Download 2024 H&R Block Tax Course Exam - Withholding, Estimated Payments, Taxable Income and more Exams Nursing in PDF only on Docsity!
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Regulations governing the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries, and appraisers before the IRS. - Correct Answer ✅Circular 230 The release of tax information by an IRS employee. - Correct Answer ✅Disclosure Requirements that tax professionals must follow when preparing income tax returns. - Correct Answer ✅Due Diligence Failure or refusal to comply with the tax code. - Correct Answer ✅Noncompliance Protection from being required to disclose confidential communications between two parties, such as attorney and client. - Correct Answer ✅Privilege
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The amount of tax a taxpayer expects to owe for the year after subtracting expected amounts withheld and certain refundable credits. - Correct Answer ✅Estimated Tax 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. - Correct Answer ✅Estimated Tax Voucher Status claimed on Form W-4 directing the employer not to withhold federal income taxes from the employee. - Correct Answer ✅Exemption from Withholding If a taxpayer did not pay enough tax on a timely basis during the year, he may be required to pay an underpayment penalty. - Correct Answer ✅Underpayment Penalty
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Installment Agreement Request - Correct Answer ✅Form 9465 A tax return filed on Form 1040X after the original return has been filed. - Correct Answer ✅Amended Return A tax year for which the statute of limitations has expired. - Correct Answer ✅Closed Year A taxable year for which the statute of limitations has not yet expired. - Correct Answer ✅Open Year Generally 5% for each month or part of a month the return is late, but not more than 25% of the tax not paid. - Correct Answer ✅Failure-to-File Penalty Taxpayer fails to file the return by the due date, and there is a balance due. - Correct Answer ✅Failure to File
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Taxpayer fails to pay the tax owed by the due date. - Correct Answer ✅Failure to Pay 0.5% of the unpaid taxes for each month or part of a month after the due date, but not more than 25%. - Correct Answer ✅Failure-to-Pay Penalty Taxpayer shows negligence or disregard of the rules or regulations causing an underpayment. - Correct Answer ✅Negligence or Intentional Disregard 20% of the underpayment. - Correct Answer ✅Negligence- or-Intentional-Disregard Penalty Taxpayer understates their tax by the larger of $5,000 or 10% of the correct tax. - Correct Answer ✅Substantial Understatment 20% of the underpayment. - Correct Answer ✅Substantial- Understatement Penalty
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Those from business activities in which the taxpayer does not materially participate, and all rental activities. - Correct Answer ✅Passive Income and Losses Those from such sources as dividends, interest, capital gains and losses, and royalties. - Correct Answer ✅Portfolio Income and Losses Income received by the taxpayer for allowing another person's use of the taxpayer's property. - Correct Answer ✅Rental Income (1) A payment received for the right to exploit a taxpayer's ownership of natural resources or a taxpayer's literary, musical, or artistic creation. (2) An interest in the oil and gas in place that entitles the holder to a specified fraction, in kind or in value, of the total production from the property, free of any expenses of development and operation. - Correct Answer ✅Royalty
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A qualified small business corporation that has elected special tax treatment under subchapter S of the Internal Revenue Code. S corporations pass income, losses, and deductions through to shareholders to report on their individual returns. - Correct Answer ✅S Corporation A tax entity that distributes all or part of its income to beneficiaries as instructed by the trust agreement. - Correct Answer ✅Trust
- More than half of the personal services performed by the taxpayer in all trades or businesses during the tax year were performed in real property trades or businesses in which the taxpayer materially participated.
