AccuPrep Tax Academy Taxes 101
End of Course Exam
Who is a taxpayer?
An individual or business entity that is obligated to pay taxes to a federal, state, or local government.
A person taxes are paid to
A reseller who collects sales tax
IRS
What form is used for IRS e-file Signature Authorization.
Form 8879
Form 1040
Form Schedule C
Form W2
What is a W-2 Form
A W-2 tax form shows important information about the income you’ve earned from your employer, amount of taxes withheld from your paycheck
A form that shows your total refund
A form showing retirement income
There's no such form
A PTIN is A Preparer Tax Identification Number issued by the IRS to paid tax return preparers
True
False
1099-MISC reports payments made to others in the course of your trade or business, not including those made to employees or for nonemployee compensation.
True
False
What is the purpose of a 1098-T form?
A type of W2 form
A statement that colleges and universities are required to issue to certain students. It provides the total dollar amount paid by the student for what is referred to as qualified tuition and related expenses (or “QTRE”) in a single tax year.
An income reporting document
A mortgage interest statement
Which statement best describes form 1040
A form received from an employer, showing annual earnings
Form 1040 is used by U.S. Taxpayers to file an annual income tax return
One Thousand and Forty tax laws
A form a tax preparer uses to get referrals
EITC is a refundable tax credit
True
False
AOTC American Opportunity Credit is a Credit that is not refundable
True
False
Child and Dependent Care Credit has an age limit for eligible dependents
True
False
Tax Preparer must thoroughly interview and question the taxpayer and collect documentation to show that the taxpayer is qualified for any credits or deductions claimed
No, it is not a tax preparer's responsibility
It is optional and up to the tax preparer's discretion
Yes, It's a paid tax preparer's due diligence requirement.
No, the taxpayer may feel offended.
When a taxpayer choses not to pay preparation fees upfront....
The tax preparer can add his/her bank account along with the taxpayer's to the refund allocation to collect the fee
The tax preparer can have the taxpayer's full refund deposited to tax preparer's account and issue the difference to taxpayer.
An approved Refund Transfer is the only other legal option
Tell the taxpayer the taxes were filed and save it as draft until they are able to pay upfront
Who is a dependent for tax purposes?
Anyone you want to claim on your taxes
A child under 18 years old
The IRS defines a dependent as a qualifying child (under age 19 or under 24 if a full-time student, or any age if permanently and totally disabled) or a qualifying relative. A qualifying dependent can have income but cannot provide more than half of their own annual support.
How is the amount of EITC (earned income tax credit) you receive determined?
It is a flat amount per child
It's solely based on the age of the children
The earned income tax credit, also known as the EITC or EIC, is a refundable tax credit for low- and moderate-income workers. For the 2021 tax year, the earned income credit ranges from $1,502 to $6,728 depending on tax-filing status, income and number of children. In 2022, the EITC is $560 to $6,935.
It's a credit for maximum 2 children
What is an estimated payment?
The estimate a tax preparer gives prior to completing a tax return
The amount you expect to get from a tax refund
A tax paid by an employer on the employee's behalf
Estimated tax payments are made each quarter to the Internal Revenue Service (IRS) by people whose income isn't subject to withholding taxes.
Which statement best describes a Refund Transfer?
An advance loan of a tax refund
You can not file your return and receive your refund without applying for a Refund Transfer.
A bank product used to pay for your tax preparation fees. Refund Transfer is a bank deposit product, not a loan.
Refund transfers are free
Which of these is not a tax deduction?
Property Tax
Charitable contributions
Marriage deduction
Property Tax Deductions
Which of these is not an IRS filing status?
Single
Married Filing Jointly
Head of Household
Married Filing Single
I do not have a dependent, I live alone and I am responsible for 100% of my household expenses. I can use HOH filing status.
True
False
2021 standard deduction Single taxpayer $12,550. Taxpayer total itemized deductions $11300. Which scenario will be better for the taxpayer?
If taxpayer has receipts for all deductions, choose the itemized deduction.
It is always more beneficial to itemize
Standard deduction is higher in this scenario and the best choice.
Standard deduction is higher but the itemized deduction credit will result in a better outcome.
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