Filing Requirements

Question 1

Upon reviewing a new client’s prior year tax return, the preparer sees taxes paid for the First-Time Homebuyer Credit. The preparer should ask the taxpayer all of the following EXCEPT

Answer 1

What was the total amount of the original credit received?

What was the total amount of the original credit received?

What was the total amount of the original credit received?

Question 2

Which items from the prior-year return may be needed to complete the current-year return?
1. State income tax refund
2. AMT for credit
3. AGI
4. Gain (loss) carryover

Answer 2

1, 2,4

certain items from the prior year return may be needed to complete the current-year return [state income tax refund, AMT for credit, gain (loss) carryover, charitable gift carryover, etc.].

Question 3

Form 8938, Statement of Specified Foreign Financial Assets?

Answer 3

Form 8938 is attached to the taxpayer’s annual return and filed by the due date, including extensions.

Question 4

Report of Foreign Bank and Financial Accounts (FBAR) requirements

Answer 4

filed online with the Financial Crimes Enforcement Network.

Question 5

The requirement to file the FinCEN Form 114 applies to U.S. persons with a financial interest in or signature authority over any foreign financial account(s), if the aggregate value of these accounts, at any time during the calendar year, exceeds

Answer 5

10,000

Question 6

The taxpayer knew of the errors and signed the joint return because (s)he was pressured or threatened by his or her spouse.

Answer 6

would not disallow innocent spouse

Question 7

An injured spouse is

Answer 7

one whose spouse owes a past-due amount.

To be considered an injured spouse, the injured spouse must file a joint return, have reported income, have made and reported tax payments, not be required to pay a past-due amount, and file Form 8379 within the deadlines.

Question 8

requirement that must be met in determining whether a married taxpayer is considered unmarried for head of household filing-status purposes?

Answer 8

An individual must file a separate return.

An individual must pay more than one-half the cost of keeping up a home for the tax year.

An individual must pay more than one-half the cost of keeping up a home for the tax year.

The taxpayer must be able to claim the child as a dependent.

Question 9

Which of the following is NOT a requirement you must meet to claim head of household filing status

Answer 9

Your home was the main home of your foster child for the entire year.

Question 10

All of the following are conditions for a taxpayer’s qualifying for innocent spouse relief

Answer 10

Establishment of the fact that the taxpayer did not know and had no reason to know that there was an understatement of tax.

The return was jointly filed and had an understatement of tax due to erroneous items of the taxpayer’s spouse (or former spouse).

The return was jointly filed and had an understatement of tax due to erroneous items of the taxpayer’s spouse (or former spouse).

Question 11

Which of the following is a requirement that must be met in determining whether a taxpayer is considered unmarried for head of household filing-status purposes?

Answer 11

An individual’s home must be, for at least 6 months, the main home of his or her child, stepchild, or qualified foster child whom (s)he or the noncustodial parent can properly claim as a dependent.

Question 12

or 2023, Jane is unmarried and paid more than half the cost of keeping up her home. All of the following dependents would qualify Jane to file as head of household EXCEPT

Answer 12

Jane’s married son, who could properly be claimed as a dependent on his father’s return only.

Question 13

Mrs. W’s husband died in Year 1. She has not remarried and has maintained a home for herself and her dependent son, whom she can claim. In the summer of Year 3, the son was killed in an automobile accident. What is Mrs. W’s best filing status for Year 3?

Answer 13

Qualifying surviving spouse.

Question 14

Standard deductions in 2023 are

Answer 14

$27,700 for married filing jointly, 65+1300 each increase
$20,800 for heads of household,
$13,850 for single individuals - 65+ 1850, and $13,850 for married filing separate taxpayers.
Over 65 1,850
Blind 1,850
A taxpayer who has three children and files as a head of household must file a return if his or her gross income equals or exceeds $20,800.

Question 15

Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, will provide the taxpayer with the following:

Answer 15

6 month extension
Oct. 15

Question 16

In the case of an individual who is claimed as a dependent on another’s tax return, (s)he must file if unearned income exceeds

Answer 16

$1,250 or total income exceeds the standard deduction.

Question 17

Four tests under the “qualifying child” classification are

Answer 17

(1) relationship, (2) age, (3) principal residence, and (4) support.

Question 18

four tests under the “qualifying relative” classification are

Answer 18

(1) relationship or residence, (2) gross income, (3) support, and (4) dependency.

Question 19

Net unearned income of a dependent is unearned income minus the sum of $1,250 and which of the following?

Answer 19

The greater of $1,250 of the standard deduction or $1,250 of itemized deductions or the amount of allowable deductions that are directly connected with the production of unearned income.

Question 20

How is the net unearned income of a dependent under the age of 19 taxed?

Answer 20

Dependent is taxed Rate is dependent’s parent’s marginal rate.

Question 21

When can a dependent child’s income be taxed at his or her parent’s marginal rate?

Answer 21

When a dependent child has unearned income, has earned income less than half his or her support, and is under age 19 with at least one living parent.

Question 22

All of the following are included in calculating the total support of a dependent EXCEPT

Answer 22

A taxpayer must provide over one-half of the support for a person to be considered a dependent [Sec. 152(a)].

The term support includes food, shelter, clothing, medical and dental care, education, and other items contributing to the individual’s maintenance and livelihood [Reg. 1.152-1(a)(2)].

Although medical care is an item of support, medical insurance benefits are not included. Medical insurance premiums are included (Publication 501).

Question 23

With regard to claiming a dependent, all of the following statements are true EXCEPT

Answer 23

False : In calculating a person’s total support, do not include tax-exempt income used to support that person.

Question 24

Claiming a dependent following is true

Answer 24

1. To meet the citizenship test, a person must be a U.S. citizen or resident, or a resident of Canada or Mexico.
2. A person does not meet the member-of-the-household test if at any time during the tax year the relationship between the taxpayer and that person violates local law.
   3.A person who died during the year, but was a member of your household until death, will meet the member-of-the-household test.

Question 25

A child may be subject to the kiddie tax in the current year if

Answer 25

The child is under age 18 at the end of the tax year.

Question 26

The standard deduction for a dependent with unearned income is limited to

Answer 26

the greater of $1,250 or the amount of earned income plus $400.

Question 27

For the year, Mr. and Mrs. Cunningham filed a joint return. During the year, they provided more than 50% of the support for the following individuals:
The Cunninghams’ single son, age 20, lived with them all year and earned $5,950, which was spent on his support.
The Cunninghams’ single daughter, age 28 and a full-time student for 12 months. She earned $5,750, which was spent on her support.
Mrs. Cunningham’s mother, age 68, a Mexican citizen living in Mexico, received Social Security benefits of $5,950.
How many dependents may Mr. and Mrs. Cunningham claim on their tax return?
A.

Answer 27

1