Tax Consulting Registered Tax Return Preparer 4

Question 1

A client has $3,000 in net capital losses for the year. How much can offset ordinary income?

Accepted Answer

Up to $3,000, with any excess carried forward

Answer

The full amount has no limit

Answer

Only $1,000

Answer

Capital losses cannot offset ordinary income

Question 2

Which form reports wages and federal tax withheld from an employer?

Accepted Answer

Form W-2

Answer

Form 1099-MISC

Answer

Form 1098

Answer

Form W-4

Question 3

What filing status may a taxpayer use if their spouse died during the tax year and they have a dependent child, for two following years?

Accepted Answer

Qualifying Surviving Spouse

Answer

Single

Answer

Head of Household only

Answer

Married Filing Separately

Question 4

Self-employment tax covers which programs?

Accepted Answer

Social Security and Medicare

Answer

Federal income tax only

Answer

Unemployment insurance

Answer

State disability

Question 5

A taxpayer paid $4,000 in qualified college tuition. Which education credit might apply?

Accepted Answer

American Opportunity Tax Credit

Answer

Earned Income Tax Credit

Answer

Saver's Credit

Answer

Adoption Credit

Question 6

Under Circular 230, may a preparer charge a contingent fee for preparing an original tax return?

Accepted Answer

No, contingent fees are generally prohibited for original returns

Answer

Yes, always

Answer

Yes, if the client agrees in writing

Answer

Only for business returns

Question 7

Which form reports mortgage interest a taxpayer paid during the year?

Accepted Answer

Form 1098

Answer

Form 1099-INT

Answer

Form W-2

Answer

Form 1095-A