FREE IRA Knowledge Question and Answers

Question 1

Which of the following factors is taken into account when determining whether any social security benefits are taxed:

Accepted Answer

Interest that is tax-exempt

Answer

Employer-provided adoption benefits

Answer

Interest on education loans

Answer

The exclusion for foreign earned income

Question 2

Regarding the Form 8995 Qualified Business Income (QBI) Deduction Simplified Computation, whether of the following claims is true?

Accepted Answer

To claim the QBI Deduction, a single person with QBI whose taxable income is below the threshold amount must use Form 8995.

Answer

To claim the QBI Deduction on their corporate taxes, corporations must file Form 8995.

Answer

The QBI Deduction must be claimed by a partnership by attaching Form 8995 to their partnership tax return.

Answer

If it is found that a taxpayer qualifies for the QBI Deduction, the IRS will send them Form 8995.

Question 3

What circumstance(s) from the list below is reported on Form 1099 MISC:

Accepted Answer

Payments of $600 or more made in your line of work to a doctor or other supplier or provider of medical or healthcare services

Answer

Payments of rent of $400

Answer

Payments of $5 in royalty income

Answer

Payment of non-employee compensation of $600 or more

Question 4

In the current year, a child might be liable for kiddie tax if:

Accepted Answer

The child is under age 18 at the end of the tax year

Answer

The child has only nontaxable income of more than $2,200

Answer

The child is required to file a tax return and he or she files a joint return for the year

Answer

Neither parent of the child is alive at the end of the year

Question 5

What statement about the Form 1095A, Health Insurance Marketplace Statement, is true?

Accepted Answer

In order to reconcile advance payments of the premium tax credit or to claim the premium tax credit on their tax return, taxpayers will need Form 1095-A to complete Form 8962, Premium Tax Credit.

Answer

If a taxpayer has been insured by an employment insurance plan during the entire year, they will receive Form 1095-A to complete Form 8962, Premium Tax Credit.

Answer

In order to reconcile advance payments of the premium tax credit or to claim the premium tax credit on their tax return, taxpayers do not need Form 1095-A to complete Form 8962, Premium Tax Credit.

Answer

To reconcile advance payments of the premium tax credit or to claim the premium tax credit on their return, taxpayers must attach a Form 1095-A to their tax return.

Question 6

If you're 65 or older, or if one of the following applies to you:

Accepted Answer

Blind

Answer

Receiving unemployment compensation

Answer

Retired from the military

Answer

A beneficiary of a trust

Question 7

Which of the following statements regarding the PTC for premiums is accurate?

Accepted Answer

No PTC is allowed for any period during which an individual is not lawfully present in the United States

Answer

For at least 6 months during the year the individual was enrolled in a qualified health plan

Answer

Married individuals are required to file a joint return to qualify for the credit

Answer

Form 1095-A, Health Insurance Marketplace Statement, is not needed to complete Form 8962, Premium Tax Credit (PTC)