Tax Preparation Deductions and Credits

Question 1

What is the 2024 standard deduction for a single taxpayer under age 65?

Accepted Answer

$14,600

Answer

The standard deduction for a single filer in 2024 is $14,600, adjusted annually for inflation.

Question 2

Which of the following is an above-the-line deduction (adjustment to income)?

Accepted Answer

Student loan interest

Answer

Student loan interest (up to $2,500) is an above-the-line deduction that reduces AGI regardless of whether the taxpayer itemizes.

Question 3

What is the maximum Child Tax Credit per qualifying child for 2024?

Accepted Answer

$2,000

Answer

The Child Tax Credit is up to $2,000 per qualifying child under age 17, with a refundable portion of up to $1,700.

Question 4

The Earned Income Tax Credit (EITC) is best described as:

Accepted Answer

A refundable credit for low-to-moderate income workers

Answer

The EITC is a refundable credit, meaning it can result in a refund even if the taxpayer has no tax liability.

Question 5

Medical expenses are deductible as an itemized deduction to the extent they exceed what percentage of AGI?

Accepted Answer

7.5%

Answer

Medical expenses exceeding 7.5% of adjusted gross income (AGI) are deductible as an itemized deduction on Schedule A.

Tax Preparation Practice Test