Question 1 of 73. Nimit was reimbursed in 2021 by his insurance company for a medical expense that he had previously deducted on his 2020 Schedule A (Form 1040), itemized Deductions. What is the tax treatment of the recovered medical expense, in any? lTlOU B an S OH O The amount recovered should be deducted on Schedule A (Form 1040), itemized Deductions, as a medical expense again in 2021. O The amount recovered should be included in income on the 2021 tax return. 0 The 2020 return must be amended to remove the medical expense that was recovered. C] Mark for follow up Question 2 of 73. Based on the information provided, which taxpayer may benefit by deducting state and local general sales taxes rather than state and local income taxes paid during the year? 0 Kim, who purchased a lot of consumer goods during the year but neglected to keep her receipts. 0 Maureen, who lives in a state with no income tax. 0 Rick, a self-employed contractor who pays a high sales tax on materials used in his business. [:1 Mark for follow up Question 4 of 73. When paid during the tax year, which of the following may be deductible on Schedule A {Form 1040), itemized Deductions? 0 Federal income tax paid for a prior-year balance due. 0 Real estate tax on assessed value. 0 State and local gasoline taxes. Question 35 of 73. Stanley would like to claim his grandson, Bobby, as his qualifying child so he can claim the Earned Income Credit (EIC). However, Bobby's mother, Talia, is also eligible to claim Bobby as her qualifying child for EIC purposes. As Stanley's tax preparer, what information would you share with Stanley? As long as Stanley files before Talia, he may claim ElC based on Bobby, his qualifying child. Stanley may claim EIC based on Bobby if his adjusted gross income was higher than Talia's. O Stanley and Talia may agree to each claim one-half of the EIC based on Bobby, their qualifying child. O Talia holds a higher right and may claim EIC based on Bobby, because Talia is Bobby's parent. Mark for follow upQuestion 38 of 73. The Child and Dependent Care Credit has been expanded for Tax Year 2021. What is the maximum amount of expenses on which the credit is based? 0 $3,000 for one qualifying individual and $5,000 for two or more qualifying individuals. , or on , . 0 $6,000 for one qualifying individual and $12,000 for two or more qualifying individuals. 0 $8,000 for one qualifying individual and $16,000 for two or more qualifying individuals. D Mark for follow up Question 39 of 73. Which of the following taxpayers may qualify for the Premium Tax Credit? (They will each use the single filing status. They are U.S. citizens. Each purchased healthcare coverage through the Healthcare Marketplace, and each received Form 1095-A, Health insurance Marketplace Statement.) 0 Alanis. Her tax liability is zero. O Caleb. His household income places him at more than 400% of the federal poverty level in his state. . onsored cover hos ' use it wou 5% of his household income. 0 Sydney. She will be claimed as a dependent on her grandmother's return. C] Mark for follow up Question 40 of 73. Which of these is TRUE regarding the Adoption Credit? 0 Employer assistance payments qualify for the credit. 0 The Adoption Credit is a refundable credit. 0 The maximum credit is $14,440 per child. Question 48 of 73. If a taxpayer claiming the American Opportunity Tax Credit has their tax liability reduced to zero, what is the maximum amount they may receive as a refundable credit? 25% of the credit, up to $2,000. 40% of the credit, up to $1,000. 100% of the first $2,000 of qualified education expenses. 100% of the first $4,000 of qualified education expenses. Mark for follow up Question 50 of 73. What is the maximum credit allowed for the lifetime learning credit? $2,000 per return. 898,500 per refiis. O $4,000 per return. $10,000 per return. Mark for follow up Question 51 of 73. Susie (29) spent $2,900 for tuition and required course fees to complete two college courses during the year. Susie cannot be claimed as a dependent on anyone else's return, and she will use the single filing status. She is not a degree candidate, nor was she a full-time student. However, the courses she took were job-related. Her 2021 modified adjusted gross income was $55,000. Given the information provided, Susie potentially qualifies for which of the following tax benefits for education? American Opportunity Tax Credit. Lifetime learning credit. O Qualified tuition program.Question 53 of 73. Which of the following expenses qualifies for an education credit in 2021? Cost of student medical fees. O Fees for an optional student activity. Tuition payments. The taxpayer didn't receive scholarships, grants, or other nontaxable benefits. wor received a nontaxable grant, which could only and covered the entire tuition expense. Mark for follow upQuestion 60 of 73. Rome {67) and Camille (69) are married and file a joint return. Their gross income {including one-half of their social security) for 2021 was $48,650. Up to what amount of their social security benefits may be taxable? O 