IRA

FREE IRA Knowledge Question and Answers

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

Employer-provided adoption benefits

Interest on education loans

Interest that is tax-exempt

The exclusion for foreign earned income

Correct! Wrong!

Explanation:
Interest income that is exempt from federal and/or state taxes is referred to as tax-exempt interest.

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

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

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

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

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

Correct! Wrong!

Explanation:
Your qualified business income (QBI) deduction is computed using Form 8995, "Qualified Business Income Deduction Simplified Computation." Up to 20% of an individual taxpayer's net QBI from a trade or business may be deducted, as well as some trusts and estates.

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

Receiving unemployment compensation

Blind

Retired from the military

A beneficiary of a trust

Correct! Wrong!

Explanation:
If you file as Single or Head of Household and are 65 years of age or older, your standard deduction rises by $1,700. Your standard deduction rises by $1,700 if you qualify as legally blind. Your standard deduction rises by $1,350 if you are married and filing jointly and you or your spouse are 65 years of age or older.

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

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

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

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

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

Correct! Wrong!

Explanation:
If a child satisfies the Internal Revenue Code's standards for age and support, the child is subject to the kiddie tax (IRC). Children who are: 17 years of age or under at the end of the tax year are subject to the kiddie tax because support obligations do not apply to those under 18.

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

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.

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.

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.

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.

Correct! Wrong!

Explanation:
Form 1095-A is provided by health insurance marketplaces to:

1. The IRS must disclose specific data about people who sign up for a qualified health plan through the Health Insurance Marketplace.
2. People to enable them to:
> claim the premium tax credit;
> reconcile the credit on their returns with the advance credit payments made for the premium tax credit; and
> submit a correct tax return.

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

Payments of rent of $400

Payments of $5 in royalty income

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

Payment of non-employee compensation of $600 or more

Correct! Wrong!

Explanation:
Anyone who has given another person at least $10 in royalties, broker payments in lieu of dividends, or tax-exempt interest must fill out and send out Form 1099-MISC: Miscellaneous Income (also known as Miscellaneous Information). Additionally, it is sent to everyone you paid at least $600 to in the past year.

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

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

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

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

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

Correct! Wrong!

Explanation:
The premium tax credit, or PTC, is a refundable benefit that assists qualified people and families in paying the premiums for health insurance plans obtained via the Health Insurance Marketplace. You must fulfill specific requirements and submit a tax return with Form 8962, Premium Tax Benefit, in order to receive this credit (PTC).

FREE IRA Knowledge Question and Answers

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

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

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

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

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

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

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

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