Tax Flow Identification

Question 1

municipal bond interest

Answer 1

an exclusion from income

Question 2

accident and health plans: employer premiums

Answer 2

an exclusion from income

Question 3

fringe benefits

Answer 3

an exclusion from income

Question 4

inheritances

Answer 4

an exclusion from income

Question 5

gifts

Answer 5

an exclusion from income

Question 6

accident and health plans: the amount received

Answer 6

an exclusion from income

Question 7

scholarships

Answer 7

an exclusion from income

Question 8

personal residence sale gains

Answer 8

an exclusion from income ($250k/$500k)

Question 9

adoption assistance

Answer 9

an exclusion from income

Question 10

death benefits

Answer 10

an exclusion from income

Question 11

dependent care assistance programs

Answer 11

an exclusion from income

Question 12

educational assistance programs

Answer 12

an exclusion from income ($5,250)

Question 13

debt discharged

Answer 13

an exclusion from income in certain circumstances

Question 14

meals and lodging as an employee

Answer 14

an exclusion from income

Question 15

interest for Education savings bonds (Series EE or Series I)

Answer 15

an exclusion from income

Question 16

compensatory damages compensation

Answer 16

an exclusion from income

Question 17

support payments received

Answer 17

an exclusion from income (child support and post 2018 alimony)

Question 18

classroom supplies (educator expenses)

Answer 18

adjustment to income ($300/$600)

Question 19

the business expenses for government officials who work on a fee basis

Answer 19

adjustment to income

Question 20

the business expenses for performing artists

Answer 20

adjustment to income

Question 21

the business expenses for reservists who traveled more than 100 miles to perform services

Answer 21

adjustment to income

Question 22

HSA contributions made with AT $

Answer 22

adjustment to income

Question 23

moving expenses for active duty U.S. Armed Forces

Answer 23

adjustment to income

Question 24

the ER portion of SE Tax (1/2 SE Tax)

Answer 24

adjustment to income

Question 25

retirement account contributions for SE and small business owners

Answer 25

adjustment to income

Question 26

health insurance premiums for SE workers

Answer 26

adjustment to income

Question 27

dental and LTC premiums for SE workers

Answer 27

adjustment to income

Question 28

early withdrawal penalties for savings accounts (e.g. CD)

Answer 28

adjustment to income

Question 29

alimony payments for pre 2019 agreements

Answer 29

adjustment to income

Question 30

traditional IRA contributions

Answer 30

adjustment to income subject to phaseouts

Question 31

student loan interest

Answer 31

adjustment to income up to $2,500 interest

Question 32

unreimbursed medical and dental expenses

Answer 32

itemized deduction, only those exceeding 7.5% of AGI

Question 33

state and local taxes

Answer 33

itemized deduction, $10k limit

Question 34

mortgage interest paid on primary and secondary residence

Answer 34

itemized deduction, max $750k debt and interest limited to net investment income

Question 35

cash donations to charity

Answer 35

itemized deduction, limited to 60% AGI

Question 36

“federally declared disaster” casualty and theft losses

Answer 36

itemized deduction. Lesser of (FMV or Basis) - insurance payments - $100 deductible. Losses must be greater than 10% AGI.

Question 37

earned income credit

Answer 37

low- to moderate-income workers and families get a (refundable) tax break. amount depends on the number of children, filing status, and income

Question 38

additional child tax credit

Answer 38

refundable up to $1600 per qualifying child with SSN, 15% of income above $2500. phaseout at $200k/$400k AGI.

Question 39

American Opportunity Credit

Answer 39

credit for qualified education expenses paid for an eligible student for the first 4 years of higher education. up to 40%, or $1000, refundable

Question 40

Premium Tax Credit

Answer 40

refundable tax savings to offset the cost of marketplace health insurance if your income falls between 100 and 400% of the federal poverty level.

Question 41

Child and Dependent Care Credit

Answer 41

20% to 35% of expenses paid for someone to care for a child (under 13) or another dependent, nonrefundable up to $3000/6000 (1/multi)

Question 42

Child Tax Credit

Answer 42

nonrefundable up to $2000 for a qualifying

Question 43

Retirement Savings Contribution Credit

Answer 43

special tax break to low- and moderate-income taxpayers who are saving for retirement. the amount depends on AGI, filing status, and your contribution and is nonrefundable

Question 44

Lifetime Learning Credit

Answer 44

qualifying tuition and fee payments made to a post-secondary school. 20% of up to $10,000, nonrefundable

Question 45

negligence tax penalty

Answer 45

20% of tax deficiency (no intent to defraud)

Question 46

fraud tax penalty

Answer 46

75% of tax deficiency (intention to defraud)

Question 47

frivolous return penalty

Answer 47

$5,000

Question 48

failure to file penalty

Answer 48

5% per month (partial included) up to 25%, minimum $510 at 60 days

Question 49

failure to pay penalty

Answer 49

0.5% per month up to 25%

Question 50

understatement of liability penalty

Answer 50

if tax withheld from W-2 and/or estimated payments is less than 90% of the current year liability or 100$ of the prior year liability, penalty is based on amount, period, and a quarterly interest rate

Question 51

failure to furnish a copy to the taxpayer penalty

Answer 51

$60 per failure of the preparer per return or refund claim

Question 52

failure to sign return penalty

Answer 52

$60 per failure of the preparer per return or refund claim

Question 53

failure to furnish identifying number penalty

Answer 53

$60 per failure of the preparer per return or claim to include a preparer tax identifying number (PTIN)

Question 54

failure to retain copy or list penalty

Answer 54

$60 per failure of the preparer to keep a copy or list of a tax return or claim

Question 55

failure to file correct information returns penalty

Answer 55

$60 per failure of the preparer to include correct information on tax returns

Question 56

failure to be diligent in determining eligibility for certain tax benefits penalty

Answer 56

$600 per failure of the preparer to determine eligibility for HoH and certain tax credits