CTP Tax Preparation & Filing 2

Question 1

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

Accepted Answer

File Form 1040-X to amend the return

Answer

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.

Question 2

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

Accepted Answer

Head of Household

Answer

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

Question 3

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

Accepted Answer

$400

Answer

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

Question 4

What is the purpose of Form 4868?

Accepted Answer

To request an automatic extension of time to file

Answer

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.

Question 5

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

Accepted Answer

Child support received

Answer

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

(CTP) Certified Tax Professional Practice Test

(CTP) Certified Tax Professional Practice Test

CTP Tax Preparation & Filing 2