- The taxpayer performed more than 750 hours of services during the year in real property trades or businesses in which the taxpayer materially participated. - Correct Answer ✅Requirements for a Real Estate Professional Any activity that: Involves the conduct of a trade or business; is conducted in anticipation of starting a trade or business;
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Income received for the use of property. - Correct Answer ✅Rent Unearned. - Correct Answer ✅Is rent earned or unearned income? Supplemental Income and Loss - Correct Answer ✅Schedule E Those that do not appreciably add to the value or useful life of the property. - Correct Answer ✅Deductible Maintenance and Repairs No. - Correct Answer ✅Is the value of the owner's labor deductible when it comes to rental property? Basis MINUS land value TIMES the rental use percentage. - Correct Answer ✅Rental Property Depreciable Basis
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A dwelling unit and may be a house, apartment, condominium, mobile home, boat, or any other property that provides normal living accomodations. - Correct Answer ✅Vacation home A dwelling unit is used for personal purposes during the year for whichever is greater: more than 14 days; more than 10% of the days the house is rented at fair rental value. - Correct Answer ✅Used as a Residence Payments received for the right to extract natural resources from the taxpayer's property or to use a taxpayer's literary, musical, or artistic creation. - Correct Answer ✅Royalty One acquired by investment, the return on which is dependent upon the extraction of the natural deposit or cutting of the timber. - Correct Answer ✅Economic Interest Cost and Percentage - Correct Answer ✅Two Methods of Computing Depletion
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A business activity in which the taxpayer does not materially participate. - Correct Answer ✅Passive Activity Passive Activity Loss Limitations - Correct Answer ✅Form 8582 A series of payments under a contract made at regular intervals over a period of more than one year. - Correct Answer ✅Annuity The owner or recipient of funds in an account, such as an IRA, or from an insurance policy or will. - Correct Answer ✅Beneficiary When a person puts money into a retirement plan. - Correct Answer ✅Contribution An employee benefit plan that provides determinable benefits not based on employer profits. - Correct Answer ✅Defined Benefit Plan
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An employee benefit plan that provides a separate account for each person covered and pays benefits based on account earnings. - Correct Answer ✅Defined Contribution Plan A taxable pension from an employer-funded disability plan or a disability provision of a retirement plan. - Correct Answer ✅Disability Pension When a person takes or receives money from a retirement plan. - Correct Answer ✅Distribution Generally a series of definitely determinable payments made to a taxpayer after retirement from work. - Correct Answer ✅Pension A qualified transfer of funds from one tax-favored account to another, usually of the same type. - Correct Answer ✅Rollover
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Railroad Retirement Benefits - Correct Answer ✅Form RRB- 1099 Single, Head of Household, Qualified Widow - $0-$25,000; Married Filing Jointly - $0-$32,000 - Correct Answer ✅None of Social Security Benefits Taxable Single, Head of Household, Qualified Widow - $25,001- $34,000; Married Filing Jointly - $32,001-$44,000 - Correct Answer ✅Up to 50% of Social Security Benefits Taxable Single, Head of Household, Qualified Widow - $34,001+; Married Filing Jointly - $44,001+; Married Filing Single - $1+ - Correct Answer ✅Up to 85% of Social Security Benefits Taxable Pensions to which the taxpayer did not make after-tax contributions or from which all pre-tax amounts have been recovered in previous years. - Correct Answer ✅Fully Taxable Pension
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Those pensions funded through employer plans to which the employee contributed some after-tax money. - Correct Answer ✅Partly Taxable Pensions Distributions from Pensions, Annuities, Retirement, or Profit- Sharing Plans, IRAs, Insurance Contracts, Etc. - Correct Answer ✅Form 1099-R Early distribution, no known exception to penalty applies. - Correct Answer ✅Distribution Code 1 Early distribution, exception to penalty applies. - Correct Answer ✅Distribution Code 2 Disability. - Correct Answer ✅Distribution Code 3 Death. - Correct Answer ✅Distribution Code 4 Normal distribution. - Correct Answer ✅Distribution Code 7
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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 - Correct Answer ✅Exceptions to the Early Withdrawal Penalty
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Additional Taxes on Qualified Plans and Other Tax-Favored Accounts - Correct Answer ✅Form 5329 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. - Correct Answer ✅401(k) Plan Deferred compensation plan available to employees of many public educational institutions and non-profit organizations. - Correct Answer ✅403(b) Plan Deferred compensation plan available to employees of many government entities. - Correct Answer ✅457 Plan A type of individual arrangement in which contributions are not tax deductible, earnings grow tax deferred, and qualified withdrawals are tax free. - Correct Answer ✅Roth IRA
