Tax Consulting Registered Tax Return Preparer 3

Question 1

A taxpayer is 67 and single. How does age affect the standard deduction?

Accepted Answer

They qualify for an additional standard deduction amount

Answer

The standard deduction is eliminated

Answer

They must itemize

Answer

Age has no effect on deductions

Question 2

Which schedule reports capital gains and losses from selling stocks?

Accepted Answer

Schedule D

Answer

Schedule C

Answer

Schedule B

Answer

Schedule SE

Question 3

What distinguishes a tax credit from a tax deduction?

Accepted Answer

A credit reduces tax dollar-for-dollar; a deduction reduces taxable income

Answer

Both reduce tax equally

Answer

A deduction reduces tax dollar-for-dollar

Answer

A credit only applies to businesses

Question 4

A dependent must generally meet which key test relating to support?

Accepted Answer

The dependent must not have provided more than half of their own support

Answer

The dependent must earn over $50,000

Answer

The dependent must be over 24

Answer

The dependent must file jointly

Question 5

Interest income of $1,800 from a savings account is reported on which schedule when over the threshold?

Accepted Answer

Schedule B

Answer

Schedule A

Answer

Schedule C

Answer

Schedule F

Question 6

Which penalty can the IRS assess a preparer for understating tax due to an unreasonable position?

Accepted Answer

A penalty under IRC §6694

Answer

A trust fund recovery penalty

Answer

An accuracy-related penalty on the client only

Answer

No penalty applies to preparers

Question 7

When must a paid preparer sign a return and include their PTIN?

Accepted Answer

On every return they prepare for compensation

Answer

Only on returns over $1 million income

Answer

Only when e-filing

Answer

Only if the client requests it