Basic Course Test Questions Flashcards
Basic Scenario 1: Adam Baker
Interview Notes:
- Adam is 38 years old and has never been married.
- Benjamin, age 15, iss Adam’s brother, who lived with him all year. Adam provided all of Benjamin’ support and provided over half the cost of keeping up the home.
- Adam earned $46,000 in wages.
- Adam is blind and cannot be claimed as a dependent by another taxpayer.
- Adam and Benjamin are U.S. citizens, have valid Social Security numbers, and lived in the U.S. the entire year.
Test Question 1. What is the most advantageous filing status allowable that Adam can claim on his tax return for 2023?
a. Single
b. Head of Household
c. Qualifying Surviving Spouse
d. Married Filing Jointly
Test Question 2. Adam can claim a higher standard deduction because he is blind.
a. True
b. False
Basic Scenario 2: Cameron and Deirdre Edmunds
Interview Notes
* Cameron, age 30, and Deirdre, age 29, are married and will file a joint return.
* They cannot be claimed as dependents by any other taxpayer.
* Cameron and Deirdre have no children or other dependents.
* Cameron and Deirdre both work and are not full-time students. Cameron earned wages of $16,000 and
Deirdre earned wages of $6,000.
* Cameron and Deirdre are U.S. citizens and have valid Social Security numbers.
* Cameron and Deirdre have investment income of $200 in taxable interest.
Test Questions
3. Cameron and Deirdre are eligible to claim the Earned Income Tax Credit (EITC).
a. True
b. False
- Cameron and Deidre’s $200 of interest counts as earned income for the Earned Income Tax Credit.
a. True
b. False
Basic Scenario 3: Eric and Fiona Fisher
Interview Notes
* Eric and Fiona Fisher are married and always file Married Filing Jointly.
* Eric earned $32,000 in wages and Fiona earned $24,000 in wages.
* The Fishers paid all the cost of keeping up a home and provided all the support for their two children,
Grace and Ian, who lived with them all year.
* Grace is 14 years old and Ian turned 17 in November 2023.
* Eric, Fiona, Grace, and Ian are all U.S. citizens with valid Social Security numbers and lived in the U.S. the
entire year.
Test Questions
5. Which of the Fisher’s children qualifies for the Child Tax Credit (CTC)?
a. Grace
b. Ian
c. Grace and Ian
d. Neither
6. The Additional Child Tax Credit is limited to $________ per child. (Note: whole number only, do not use
special characters.)
Basic Scenario 4: Jack and Diane Gibson
Interview Notes
* Jack and Diane are married and will file a joint return.
* Diane is a U.S. citizen with a valid Social Security number. Jack is a resident alien with an Individual Taxpayer Identification Number (ITIN).
* Diane worked in 2023 and earned wages of $32,000. Jack worked part-time and earned wages of $18,000.
* The Gibsons have two children: Keith, age 12 and Hanna, age 18.
* The Gibsons provided the total support for their two children, who lived with them in the U.S. all year. Keith
and Hanna are U.S. citizens and have valid Social Security numbers.
Test Questions
7. The Gibsons qualify for the Credit for Other Dependents.
a. True
b. False
- The Gibsons qualify for the Earned Income Tax Credit even though Jack has an ITIN.
a. True
b. False
Basic Scenario 5: Jasmine Harris
Interview Notes
* Jasmine is single and turned 72 years old on October 1, 2023.
* Jasmine worked as a public historian at the local library and earned wages of $32,000. Jasmine also
received Social Security benefits of $16,500. She received a taxable pension of $14,000.
* She retired from her previous job on October 30, 2020. During her career she contributed pretax dollars to
a qualified 401(k) retirement plan through her employer.
* Jasmine cannot be claimed as a dependent by another taxpayer.
* Jasmine is a U.S. citizen with a valid Social Security number.
Test Questions
9. Jasmine does not qualify to claim the Earned Income Tax Credit because:
a. She does not meet the age requirement
b. She exceeds the earned income requirement
c. She does not have a qualifying child
d. Both a and b
- Jasmine must take her first required minimum distribution by April 1, 2025.
a. True
b. False
Basic Scenario 6: Lucas Turner
Interview Notes
* Lucas Turner is single and has never been married.
* Lucas earned wages of $25,000 during the first half of the year. Lucas lost his job in July and received a
total of $11,000 in unemployment compensation.
* Lucas is a welder and took a class at a local vocational school to improve his welding skills. He paid the cost of tuition and a course-related book. His qualified education expenses were $3,500.
* Lucas also paid student loan interest for the courses he previously took to earn his Bachelor’s degree. For 2023, he paid student loan interest of $750.
* Lucas does not have any dependents.
* Lucas is a U.S. citizen with a valid Social Security number.
Basic Scenario 6: Test Questions
11. Lucas must include his unemployment compensation on his 2023 tax return.
a. True
b. False
- Lucas is eligible for the following credit:
a. Earned Income Credit
b. Lifetime Learning Credit
c. American Opportunity Credit
d. None of the above - Lucas can claim the student loan interest deduction as an adjustment to income on his tax return.
a. True
b. False
Basic Scenario 7: Owen and Kimberly Walker
Directions
Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or
worksheets. Answer the questions following the scenario.
When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the
Xs as directed, or with any four digits of your choice.
Interview Notes
* Owen, age 69 and Kimberly, age 64 elect to file Married Filing Jointly. Neither taxpayer is blind.
* Owen is retired. He received Social Security benefits and a pension.
