2020 Advanced Test Questions Review

**PLEASE NOTE that there have been new updates in Taxslayer and we have been issued a second stimulus check that were not in effect when the test and answers were written. The IRS, on their testing site, are giving guidance on some of the questions as what to enter--so read each question carefully when you go to the actual test site and enter your answers-the answer might change from when you have visited my site-they may tell you to enter something different.

Also, on the IRS site--do not enter dollar signs or commas $ , when typing in a dollar amount or it will be marked incorrect.

As of now, I do not know what guidance the IRS is giving for question number 27.
This has been a weird year

I am not reviewing entries or tracking entries-totally anonymous
This is a tool to check your answers before you submit online in Link and Learn certification Site. There will be hints if you get the answer incorrect.
If you find an error or disagree, please email me as I am human and could have made a mistake. maryvitataxes@gmail.com
Please note: PUB 4012 and PUB 4491 are available online https://www.irs.gov/pub/irs-pdf/p4012.pdf and https://www.irs.gov/pub/irs-pdf/p4491.pdf are referenced here. The Table of Contents is great--click on page number and it will take you to the section wanted--also use <find> to find keywords to help.

1.What is the most beneficial filing status allowable for Rebecca?

1 point

A Single

B Married filing jointly

C Head of Household

D Qualifying Widow(er)

Clear selection

2. Rebecca has $3,100 in qualifying child care expenses for the child and dependent care credit.

1 point

a. True

b. False

Clear selection

3. Pat and Terry are eligible for which of the following credits? Select the best answer

1 point

a. Credit for other dependents

b. Child tax credit

c. Earned income credit

d. Both a and b

Clear selection

4. Pat’s unemployment compensation is not taxable this year because it was received as a result of the coronavirus pandemic.

1 point

a. true

b. false

Clear selection

5. Which of the following statements is true?

1 point

a. Janice’s Medicaid waiver payments must be included in taxable income in order to be considered earned income when calculating the earned income credit.

b. Janice’s Medicaid waiver payments can never be considered earned income when calculating the earned income credit.

c. Janice’s Medicare waiver payments are not included in taxable income and are never considered earned income when calculating the earned income credit.

d. Janice’s Medicaid waiver payments are not included in taxable income but can be considered earned income for calculating the earned income credit.

Clear selection

6. What is the amount of Andrew’s HSA deduction on Form 8889, Part I, line 13?

1 point

a. $1,500

b. $2,000

c. $2,500

d. $3,455

Clear selection

7. Andrew can identify the employer’s HSA contribution by the Code W in Box 12 on his Form W-2.

1 point

a. True

b. False

Clear selection

8. What is the total unreimbursed qualified medical expenses reported on Form 8889,Part II?

1 point

a. $2,025

b. $2,153

c. $2,321

d. $2,400

Clear selection

9. Which individuals can make an agreement on who can claim Molly as a dependent?

1 point

a. Barbara and Jenny

b. Barbara and Claire

c. Jenny and Claire

d. Barbara, Jenny, and Claire

Clear selection

10. Who can claim the earned income credit for Molly?

1 point

a. Claire, because she has the lower AGI

b. Jenny, because she is Molly’s mother

c. Barbara, if Jenny allows her to claim Molly as a dependent

d. None of the above

Clear selection

11. If Robert chooses to itemize, which of the following is he eligible to claim as a deduction on Schedule A?

1 point

a. $700 GoFundMe donation

b. $3,500 Gambling losses

c. $120 Homeowner’s Association fees

d. $260 Mortgage Insurance Premiums (PMI)

Clear selection

12. If Robert chooses not to itemize, what is the amount that he can deduct as an above-the-line charitable contribution adjustment in 2020?

1 point

a. $250

b. $300

c. $350

d. $1,050

Clear selection

13. What is the amount of Carly’s student loan interest deduction on Form 1040,Schedule 1? $________.

1 point

14. How do educator expenses affect Carly’s tax return?

1 point

a. Carly can claim these expenses as a miscellaneous itemized deduction on her Schedule A

b. These expenses cannot be claimed on her 2020 tax return because she does not meet the requirements to claim the educator expenses.

c. $250 is deducted as an adjustment to income on Form 1040, Schedule 1.

d. Carly is entitled to deduct the full $375 as an adjustment to income on Form 1040, Schedule 1.