0% O 50% 100% O 85% Question 61 of 73. What is the age requirement (if any) to contribute to a Roth IRA? The taxpayer must be at least age 18 and less than age 70. The taxpayer must be at least age 18, but there is no maximum age. The taxpayer must be at least 19 if not a full-time student, or age 24 if they are a full-time student, but there is no maximum age. There is no age requirement if the taxpayer meets the compensation requirements. Mark for follow up Question 64 of 73. Joe (55) and Gail (49) are filing jointly for 2021. Joe earned $40,000, and Gail earned $2,500. Joe may contribute up to $7,000 to his IRA for 2021. If Joe contributes $5,000 to his IRA, how much can they contribute to Gail's IRA for 2021? $2,000 $2,500 $6,000 $7,000Question 65 of 73. Lloyd, a 50-year-old single taxpayer, earned $65,000 in wages. He is covered by an employer-sponsored retirement plan. What is his maximum allowable contribution to a traditional IRA for 2021? @30- 0 $6,000 0 $7,000 0 $19,500 [:1 Mark for follow up Question 60 of 73. Elysia, a 38-year-old single taxpayer, contributed $2,000 to a traditional IRA. Her modified adjusted gross income (MAGI) is $30,000, all from wages. Elysia has never taken a distribution from any retirement account. She is potentially eligible for a Retirement Savings Contributions Credit (Saver's Credit) of up to what amount? 0 $0 0 $200 Gas: 0 $2,000 C] Mark for follow up What is the tax treatment of Canadian social security benefits in the U.S? Canadian social security benefits are: Question 69 Not taxable in the U.S. Taxed as a pension using the general rule. Taxed as a pension using the simplified method. The same as U.S. social security benefits and reported like U.S. social security benefits. Mark for follow up Question 70 of 73. Brian, a 48-year-old single taxpayer, earned $98,000 in wages. He is not covered by an employer-sponsored retirement plan. What is his maximum allowable contribution to a traditional IRA for 2021? $6,000 $7,000 $19,500 Mark for follow up Question 71 of 73. Anastasia, a 42-year-old taxpayer, earned $80,000 in wages. What is the maximum contribution she can make to her 401(k) plan in 2021? $6,000 $7,000 $19,500 $20,080- Mark for follow up Question 72 of 73. Mario is a fireman for Your City. Which of the following types of retirement plans would he contribute to through his employer? FAUTIRP 403(b). 457 O IRA. Mark for follow up Question 73 of 73. Jasmine, a 40-year-old single taxpayer, contributed $5,000 to her traditional IRA. She is an active participant in a retirement plan at work. Her IRA modified adjusted gross income is $76,500. What is her IRA adjustment to income? O $0 @ $2,500- $5,000 $7,000Question 5 of T3. Levi brings in four Forms 1098 with mortgage interest for the following properties: - First mortgage on his home: $157,350 balance with interest paid of $6,294. - Equity debt on his home: highest balance for year of $47,000 [all used for home improvements) with interest paid of $1,880. . Mortgage on his vacation home: $99,000 balance with interest of paid of $4,455. 0 Mortgage on his rental property: $142,300 balance with interest paid of $6,403. How much is he able to deduct on ScheduleA {Form 1040), itemized Deductions, for interest reported on these forms? m 0 $10,749 O $12,529 0 $19,032 [:1 Mark for follow up Question 12 of 73. Which of the following statements is CORRECT regarding the married ling separately standard deduction? Q If only one spouse itemizes, the other spouse must itemize and could have a deduction smaller than the standard deduction. O The standard deduction for married ling separately is different than the single ling status. 0 When a couple decides to file married filing separately, one may take the standard deduction and the other one may itemize. C] Mark for follow up Question 14 of 73. Zoya has a first mortgage and a smaller home equity loan. Zoya took out the home equity loan on January 3, 2021. It was not used to build, buy, or improve her home. The equity loan proceeds were used to purchase a new car and pay off credit cards. During the year, she paid $6,350 in interest on her first mortgage and $1,490 in interest on the home equity loan. What amount of mortgage interest can Zoya deduct on her Schedule A (Form 1040), Itemized Deductions? O $1,490 $4,860 $6,350 $7,840 Mark for follow up Question 15 of 73. On what forms are noncash contributions totaling more than $500 reported? For O200, Nuncaof nantable Contribute Cabodule A (Form 1040), Itemize thou Deductions. Form 8283, Noncash Charitable Contributions, and Schedule 1 (Form 1040), Additional Income and Adjustments to Income. Schedule A (Form 1040), Itemized Deductions, and Schedule 1 (Form 1040), Additional Income and Adjustments to Income. Schedule A (Form 1040), Itemized Deductions, and Form 1040, U.S. Individual Income Tax Return.Question 17 of 73. Caitlin brings in receiptslverifications for the following contributions she made in 2021: Local church, $1,000 by check. American Red Cross, $500 through payroll deductions. City councilman campaign, $300 cash. Habitat for Humanity, work valued at $250. Girl Scouts, drove 200 miles in her car for volunteer work. How much will she be able to deduct for contributions on ScheduleA (Form 1040), Itemized Deductions? (3117500- 0 $1,528 O $1,607 0 $2,078 [:1 Mark for follow up Question 21 of 73. Hailee donated a car to a qualied charitable organization. She purchased the car in 2005 for $8,000. The fair market value of the car when she donated it was $750. The charitable organization immediately sold the car for $700. What is the amount she can deduct on her tax return? 