How to Get Technical Updates?

Updates to the volunteer training materials will be contained in Publication 4491-X, VITA/TCE Training Supplement. The most recent version can be downloaded at: www.irs.gov/pub/irs-pdf/p4491x.pdf

Volunteer Standards of Conduct

VITA/TCE Programs

The mission of the VITA/TCE return preparation programs is to assist eligible taxpayers in satisfying their tax responsibilities by providing free tax return preparation. To establish the greatest degree of public trust, volunteers are required to maintain the highest standards of ethical conduct and provide quality service.

Annually all VITA/TCE volunteers must pass the Volunteer Standards of Conduct (VSC) certification test and agree that they will adhere to the VSC by signing and dating Form 13615, Volunteer Standards of Conduct Agreement-VITA/TCE Programs, prior to volunteering at a VITA/TCE site. In addition, return preparers, quality reviewers, coordinators, and tax law instructors must certify in Intake/Interview and Quality Review. Volunteers who answer tax law questions, instruct tax law classes, prepare or correct tax returns, or conduct quality reviews of completed returns must also certify in tax law prior to signing the form. Form 13615 is not valid until the sponsoring partner’s approving official (coordinator, instructor, administrator, etc.) or IRS contact confirms the volunteer’s identity, name and address, and signs and dates the form. Volunteers’ names and addresses in Link & Learn Taxes must match their government issued photo identification. Advise volunteers to update their My Account page in Link & Learn Taxes with their valid name and address.

As a volunteer in the VITA/TCE programs, you must adhere to the following Volunteer Standards of Conduct:

VSC 1 – Follow all Quality Site Requirements (QSR).

VSC 2 – Do not accept payment, ask for donations, or accept refund payments for federal or state tax return preparation from customers.

VSC 3 – Do not solicit business from taxpayers you assist or use the information you gained about them for any direct or indirect personal benefit for yourself, any other specific individual or organization.

VSC 4 – Do not knowingly prepare false returns.

VSC 5 – Do not engage in criminal, infamous, dishonest, notoriously disgraceful conduct, or any other conduct considered to have a negative effect on the VITA/TCE programs.

VSC 6 – Treat all taxpayers in a professional, courteous, and respectful manner.

Failure to comply with these standards could result in, but is not limited to, the following:

Removal from all VITA/TCE programs

Inclusion in the IRS Volunteer Registry to bar future VITA/TCE activity indefinitely

Deactivation of your sponsoring partner’s site VITA/TCE electronic filing ID number (EFIN)

Removal of all IRS products, supplies, loaned equipment, and taxpayer information from your site

Termination of your sponsoring organization’s partnership with the IRS

Termination of grant funds from the IRS to your sponsoring partner; and

Referral of your conduct for potential TIGTA and criminal investigations.

TaxSlayer® is a copyrighted software program owned by Rhodes Computer Services. All screen shots that appear throughout the official Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) training materials are used with the permission of Rhodes Computer Services.

Confidentiality Statement:

All tax information you receive from taxpayers in your volunteer capacity is strictly confidential and should not, under any circumstances, be disclosed to unauthorized individuals.

Form 6744 – 2024 VITA/TCE Test

Preface

Quality Return Process

An accurate return is the most important aspect of providing quality service to the taxpayer. It establishes credibility and integrity in the program. Throughout the training material you were introduced to the major components of the VITA/TCE return preparation process, including:

Understanding and applying tax law

Screening and interviewing taxpayers

Using references, resources, and tools

Conducting quality reviews

During training, you were given an opportunity to apply the tax law knowledge you gained. You learned how to verify and use the information provided by the taxpayer on the intake and interview sheet in order to prepare a complete and correct tax return.

You also learned how to use your reference materials and conduct a quality review.

Now it is time to test the knowledge and skills you have acquired and apply them to specific scenarios. This is the final step to help you prepare accurate tax returns within your scope of training.

We welcome your comments for improving these materials and the VITA/TCE programs. You may follow the evaluation procedures located on Link & Learn Taxes at www.irs.gov or e-mail your comments to partner@irs.gov.

Thank you for being a part of this valuable public service for your neighbors and community.

Test Instructions

Special Accommodations

If you require special accommodations to complete the test, please advise your instructor, Site Coordinator, or other VITA/TCE volunteer contact immediately.

