1. A taxpayer should include which of the following when figuring their federal gross income?

Life insurance payments, if paid by reason of the death of the insured.

Qualified scholarships and fellowships.

The cost of up to $50,000 of group-term life insurance provided by the employer.

Unemployment compensation.

2. To determine if a taxpayer overpaid tax or has a tax balance due, the total tax on Form 1040, page 2, line 24, may be reduced by which of the following?

Other taxes, including self-employment tax.

The Nonrefundable Child Tax Credit.

The Other Dependent Credit.

The Recovery Rebate Credit.

3. What is money that an employer takes from an employee's paycheck to be used for taxes called?

Dividend income.

Interest income.

Unearned income.

Withholding.

4. Which of the following statements is FALSE regarding tip income?

Cash tips are not taxable.

Form 4070-A, Employee's Daily Record of Tips, is used to keep a daily record of tip income.

Tips are taxable, including cash tips.

Tips can include tips that customers add to debit or credit card charges.