* Owen and Kimberly’s daughter Shelby, age 20, is a full-time college student in her third year of study. She
is pursuing a degree in nursing and does not have a felony drug conviction. She received a Form 1098-T
for 2023. Box 7 was not checked on her Form 1098-T for the previous tax year.
* Shelby spent the summer at home with her parents but lived in an apartment near campus during the
school year.
* Shelby received a scholarship that paid the full tuition. Owen and Kimberly paid the cost of course-related
books in 2023 not covered by scholarship. They paid $120 for a parking sticker, $5,500 for a meal plan,
$850 for textbooks purchased at the college bookstore, and $200 for access to an online textbook.
* Owen and Kimberly paid more than half the cost of maintaining a home and support for Shelby.
* Owen and Kimberly do not have enough deductions to itemize on their federal tax return.
* Owen, Kimberly, and Shelby are U.S. citizens and have valid Social Security numbers. They all lived in the
United States for the entire year.
* If Owen and Kimberly receive a refund, they would like to deposit it into their checking account. Documents
from Baldwin Bank show that the routing number is 111000025. Their checking account number is
11337890.
Test Questions
14. Owen and Kimberly’s standard deduction amount is $29,200.
a. True
b. False
- Owen and Kimberly’s total qualified education expenses used to calculate the American Opportunity
Credit is:
a. $850
b. $1,050
c. $2,500
d. $5,620 - Owen and Kimberly Walker can claim the Credit for Other Dependents.
a. True
b. False - What is the total amount of the Walker’s federal income tax withholding.
a. $7,500
b. $9,500
c. $11,000
d. $11,240 - The taxable amount of Owen’s Social Security is $12,715.00.
a. True
b. False - Which of the following statements are true?
a. Qualified dividends are part of the total ordinary dividends.
b. Qualified dividends qualify for lower, long-term capital gains tax rates.
c. Qualified dividends are reported on Form 1099-DIV.
d. All of the above.
Basic Scenario 8: Zoe Watson
Directions
Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or
worksheets. Answer the questions following the scenario.
When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the
Xs as directed, or with any four digits of your choice.
Interview Notes
* Zoe is single and 47 years old.
* Zoe has two children. Yvonne, age 19, has a job and earned wages of $5,200. Joshua, age 26 is totally
and permanently disabled and received Social Security benefits of $4,500. Both children lived with her all
year.
* Zoe paid all the cost of keeping up the home and more than half the support for her children.
* Zoe received disability pension benefits, but she has not reached the minimum
retirement age of her employer’s plan.
* She does not have enough expenses to itemize for the 2023 tax year.
* Zoe, Yvonne, and Joshua are U.S. citizens and have valid Social Security numbers. They all lived in the
United States for the entire year.
* If she has any balance due or refund, she would like to use Adelphia Bank and Trust. Zoe provided a
voided check.
Test Questions
20. Zoe’s disability pension is reported as wages and considered earned income for the purposes of the
earned income credit.
a. True
b. False
- The most advantageous filing status that Zoe can claim is?
a. Single
b. Married Filing Separately
c. Head of Household
d. Qualifying Surviving Spouse (QSS) - Who is Zoe’s qualifying child for purposes of claiming the Earned Income Tax Credit?
a. Yvonne
b. Joshua
c. Both Yvonne and Joshua
d. Neither Yvonne nor Joshua. - Can Zoe claim Joshua as a dependent?
a. Yes, because Joshua meets the relationship test.
b. No, because he is over the age limit.
c. Yes, because Joshua is permanently and totally disabled.
d. Both a and c - Zoe anticipates a balance due for next year. What actions should she take to prevent having a balance
due.
a. Submit a revised W-4P to increase her withholding
b. Make estimated tax payments
c. Do nothing and file her return as usual
d. Both a and b
Basic Scenario 9: Hailey Simpson
Directions
Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or
worksheets. Answer the questions following the scenario.
When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace
the Xs as directed, or with any four digits of your choice.
Interview Notes
* Hailey is 32 years old and married to Liam. Liam passed away on February 2, 2021. Hailey has not
remarried.
* Hailey’s nine-year-old daughter, Olivia, lived with her the entire year.
* Hailey paid more than half the cost of keeping up a home and support for Olivia.
* Hailey took a distribution from her traditional IRA in January to pay for her new roof.
* Hailey was a full-time high school teacher and earned $45,000 in wages. Hailey purchased supplies
including masks and hand sanitizer for her class out of her own pocket totaling $450.
* Hailey received a W-2G in the amount of $2,500 from the local casino.
* Hailey paid child and dependent care expenses for Olivia while she worked.
* Hailey and Olivia are U.S. citizens and have valid Social Security numbers. They lived in the United States
for the entire year.
* If Hailey is entitled to a refund, she would like to deposit half into her checking account and half into her
savings account. Documents from Adelphi Bank and Trust show that the routing number for both accounts
is 111000025 and her checking account number is 123456789.
Test Questions
25. Hailey is not required to report her gambling winnings on her return.
a. True
b. False
- Hailey’s most advantageous filing status is:
a. Head of Household
b. Married Filing Jointly
c. Married Filing Separately
d. Qualifying Surviving Spouse (QSS) - Hailey must pay an additional 10% tax on the early distribution from her IRA.
a. True
b. False - Hailey qualifies for which of the following credits?
a. Child Tax Credit
b. Child and Dependent Care Credit
c. Both a and b
d. Neither a nor b - Hailey should use Form _________ to split her refund between her savings and checking accounts.
- What amount can Hailey claim as an adjustment to income for the supplies she purchased out of
pocket?
a. $0
b. $250
c. $300
d. $450
