not compensation income?

Inherited property

Joseph is a tax preparer with limited representation rights. All of the following statements are correct EXCEPT

Joseph can represent his client before an IRS Customer Service Representative if he prepared and signed his client's tax return. Joseph can represent his client before a revenue agent if he prepared and signed his client's tax return. Joseph can represent his client before the IRS Taxpayer Advocate (TAS) if he prepared and signed his client's tax return.

On the 2017 Form 1040 where is income reported?

Lines 7-21

Which of the following is not a federal filing status?

Married filing single

Martha prepared Abel's 2017 tax return. Abel decided not to have Martha prepare his 2018 tax return. Abel asked for his tax records to be returned to him. Which of the following scenarios is correct for Abel to request his records from Martha?

Martha must promptly return the records, even if there is a dispute over fees.

Which of the following is not used to calculate the dependent's total personal support?

Money the taxpayer gave to the dependent

Edward has a foster child, Pedro, who was placed through an authorized placement agency. Edward cares for Pedro like his own. How long does Pedro need to live with Edward to qualify for EITC?

More than six months

Which of the following income could be used to calculate EITC?

Nontaxable combat pay Comments: Earned Income includes all of the following types of income: wages, salaries, tips, and other taxable employee pay. Employee pay is earned income only if it is taxable. Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. Interest and dividends, alimony, and pensions and annuities are not considered earned income for the purposes of EITC. A taxpayer can each elect to have their nontaxable combat pay be included in earned income for the EITC. See Publication 596.

The new Family tax credit of $500 is for:

Qualifying dependent 17 and over

Which of the following is not a federal filing status?

Registered Domestic Partner

It means that for any month during the year that taxpayer, spouse or dependents don't have minimum essential coverage and don't qualify for a coverage exemption, the taxpayer will have to make a payment.

Shared Policy Allocation

Omar interviewed Fernando to prepare his tax return. Fernando told Omar his name was Fernando Cruz. On Fernando's social security card, the name appears as Fernando Dela-Cruz. Which of the following government agencies does the tax return need to match?

Social Security Administration (SSA)

Diego received the following sources of income. Which of the following is not a kind of unemployment compensation?

Social security benefits

Which of the following is not a qualifying test to determine a qualifying child for EITC?

Support

Which of the following sections comes before "Other Taxes" on 2017 Form 1040?

Tax and Credits Section

Whose name appears under "Third party designee"?

Tax preparer

Which of the following is generally not responsible to file the final tax return for a decedent taxpayer?

Taxpayer

Which of the following individual does not need an ITIN to file a tax return?

Taxpayer who has an SSN

Omar can be claimed as a dependent on his parent's tax return. What would his standard deduction amount be? (This information is for 2017, TCJA update soon)

The greater of $1,050 or the taxpayer's earned income for the year plus $350 not to exceed the standard deduction.

Josue is a tax preparer and just completed Jose's tax return. Before Jose pays, he changes his mind and asks for his documents back. What must Josue do to comply with federal tax obligations?

The practitioner must, at the request of the client, promptly return the records of the client to the client unless applicable state law provides otherwise

Lisa is preparing Hugo's current year tax return. Lisa asked Hugo for his business income and expenses to prepare a Schedule C. Hugo tells Lisa he cannot find any records. Lisa may need to help Hugo reconstruct his records. Reconstruction will demonstrate that Lisa completed her due diligence as well as teach Hugo the importance of proper record keeping. Which of the following does not demonstrate due diligence in record reconstruction?

The tax preparer completed Hugo's tax return even though she was not satisfied with the accuracy of the reconstructed records

There are specific guidelines that determine who should be considered a self-employed taxpayer. Which of the following taxpayers would not be considered a self-employed taxpayer?

The taxpayer is an independent contractor. The taxpayer received wages from his employer.

Miscellaneous deductions on Schedule A are subject to what percent cap in 2018?

There are no miscellaneous deductions allowed in 2018

Vicente has a balance due on his tax return. Which of the following scenario describes how Vicente should handle his balance due?

Vicente should file his return electronically and pay electronically or mail his check or money order with the payment voucher to the IRS by the due date. Comments: Even though Vicente has a balance due on his tax return, the tax return can be filed electronically. Vicente needs to mail the voucher with the amount due or pay the amount electronically.

Which of the following is not a common error found when processing an application for an ITIN?

W-2s match the name on the application

Which of the following income is reported on 2017 Form 1040, line 21?

Which of the following income is reported on 2017 Form 1040, line 21?

What is the amount of taxable income on form 1040A, line 27?

0

What is the federal standard deduction for a taxpayer who files married filing separate for tax year 2018?

12,000

What is the amount on form 1040A, line 24?

9,350

Which of the following does not determine if the child is permanently and totally disabled?

A doctor determines the condition will last for less than a year

Which of the following does not allow the parent to claim their child as a dependent?

A stillborn child

Jose owns Jose's Taqueria and needs to know how to allocate tips for his servers. Which of the following best describes how Jose should calculate allocated tips?

Add the employee's reported tips on food and drink sales, minus 10% service charge

Julie is covered by an employer group-term life insurance. What portion of the group-term life insurance is taxable to Julie?

Anything over $50,000

Which of the following is not reported as other income on 2017 Form 1040, line 21?

Child support

find answers

Circular 230

Which of the following form reports the prior year state refund amount?

Form 1099-G

Which of the following would allow Gunther to file as head of household?

Gunther's mother did not live with the taxpayer, but Gunther paid 100% of his mother's living expense

Larry is filing head of household and will be claiming his children on his tax return. Which scenario best describes when Larry will be able to claim EITC?

Larry's child lived with him the entire year

Schedule A deduction limitations have been suspended under TCJA

true