60 of 81. A taxpayer should include which of the following when figuring their federal gross income? O Commissions. Federal income tax refunds. Gifts and inheritances. Alimony after 12/31/18. Mark for follow up Question 61 of 81. Under 2021 tax law, a child no longer qualifies a taxpayer for the Child Tax Credit in the year the child reaches: Age 17. Age 18. Age 19. Age 19, or age 24 if the child is a full-time student. Mark for follow up Question 62 of 81. A paid tax preparer must demonstrate due diligence. Review the following scenario, and then choose the appropriate response. Rosie Morales (58) comes in to your office have her tax return prepared. She states that she wants to use the head of household filing status and claim the Earned Income Credit (EIC). She also tells you that her dependent child is her granddaughter, Angela (12), who currently lives with her. All of the following are appropriate questions to ask Rosie with the EXCEPTION of: How long has Angela has lived with you? Where do Angela's parents live? Are all of Angela's belongings in your house? Can anyone else claim Angela as a dependent? Mark for follow up Question 63 of 81. Choose the response that correctly describes the penalty, penalties, that may be assessed against paid tax preparers who fail to comply with due diligence requirements when preparing returns for taxpayers using the head of household filing status and/or claiming the Earned Income Credit, the Child Tax Credit/Other Dependent Credit/Additional Child Tax Credit, or the American Opportunity Tax Credit. For 2021 returns prepared in 2022, the IRS can assess a maximum penalty of: O Zero, although preparers may face civil penalties and an injunction barring them from preparing returns in the future. $545 per failure or a total of $2,180 per return for failure to provide due diligence for the four credits. $540 per return that incorrectly uses the head of household filing status and claims at least one of the credits. Zero, although a penalty of $2,180 per return may be assessed against the preparer's employer. Mark for follow up Question 64 of 81. Choose the response that correctly describes the tax treatment of municipal bond interest. Interest from this type of investment is: Not federally taxable and does not need to be reported on Form 1040. Federally taxable and must be reported on Form 1040. Not federally taxable, but must be reported on Form 1040, regardless of the amount. Not federally taxable and only reportable on Form 1040 when the amount received exceeds $1,500. Mark for follow up Question 65 of 81. Antonio Sanchez had taxable income of $35,950 in 2021. He will file a return using the single filing status. In 2021, he opened an interest bearing savings account and received Form 1099-INT showing he had earned $12.00 interest for the year. He must report the following amount of interest on his Form 1040. so O $10 O $12 O $24 Mark for follow up