Reference Materials

This test is based on the tax law that was in effect when the publication was printed. Use tax year 2024 values for deductions, exemptions, tax, or credits for all answers on the test. Remember to round to the nearest dollar. Test answers have been rounded up or down as directed in the specific instructions on the form.

This is an open book test. You may use your course book and any other reference material you will use as a volunteer. A draft Form 13614-C, Intake/Interview and Quality Review Sheet, is included in the return preparation scenarios. Use this form when completing the tax returns and answering the test questions.

Please complete this test on your own. Taking the test in groups or with outside assistance is a disservice to the customers you volunteered to help.

Using Tax Preparation Software

The Practice Lab is a tax year 2024 tax preparation tool developed to help in the certification process for VITA/TCE volunteers. Select Practice Lab from the VITA/TCE Springboard. A universal password will be needed to access the Practice Lab. Your instructor, Site Coordinator, or other VITA/TCE volunteer contact will be able to provide you with the universal password. Once you access the Practice Lab, you will need to create an account if you do not already have one.

Using prior year software will not generate the correct answers for the 2024 test. When using the Practice Lab to prepare return preparation scenarios, check TaxSlayer’s blog to ensure all 2024 updates to calculations have been made.

When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. Use your city, state, and ZIP code when completing any of the forms, unless otherwise indicated. Any question posed by the software not addressed in the interview notes can be answered as you choose.

All taxpayer names, SSNs, EINs, and account numbers provided in the scenarios are fictitious.

Taking the Test

When taking the tests, you may encounter both mini-scenarios and tax preparation scenarios. The mini-scenarios do not require you to prepare a tax return. For each of these, read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios. This test is based on the tax law that was in effect when the publication was finalized. The answers for the test and retest are based on 2024 values for deductions, exemptions, tax, and credits. The most current draft copies of forms were used at the time this document was published. The tax preparation scenarios require you to complete a sample tax return. You can use the Practice Lab to prepare the sample returns. Answer the questions following the scenario.

Beginning Filing Season 2024, all volunteers must register and certify via Link & Learn Taxes. Go to the Link & Learn Taxes e-learning application at linklearncertification.com.

Online testing is fast and efficient; it provides test results immediately. Volunteers who do not pass the test the first time may review the course material and try again. Also, volunteers who prefer to take the certification test on paper utilizing Form 6744, VITA/TCE Volunteer Assistor’s Test or Retest, may continue to complete the test using this method but must transcribe their answers to the test in Link & Learn Taxes to meet the requirement for all volunteers to register and certify through Link & Learn Taxes.

Test Answer Sheet

The test scenarios on Link & Learn Taxes are the same as in this booklet. Read each question carefully before entering your answers online.

Mark your answers in the test booklet. Once you have taken and passed the necessary certifications, give your completed Form 13615, Volunteer Standards of Conduct Agreement to your instructor, Site Coordinator, or other VITA/TCE volunteer contact as directed. Do not submit your entire test booklet unless otherwise directed.

Certification Tests

Step 1: Volunteer Standards of Conduct. This test is for all volunteers, including volunteers who do not prepare returns. Estimated completion time: 1 hour. Minimum proficiency required: 8 out of 10 correct.

Step 2: Intake/Interview and Quality Review. This test is for all tax law certified volunteers, site coordinators, quality reviewers, and instructors. Estimated completion time: 20 minutes. Minimum proficiency required: 8 out of 10 correct.

Step 3: Tax Law and Coordinator Certifications. Volunteers may take one or more of the following certifications:

Federal Tax Law Update Test for Circular 230 Professionals. Limited to volunteers who are authorized under Circular 230 to practice before the IRS. These volunteers have a professional designation of attorney, Certified Public Accountant, and/or Enrolled Agent. Volunteers who complete this certification level can prepare any tax returns that fall within the scope of service of the VITA/TCE programs. Estimated completion time: 1 hour. Minimum proficiency required: 12 out of 15 correct.

Foreign Student. Estimated completion time: 2 hours. Minimum proficiency required: 40 out of 50 correct.

Site Coordinator. Estimated completion time: 1 hour. Minimum proficiency required: 12 out of 15 correct.

Basic. Recommended for, but not limited to, volunteers with 0-1 years of experience. Estimated completion time: 4 hours. Minimum proficiency required: 24 out of 30 correct.

Advanced. Recommended for, but not limited to, volunteers with two or more years of experience. Estimated completion time: 4 hours. Minimum proficiency required: 28 out of 35 correct.

