1. Jacob and Jennifer wish to file a return and claim EITC on their kids. Combined, they make $12,000 in wages. They receive $1,800 a year in food stamps, $10,000 in subsidized housing allowances, and Jacob receives VA benefits of $18,000 a year. They're worried that they will make too much to qualify for EITC. Should they be?

a. Yes, receipt of unearned income over $3,600 disqualifies the taxpayers from EITC and they exceed that with their public assistance.

b. No, except for the wages all of the other forms of "income" are nontaxable and nonreportable.

c. Yes, the combined total of all forms of income receipt are over the maximum AGI for receiving EITC.

d. They might need to worry, but there isn't sufficient information to answer that question.

2. Non-dividend distributions are only included in income in what scenario?

a. When a taxpayer works in securities trades.

b. Only if tax-exempt income is made non-exempt.

c. When the return of capital exceeds the initial investment (i.e., when the money paid into the financial account is paid back to the investor past his contribution).

d. Never.

3. State tax refunds are always reported as taxable income in the year received:

a. Correct: State tax refunds are always taxed as ordinary salary and wages, subject to FICA taxation

b. Correct: State tax refunds are always taxed as ordinary income

c. Incorrect: The amount of a refund for a prior year is for informational purposes for non-tax accounting

d. Partially correct: State tax refunds can be considered wholly, partially, or non-includible in income based on factors of their personal prior year return

4. Farming income is reported on what schedule through the filing of a return?

a. Schedule C

b. Schedule F

c. Schedule D

d. Schedule E

5. If you purchase a car for personal use, and then sell it later for a profit, what type of income did you receive?

a. Wage income

b. Dividend income

c. Capital gain income

d. Self-employment income

Thank you!