Tax Preparation & Filing Flashcards

A taxpayer receives a corrected W-2 (W-2c) after already filing their return. What should they do?

Answer: File Form 1040-X to amend the return

When a corrected W-2c changes tax liability, the taxpayer must file Form 1040-X (Amended U.S. Individual Income Tax Return) to correct the original filing.

Which filing status generally results in the lowest tax rate for a single parent with a qualifying child?

Answer: Head of Household

Head of Household filing status provides lower tax rates and a higher standard deduction than Single status for eligible single parents with qualifying dependents.

A taxpayer who is self-employed must pay self-employment tax on net earnings above what threshold?

Answer: $400

Self-employment tax applies when net self-employment earnings are $400 or more, requiring the individual to file Schedule SE.

What is the purpose of Form 4868?

Answer: To request an automatic extension of time to file

Form 4868 grants an automatic 6-month extension of time to file the federal income tax return, though it does not extend the time to pay taxes owed.

Which of the following income types is generally NOT subject to federal income tax?

Answer: Child support received

Child support payments received are not taxable income to the recipient, unlike alimony under pre-2019 agreements, gambling winnings, and unemployment compensation.

A taxpayer uses their personal vehicle 60% for business. They drove 12,000 miles total. Using the standard mileage rate, how many business miles can be deducted?

Answer: 7,200 miles

Business miles = 12,000 total miles × 60% business use = 7,200 miles eligible for the standard mileage rate deduction.

Which form is used to report tip income that was not reported to the employer?

Answer: Form 4137

Form 4137 (Social Security and Medicare Tax on Unreported Tip Income) is used to calculate and report the taxes owed on tips not reported to an employer.