Step 4: Optional Specialty Courses. Volunteers may take one or more of the following certifications:

Puerto Rico Level I. Requires Basic or Advanced certification. Estimated completion time: 2 hours. Minimum proficiency required: 12 out of 15 correct.

Puerto Rico Level II. Requires Puerto Rico Level I certification. Estimated completion time: 2 hours. Minimum proficiency required: 12 out of 15 correct.

Military. Requires Advanced certification. Estimated completion time: 1 hour. Minimum proficiency required: 12 out of 15 correct.

International. Requires Advanced certification. Estimated completion time: 1 hour. Minimum proficiency required: 12 out of 15 correct.

Over-the-Phone (OPI) Services. Requires Volunteer Standards of Conduct. Estimated completion time: 1 hour. Minimum proficiency required: 8 out of 10 correct.

Test Answer Sheet

Name ________________________________________________________

If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet.

Find the section heading that matches the test you are taking. Record your answers in the spaces, next to the question number in the left-hand column. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement.

Privacy Act Notice

The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301.

We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers.

Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs.

Test Answer Sheet

Name ________________________________________________________

If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet.

Find the section heading that matches the test you are taking. Record your answers in the spaces, next to the question number in the left-hand column. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement.

Privacy Act Notice

The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301.

We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers.

Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs.

Test Answer Sheet

Name ________________________________________________________

If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet.

Find the section heading that matches the test you are taking. Record your answers in the spaces, next to the question number in the left-hand column. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement.

Privacy Act Notice

The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301.

We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers.

Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs.

Test Answer Sheet

Name ________________________________________________________

If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet.

Find the section heading that matches the test you are taking. Record your answers in the spaces, next to the question number in the left-hand column. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement.

Privacy Act Notice

The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301.

We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers.

Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs.

Retest Answer Sheet

Name ________________________________________________________

If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet.

Find the section heading that matches the test you are taking. Record your answers in the spaces, next to the question number in the left-hand column. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement.

Privacy Act Notice

The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301.

We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers.

Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs.

Retest Answer Sheet

Name ________________________________________________________

If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet.

Find the section heading that matches the test you are taking. Record your answers in the spaces, next to the question number in the left-hand column. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement.

Privacy Act Notice

The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301.

We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers.

Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs.

Retest Answer Sheet

Name ________________________________________________________

If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet.

Find the section heading that matches the test you are taking. Record your answers in the spaces, next to the question number in the left-hand column. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement.

Privacy Act Notice

The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301.

We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers.

Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs.

Retest Answer Sheet

Name ________________________________________________________

If you are entering your test answers in Link & Learn Taxes, do not use this answer sheet.

Find the section heading that matches the test you are taking. Record your answers in the spaces, next to the question number in the left-hand column. Use this only if you are submitting the paper test to your instructor for grading. In that case, record all your answers on this tear-out page. Your instructor will tell you where to send your Test Answer Sheet for grading. Be sure to complete and sign Form 13615, Volunteer Standards of Conduct Agreement.

Privacy Act Notice

The Privacy Act of 1974 requires that when we ask for information we tell you our legal right to ask for the information, why we are asking for it, and how it will be used. We must also tell you what could happen if we do not receive it, and whether your response is voluntary, required to obtain a benefit, or mandatory. Our legal right to ask for information is 5 U.S.C. 301.

We are asking for this information to assist us in contacting you relative to your interest and/or participation in the IRS volunteer income tax preparation and outreach programs. The information you provide may be furnished to others who coordinate activities and staffing at volunteer return preparation sites or outreach activities. The information may also be used to establish effective controls, send correspondence and recognize volunteers.

Your response is voluntary. However, if you do not provide the requested information, the IRS may not be able to use your assistance in these programs.

Volunteer Standards of Conduct Test

It is important that all individuals who volunteer their time and services in the VITA/TCE program understand their roles and responsibilities under the program. All volunteers must:

Take the Volunteer Standards of Conduct (VSC) Training, at a minimum, the first year of volunteering with VITA/TCE program

Annually, pass the VSC/Ethics certification test with a score of 80% or higher; and

Sign and date Form 13615, Volunteer Standards of Conduct Agreement - VITA/TCE Programs, indicating they have successfully completed the certification test(s) and agree to adhere to the VSC

The VSC Test is an annual requirement. This certification test is available on Link & Learn Taxes. Volunteers who prefer to take the Certification Test on paper utilizing Form 6744, VITA/TCE Volunteer Assistor’s Test or Retest, may continue to complete the test using that method but must transcribe their answers to the test in LLT.

