CTP CTP Tax Credits, Deductions & Exemptions

Question 1

The Earned Income Tax Credit (EITC) is a refundable credit designed primarily to benefit:

Accepted Answer

Low-to-moderate income workers and families

Answer

The EITC is a federal refundable tax credit for low-to-moderate income workers, phasing out as income increases, intended to reduce the tax burden on working families.

Question 2

A taxpayer who pays mortgage interest on a loan secured by their primary residence may deduct that interest on:

Accepted Answer

Schedule A as an itemized deduction

Answer

Qualified residence interest on a primary home mortgage is deducted as an itemized deduction on Schedule A, subject to the loan balance limitations under IRC §163(h).

Question 3

The Child Tax Credit for tax year 2024 is worth up to how much per qualifying child under age 17?

Accepted Answer

$2,000

Answer

For tax year 2024, the Child Tax Credit is worth up to $2,000 per qualifying child under age 17, with up to $1,700 refundable as the Additional Child Tax Credit.

Question 4

Which of the following expenses qualifies as a miscellaneous itemized deduction subject to the 2% AGI floor prior to the Tax Cuts and Jobs Act (TCJA)?

Accepted Answer

Unreimbursed employee business expenses

Answer

Before TCJA, unreimbursed employee business expenses were a miscellaneous itemized deduction deductible only to the extent they exceeded 2% of AGI.

Question 5

The standard deduction for a single filer for tax year 2024 is approximately:

Accepted Answer

$14,600

Answer

For tax year 2024, the standard deduction for a single filer is $14,600, adjusted annually for inflation under IRC §63.

(CTP) Certified Tax Professional Practice Test

(CTP) Certified Tax Professional Practice Test

CTP CTP Tax Credits, Deductions & Exemptions