Tax Preparation Income Types and Reporting

Question 1

Which form reports wages, tips, and other compensation paid by an employer to an employee?

Accepted Answer

Form W-2

Answer

Form 1099-NEC

Answer

Form 1099-MISC

Answer

Form 1098

Question 2

A freelancer receives $700 from a single client. Is the client required to issue a 1099-NEC?

Accepted Answer

No, the threshold is $600

Answer

Yes, any amount requires a 1099

Answer

No, only amounts over $1,000 require reporting

Answer

Yes, amounts over $500 require a 1099

Question 3

Social Security benefits become partially taxable when the taxpayer's combined income exceeds which threshold for single filers?

Accepted Answer

$25,000

Answer

$15,000

Answer

$32,000

Answer

$50,000

Question 4

Which of the following is generally excluded from gross income under the IRC?

Accepted Answer

Gifts received

Answer

Gambling winnings

Answer

Wages from a second job

Answer

Interest on a personal savings account

Question 5

An employee receives $6,000 in employer-provided educational assistance. How much is excludable from income?

Accepted Answer

$5,250

Answer

$0 — all is taxable

Answer

$6,000

Answer

$2,500

Question 6

Which type of income is reported on Schedule E of Form 1040?

Accepted Answer

Rental income

Answer

Self-employment income

Answer

Gambling winnings

Answer

Alimony received