These Volunteer Standards of Conduct requirements are in addition to the tax law certification process (e.g., Basic, Advanced, Military, or International) for becoming a qualified volunteer to teach tax law, correct tax returns, conduct quality reviews, prepare tax returns, or address tax law related questions as a volunteer in the VITA/TCE program.

Use your training and reference tools to answer the questions. You must answer eight of the following ten questions correctly to pass the Volunteer Standards of Conduct Test.

Test Questions

Directions

Using your resource materials, answer the following questions:

1. Prior to working at a VITA/TCE site, ALL VITA/TCE volunteers (greeters, client facilitators, tax preparers, quality reviewers, etc.) must:

a. Annually pass the Volunteer Standards of Conduct (VSC) certification test with a score of 80% or higher.

b. Sign and date the Form 13615, Volunteer Standards of Conduct Agreement, agreeing to comply with the VSC by upholding the highest ethical standards.

c. Pass the Advanced tax law certification.

d. All of the above.

e. Both a and b

2. Can a volunteer be removed and barred from the VITA/TCE program for violating the Volunteer Standards of Conduct?

a. Yes

b. No

3. If a taxpayer offers you a $20 bill because they were so happy about the quality service they received, what is the appropriate action to take?

a. Take the $20 and thank the taxpayer for the tip.

b. Tell the taxpayer it would be better to have the $20 deposited directly into your bank account from his refund.

c. Thank the taxpayer, and explain that you cannot accept any payment for your services.

d. Refer the taxpayer to the tip jar located at the quality review and print station.

4. Jake is an IRS tax law-certified volunteer preparer at a VITA/TCE site. When preparing a return for Jill, Jake learns that Jill does not have a bank account to receive a direct deposit of her refund. Jill is distraught when Jake tells her the paper refund check will take three to four weeks longer than the refund being direct deposited. Jill asks Jake if he can deposit her refund in his bank account and then turn the money over to her when he gets it. What should Jake do?

a. Jake can offer to use his account to receive the direct deposit, and turn the money over to Jill once the refund is deposited.

b. Jake should explain that a taxpayer’s federal or state refund cannot be deposited into a VITA/TCE volunteer’s bank account and she will have to open an account in her own name to have the refund direct deposited.

c. Jake can suggest she borrow a bank account number from a friend because the taxpayer’s name does not need to be on the bank account.

5. Max prepares a tax return for Ali at a VITA/TCE site. He finds out during the interview that Ali has no health insurance. After Ali leaves the site, Max writes her name and contact information down to take home to his wife who sells health insurance for profit. Which of the following statements is true?

a. There is no violation to the Volunteer Standards of Conduct (VSC) unless Max’s wife makes a big commission on the sale of health insurance to Ali.

b. Max has violated the VSC because he is using the information he gained about Ali to further his own or another’s personal benefit.

c. Max is doing Ali a favor by using her personal information to secure business for his wife.

d. Information a taxpayer provides at a VITA/TCE site can be used for the volunteer’s personal gain.

6. Bob, an IRS tax law-certified volunteer preparer, told the taxpayer that cash income does not need to be reported because the IRS does not know about it. Bob indicated NO cash income on Form 13614-C. Bob prepared a tax return excluding the cash income. Jim, the designated quality reviewer, was unaware of the conversation and therefore unaware of the cash income and the return was printed, signed, and e-filed. Who violated the Volunteer Standards of Conduct?

a. Bob, the tax law-certified volunteer who prepared the return.

b. Jim, the designated quality reviewer who was unaware of the cash income when he reviewed the return.

c. Betty, the coordinator.

d. No one has violated the Volunteer Standards of Conduct.

