1. Generally, under the Tax Cuts and Jobs Act, which of the following major items cannot be subtracted from gross income? A. Contributions to a traditional individual retirement arrangement (IRA) B. Moving expenses C. Qualified educator expenses D. Student loan interest

2. For 2021, all of the following statements are true regarding the higher additional standard deduction under the Tax Cuts and Jobs Act except: A. The additional standard deduction for married taxpayers 65 or over or blind is $1,350 B. The additional standard deduction for a single taxpayer or head of household who is 65 or over or blind is $1,700 C. The taxpayer can claim the higher standard deduction for a dependent D. A person is considered to reach age 65 on the day before his or her 65th birthday

3. Kevin and Jennifer are married and filing a joint tax return. They have a combined taxable income of $80,000. They have four children, whom they claim as dependents. When they file their 2021 income tax return, Kevin and Jennifers taxable income will be reduced by what amount for their personal exemption deduction? A. $0 B. $12,900 C. $17,200 D. $21,500

4. If the taxpayer obtains a court decree of annulment, which holds that no valid marriage ever existed, he or she is considered unmarried even if he or she filed joint returns for earlier years. The taxpayer must file amended returns (Form 1040X) claiming which of the following filing status for all tax years that are affected by the annulment and not closed by the statute of limitations for filing a tax return? A. Single B. Head of Household C. Married Filing Separately D. A or B

5. Oscar is divorced. His dependent son, Sam, lived with him all year. Property taxes of $1,000 and mortgage interest of $5,000 on the home where he and Sam live are divided equally with his ex-wife. Oscar also paid all the utilities of $150 per month. What amount of the yearly household expenses can Oscar use to determine if he qualifies for the head of household filing status? A. $2,500 B. $3,500 C. $4,800 D. $6,000

6. Which of the following is not an advantage of filing a joint income tax return? A. Joint filers can claim double the amount of the personal exemption deduction B. The IRS gives joint filers one of the largest standard deductions each year, allowing them to deduct a significant amount of their income immediately C. Married couples who file together qualify for multiple tax credits such as the Earned Income Tax Credit and the Child and Dependent Care Credit D. Joint filers receive higher income thresholds for certain taxes and deductions which means they can earn a larger amount of income and still qualify for certain tax breaks

7. Bill and Karen Green filed a joint return showing Karen's wages of $50,000 and Bill's self-employment income of $10,000. The IRS audited their return and found that Bill did not report $20,000 of self-employment income. The additional income resulted in a $6,000 understated tax, plus interest and penalties. After obtaining a legal separation from Bill, Karen filed Form 8857 - Request for Innocent Spouse Relief to request separation of liability relief. The IRS proved that Karen actually knew about the $20,000 of additional income at the time she signed the joint return. Bill is liable for all of the understated tax, interest, and penalties because all of it was due to his unreported income. Which of the following is true regarding Karens liability for the understated tax, interest and penalties due for the unreported income of $20,000? A. Karen is not liable for the understated tax, interest, and penalties due to the $20,000 of unreported income B. The IRS cannot collect the entire $6,000 plus interest and penalties from Karen because she is not individually liable for it C. The IRS can collect the entire $6,000 plus interest and penalties from either Karen or Bill because they are jointly and individually liable for it D. Even though Karen knew that Bill received the income, relief is available for that income because she did not know it was taxable

8. Captain Margaret Jones entered Afghanistan on December 1, 2019. She remained there through March 31, 2021, when she departed for the United States. She was not injured and did not return to the combat zone. What is the deadline for Captain Jones 2021 income tax return that she files in 2022? A. January 10, 2022 B. April 15, 2022 C. June 15, 2022 D. October 15, 2022

9. Some dividends may not be qualified dividends even if they are shown in Box 1b of Form 1099-DIV. Which of the following is a qualified dividend? A. Dividends paid on deposits with mutual savings banks, cooperative banks, credit unions, U.S. building and loan associations, U.S. savings and loan associations, Federal savings and loan associations, and similar financial institutions B. Dividends from a corporation that is a tax-exempt organization or farmer's cooperative during the corporation's tax year in which the dividends were paid or during the corporation's previous tax year C. Dividends paid from a stock held for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date D. Dividends paid by a corporation on employer securities held on the date of record by an employee stock ownership plan (ESOP) maintained by that corporation

10. Bruce owns XYZ Co. common stock, which he bought in 2018. He was paid a dividend of $500 for the current year. These qualified dividends are generally taxed at what tax rate? A. Individual tax rate B. Long-term capital gains tax rate C. Short-term capital gains tax rate D. Corporate tax rate

11. A cafeteria plan provides participants an opportunity to receive qualified benefits on a pre-tax basis. It is a written plan that allows employees to choose between receiving cash or taxable benefits, instead of certain qualified benefits for which the law provides an exclusion from wages. A cafeteria plan can include all of the following benefits except: A. Dependent care assistance B. Educational assistance C. Group-term life insurance coverage D. Health savings accounts (HSA)

12. A taxpayer goes to a casino and wins $10,000. The casino withholds $500 for Federal income taxes. What is the proper tax treatment by the taxpayer? A. The taxpayer must report the winnings on Schedule 1 (Form 1040) and can claim the amount of Federal income tax withheld on page 2 of Form 1040 B. The taxpayer does not have to report the winnings because the taxpayer did not receive a Form 1099-G from the casino C. The taxpayer is not required to report the winnings on his or her Schedule 1 (Form 1040) unless the taxpayer wants to claim the withheld amount on page 2 of Form 1040 D. The taxpayer must report the winnings on his or her Schedule 1 (Form 1040), but the taxpayer may not claim the amount of Federal income tax withheld unless the taxpayer itemizes deductions

13. Jean Knox received certain income benefits in 2021. She received $1,400 of state unemployment insurance benefits, $2,000 from a Federal Unemployment Trust Fund and $3,700 workers compensation received for an occupational injury. What amount of the payments must Jean include in her income? A. $1,400 B. $2,000 C. $3,400 D. $3,700

14. A 62-year-old, married taxpayer files a Married Filing Separately tax return, and lives apart from her spouse for an entire taxable year. What is the taxpayers base amount for computing taxable Social Security benefits? A. $0 B. $25,000 C. $32,000 D. $34,000