Clear selection

15. What is the amount of qualified child care expenses used in the calculation of the Franklin’s Form 2441, Child and Dependent Care Expenses?

1 point

a. $0

b. $750

c. $1,500

d. $2,250

Clear selection

16. The refundable portion of the American opportunity credit located on Form 8863,Education Credit is $________.

1 point

17. The amount of the Franklin’s net premium tax credit on Form 8962, Premium Tax Credit is $________. Advanced Question 17-Practice has last years federal poverty guidelines-the answer is $1646 Note: In the initial release of the Practice Lab, last year’s Federal Poverty Line amount is used to calculate Form 8962, Premium Tax Credit. Enter 1646 as the correct answer. (In Taxslayer you probably got $1787 the true correct answer but please enter 1646 for the test)

1 point

18. The Franklins can claim a recovery rebate credit of $________ for Cristina on their2020 tax return.

1 point

19. Do the Franklins qualify for the earned income credit?

1 point

a. Yes, they meet all the qualifications to receive the credit.

b. No, their income is too high

Clear selection

20. The Kennedy’s standard deduction on their 2020 tax return is $________.

1 point

21. What is the amount of taxable interest reported on the Kennedys’ Form 1040?

1 point

a. $0

b. $30

c. $110

d. $140

Clear selection

22. What is the total net amount of capital gain or (loss) reported on Form 1040?

1 point

a. ($3,000)

b. $250

c. $10,680

d. $10,930

Clear selection

23. What is the taxable portion of Travis’ pension from Pinto Corporation using the Simplified Method? $________.

1 point

24. Sylvia is eligible to make a contribution to her traditional IRA by the due date of her tax return?

1 point

a. True

b. False

Clear selection

25. What are the Kennedys’ total gambling winnings reported on their Form 1040,Schedule 1?

1 point

a. $215

b. $763

c. $2,500

d. $2,715

Clear selection

26. The taxable portion of the Social Security benefits on the Kennedys’ Form 1040 is $17,850.

1 point

a. True

b. False

Clear selection

27. What are the total payments reported on the Kennedys’ Form 1040? $________. *** Per the IRS go ahead and enter 4385 which is the amount before the second stimulus check came out

1 point

28. When must Sylvia take a required minimum distribution (RMD) from her traditional IRA?

1 point

a. By December 31, 2020, because she does not qualify for a waiver.

b. By December 31, 2021, because the RMD was waived for tax year 2020.

c. By April 1 and December 31, 2022, the year after she turns age 72.

d. Sylvia will never be required to take the RMD from her traditional IRA

Clear selection

29. Richard’s most beneficial filing status allowable is Head of Household.

1 point

A. True

B. False

Clear selection

30. Which item(s) can be deducted by Richard as a business expense?

1 point

a. Work gloves

b. Work clothes (suitable for everyday use)

c. Rake

d. Both a and c

Clear selection

31. What is the qualified business income (QBI) deduction on the Richard’s tax return?

1 point

a $0

b. $648

c. $718

d. $3,857

Clear selection

32. Richard must report $________ of his canceled debt on his 2020 tax return.

1 point

33. Richard is required to pay a 10% additional tax on the early distribution from his IRA account in 2020.

1 point

a. True

b. False

Clear selection

34. Richard has been assigned an Identity Protection PIN by the IRS. How does this affect preparation of Richard’s tax return?

1 point

a. The PIN must be entered during tax return preparation

b. The PIN will appear on Richard’s Form 1040.

c. Failure to enter the PIN will cause Richard’s e-filed return to be rejected by the IRS.

d. All of the above.

Clear selection

See image below for question 35-- from testing site 1/10/21

35. Which of the following statements is true? *** Per IRS--rules have changed as per the testing site--now enter D as of 1/10/2021

1 point

a. Richard is able to defer half the taxpayer and employer share of Social Security tax until December 31, 2021 and the other half until December 31, 2022.

b. Richard is able to defer half of the taxpayer share of Social Security tax until December 31, 2021 and the other half until December 31, 2022.

c. Richard is able to defer half of the employer share of Social Security tax until December 31, 2021 and the other half until December 31, 2022.

d. Richard does not have the option to defer half of his share or the employer share of Social Security tax.

Clear selection

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