7. Sue, a VITA/TCE coordinator, was watching the local news when she saw Aaron, a new tax law-certified volunteer, in a story about several bank employees being arrested for suspicion of embezzlement. She saw Aaron being led out of the bank in handcuffs. Three days later, Sue is shocked when she sees Aaron show up at the site ready to volunteer, apparently out on bond. She pulls Aaron aside and explains that his arrest on suspicion of embezzlement could have a negative effect on the site and therefore she must ask him to leave the site. Sue removed his access to the software, she then uses the external referral process to report the details to SPEC headquarters by sending an email to wi.voltax@irs.gov. Did Sue take appropriate actions as the coordinator?

a. Yes

b. No

8. Sam is assigned to prepare a taxpayer’s return. The taxpayer has been waiting for a long time due to the volume of taxpayers needing service. The taxpayer is agitated when they sit with Sam. How should Sam interact with the taxpayer?

a. Keep calm.

b. Create a peaceful and friendly atmosphere.

c. Remain professional and courteous.

d. All of the above.

9. VITA/TCE sites and volunteers must not solicit business from taxpayers or use taxpayer information for personal or business benefit.

a. True

b. False

10. Ben is preparing a tax return and the taxpayer has a dependent listed. The dependent is the child of the taxpayer’s cousin. The child lived with the taxpayer a few months. Ben prepared the return and indicated on Form 13614-C the child lived with the taxpayer all year. Did Ben violate the VSC?

a. Yes, Ben knowingly prepared the return with false information.

b. Yes, but the return was accepted so everything is fine.

c. No, the cousin gave permission.

d. No, the cousin wasn’t filing a return.

Volunteer Standards of Conduct Retest Questions

Directions

Using your resource materials, answer the following questions:

1. Which volunteers must pass the Volunteer Standards of Conduct (VSC) certification test?

a. Coordinators

b. Quality reviewers and tax return preparers

c. Greeters or client facilitators

d. All VITA/TCE site volunteers must pass the VSC certification test

2. Failure of a VITA/TCE volunteer to comply with the Volunteer Standards of Conduct could result in which of the following?

a. The volunteer’s removal from the VITA/TCE program.

b. The volunteer’s inclusion in the IRS Volunteer Registry to bar future VITA/TCE activity indefinitely.

c. Termination of the sponsoring organization’s partnership with the IRS.

d. All of the above may be considered an appropriate action depending on the type of violation and the sponsoring organization’s corrective actions.

3. Is having a donation/tip jar at the quality review station within the VITA/TCE site a violation of the Volunteer Standards of Conduct?

a. Yes

b. No

4. Maggie wants her tax refund quickly; however, she doesn’t have a bank account for direct deposit. She asks Josh, the tax law-certified preparer, to deposit her refund into his checking account and turn the funds over to her when received. If Josh agrees to do this, has he violated any of the Volunteer Standards of Conduct?

a. Yes

b. No

5. Pat is a paid tax preparer in the community; he also gives back to the community by serving as an IRS tax law-certified volunteer tax preparer at a VITA/TCE site. While conducting the interview with the taxpayer, Pat discovers the taxpayer’s small business will generate a loss, making the return out of scope for the VITA/TCE program. Pat explains to the taxpayer that the tax return cannot be prepared at the VITA/TCE site, but he will offer the taxpayer a discount at his paid tax preparation business down the road. Did Pat violate the Volunteer Standards of Conduct (VSC)?

a. Yes, it is a violation of the VSC for Pat to solicit business from any taxpayer at the VITA/TCE site.

b. No, it is not a violation since the return cannot be prepared at the site.

c. No, none of the VSC addresses soliciting business while volunteering at the VITA/TCE site.

6. Ann, an IRS tax law-certified tax preparer, told the taxpayer that cash income does not need to be reported because the IRS will never know about it. Ann indicated NO cash income on Form 13614-C. Ann prepared the return without the cash income. The designated quality reviewer was unaware of the conversation and therefore unaware of the cash income and the return was printed, signed, and e-filed. Did the designated quality reviewer violate the Volunteer Standards of Conduct?

a. Yes

b. No

7. Jan, a greeter, overheard an IRS tax law-certified volunteer, Jim, trying to sell insurance to a taxpayer he was helping. Jim is an insurance agent in the community. Jan feels like Jim was pushy, made the taxpayer uncomfortable, and violated Volunteer Standard of Conduct #3. What should Jan do?

a. Make an announcement to the taxpayers in the waiting room to ignore Jim if he tries to sell them insurance.

b. Tell the coordinator what she heard, so they can immediately remove Jim from the site and report the incident using the external referral process by sending an email to wi.voltax@irs.gov.

c. Mind her own business and do nothing.