0 $500 0 $700 (#550- 0 $8,000 C] Mark for follow up Question 23 of 73. 1.1.! J1 1.1., 1.1;) A m \"um\"... Luul 4 uluAAuuA. \"u.\" 144th Which of the following taxpayers may claim a deduction for casualty and theft losses? Question 23 O Naomi, who lost the diamond from her engagement ring while cleaning her apartment. 0 Noah and Selena, whose home was damaged by termites. 0 Samuel and Lyndsey, whose value of their home declined 50% after several homes less than a mile away suffered severe ood damage. [:1 Mark for follow up Question 24 of 73. Which of these can be deducted on Schedule A (Form 1040), Itemized Deductions, line 16, as an Other Itemized Deduction? O Impairment-related work expenses of a disabled person. 0 Tax return preparation fee. 0 Unreimbursed cleaning ofa nurse's uniform. SW C] Mark for follow up Question 25 of 73. In 2021, Grace incurred $2,000 in employee business expenses. Her adjusted gross income was $40,000, and she had no other miscellaneous deductions. What amount is she able to deduct on her 2021 Schedule A (Form 1040), itemized Deductions? O $0 0 $800 0 $1,200 6w C] Mark for follow up Question 26 of 73. Which of the following statements is TRUE regarding a claim of right? If the amount a taxpayer repaid was: 0 Less than $3,000, they are able to deduct it from their income in the year they repaid it. W 0 More than $3,000, they are able to deduct the repayment as an other itemized deduction on Schedule A (Form 1040), line 16, if they included the income under a claim of right. 0 More than $3,000, they must include it in their income the year they repaid it. Question 28 of 73. Matteo drove his car 400 miles in 2021 to perform volunteer work. He did not keep records of the actual cost for gas or oil. How much can he deduct as a charitable contribution on his Schedule A (Form 1040), itemized Deductions? @159- 0 $56 0 $58 0 $224 Question 29 of 73. Which of the following taxpayers qualifies for the Earned Income Credit? Allison (28) is filing as a single taxpayer with no dependents. Allison's earned income and adjusted gross income in 2021 was $24,900, all from wages. She had no other income. She is a U.S. citizen, lived in the United States for more than six months, and has a valid social security number that allows her to work. She did not have any foreign income and will not file Form 2555, Foreign Earned Income O Anwar (20) is filing as a single taxpayer with no dependents. Anwar's earned income and adjusted gross income in 2021 was $13,333, all from wages. He had no other income. He is a U.S. citizen, lived in the United States for more than six months, and has a valid social security number that allows him to work. He did not have any foreign income and will not file Form 2555, Foreign Earned Income Rodney (38) and Serena (39) are married, filing a joint return. Rodney's income from wages was $19,781. Serena's income from wages was $31,564 Had he other income in 2021. Rodney and Serena had their first child, Caleb, in July 2021. All are U.S. citizens, lived in the United States for more than six months, and have valid social security numbers that allow them to work. They did not have any foreign income and will not file Form 2555, Foreign Earned Income. Wallace (40) is filing as a single taxpayer with no dependents. Wallace's earned income and adjusted gross income in 2021 was $22, 199, all from wages. He had no other income. Wallace is a U.S. citizen, lived in the United States for more than six months, and has a valid social security number that allows him to work. He did not have any foreign income and will not file Form 2555, Foreign Earned Income Mark for follow up Question 30 of 73. Janice (63) shared a home all year with her son, Antonio (41), and Antonio's son, Dante (23). They were all U.S. citizens, lived in the U.S. all year, and all had valid SSNs valid for employment. Janice and Antonio worked full-time. Dante was a part-time student during the year; he took one class at the local community college. He had no income. No one else lived in the home. Janice had earned income and an adjusted gross income of $23,459. She had no foreign income or investment income. Antonio had earned income and an adjusted gross income of $32,500. He had no foreign income or investment income. Who, if anyone, is eligible to claim and receive the Earned Income Credit? Both Janice and Antonio. Either Janice or Antonio but not both. Janice only. No one. OMark for follow up
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