H&R Block FINAL EXAM REVIEW CORRECTLY SOLVED..

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is the difference between earned income and unearned income? - Correct AnswerEarned income is received for services performed. Some examples of earned income include wages, commissions, tips, farmi... ng, and other business income. Unearned income is taxable income that does not meet the definition of earned income. Examples of unearned income include interest income, dividends, rents and royalties, pensions, alimony, and unemployment income. If an employee thinks their Form W-2 is incorrect, what should they do? - Correct AnswerIf the taxpayer's name, social security number, or earnings or withholdings are incorrect, the taxpayer should notify their employer and request a corrected Form W-2. The employee should request that the employer update their records and verify that the earnings were properly credited with the Social Security Administration. However, the taxpayer is still responsible for filing a timely tax return. If the employee's attempts to obtain a corrected Form W-2 from their employer are not successful, the taxpayer should notify the IRS. It may be necessary to prepare a substitute Form W-2. What information do you need to know to determine whether a taxpayer is required to file a return? - Correct Answer-The taxpayer's marital status, age at the end of the tax year, gross income for the year, and if the taxpayer is a dependent. Where on Form 1040 can you find the regular standard deduction amounts? - Correct Answer-In the left-hand margin on page 1 of Form 1040. They are: single and married filing separately, $12,200; married filing jointly and qualifying widow(er), $24,400; and head of household, $18,350. How much is added to the standard deduction if the taxpayer (or spouse) is age 65 or older, or blind? - Correct Answer-$1,300 for married taxpayers and qualifying widow(er)s, or $1,650 for all other unmarried taxpayers, is added for each condition. What is the personal exemption amount for 2019? - Correct Answer-There is no personal exemption for 2019. A personal exemption was an amount previously allowed by law to reduce income that would otherwise be taxed. The Tax Cuts and Jobs Act of 2017 repealed this deduction beginning in 2018. How is the gross income filing requirement determined for most taxpayers? - Correct Answer-The taxpayer's standard deduction, including the additional amounts for age and blindness. However, for MFS, the amount is $5. What is the difference between injured spouse allocation and innocent spouse relief? - Correct Answer-The IRS provides an injured spouse allocation for the taxpayer to protect their portion of a refund from a spouse's past-due federal income tax, unpaid student loans, or unpaid child and spousal support, or state income tax [Show More]

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