8. VITA/TCE volunteers must remain professional and courteous when working with taxpayers.

a. True

b. False

9. During tax preparation the volunteer notices the taxpayer’s type of income is out of VITA/TCE scope per Publication 4012. The volunteer refers the taxpayer to their sister’s tax preparation services. Was a VSC violated?

a. No, the taxpayer asked for help in finding a tax preparer.

b. Yes, the volunteer cannot recommend a specific person or company’s services.

c. No, the volunteer is helping promote a family business.

d. No, the volunteer is helping the taxpayer get the service they need.

10. A volunteer prepared a return that contains fraudulent Earned Income Credit (EIC) to help a family member who is financially struggling. The volunteer did not violate the VSC.

a. True

b. False

Volunteer Standards of Conduct Agreement

Intake / Interview and Quality Review Test Questions

Directions

Review the Intake/Interview and Quality Review training and answer the following questions.

1. All IRS-certified volunteer preparers participating in the VITA/TCE programs must use Form 13614-C or Form 13614-NR along with a thorough interview for every return prepared at the site.

a. True

b. False

2. What must the certified volunteer preparer do with Form 13614-C before starting the tax return?

a. Verify each of the taxpayer’s responses on Form 13614-C.

b. For any box left unchecked, write “No”, “N/A” or leave a check mark in the Notes/Comments section to indicate an item does not apply based on a conversation with the taxpayer.

c. Determine the certification level required to complete the return.

d. All the above.

3. The Basic certification level is required to prepare a return with unreported tip income.

a. True

b. False

4. A date must be entered on Form 13614-C, Page 1, to determine the appropriate filing status for taxpayers who are:

a. Divorced

b. Legally separated

c. Widowed

d. All the above

5. VITA/TCE volunteers use Publication 4299, Privacy, Confidentiality, and Civil Rights - A Public Trust, to determine if a return is within scope.

a. True

b. False

6. VITA/TCE sites are required to conduct quality reviews:

a. For all returns prepared by volunteers who have less than two years of experience preparing returns.

b. For every return prepared at the site.

c. Only when there is a quality reviewer available.

d. For all returns prepared by volunteers with certification levels below Advanced, Military, or International.

7. In most cases a volunteer must review photo identification for every taxpayer(s) to prevent the possibility of identity theft.

a. True

b. False

8. When does the taxpayer sign the tax return?

a. Before quality review and before being advised of their responsibility for the accuracy of the information on the return.

b. Before quality review and after being advised of their responsibility for the accuracy of the information on the return.

c. After quality review and before being advised of their responsibility for the accuracy of the information on the return.

d. After quality review and after being advised of their responsibility for the accuracy of the information on the return.

9. The site is busy with many taxpayers waiting for assistance. All volunteers are busy preparing tax returns. Can you quality review the return you just prepared instead of waiting for someone else to quality review the return?

a. Yes, if it is a returning taxpayer.

b. Yes, with approval of the site coordinator.

c. No, self-review is never an acceptable quality review method.

d. No, unless you are certified at the Advanced level.

10. Which of the following is true?

a. Quality review can be conducted by a volunteer preparer certified at Basic when the tax return required an Advanced certification to prepare.

b. Quality review is conducted after the taxpayer signs the tax return.

c. Quality review is an effective tool for preparing an accurate tax return.

d. Taxpayers do not need to be involved in the quality review process.

Intake / Interview and Quality Review Retest Questions

Directions

Review the Intake/Interview and Quality Review training and answer the following questions.

1. What form must be used by VITA/TCE volunteers when performing a thorough interview with a taxpayer?

a. Form 13614-C, Intake/Interview and Quality Review Sheet.

b. Form 13614-NR, Nonresident Alien Intake and Interview Sheet.

c. Form 13615, Volunteer Standards of Conduct Agreement - VITA/TCE Programs.

d. Either a or b.

2. The certified volunteer preparer must verify the return is within their certification level as part of the Intake/Interview process.

a. True

b. False

3. The taxpayer checked the Tips box on Page 2 of Form 13614-C. The tips are reported on Form W-2. What certification level is needed to prepare the tax return?

a. Basic

b. Advanced

c. Military

d. International

4. The taxpayer marked the “Widowed” box on Form 13614-C, Page 1, but left the “Year of spouse’s death” field blank. The “year of spouse’s death” is needed.

a. True

b. False

5. Which IRS publication would a volunteer use to determine if a topic is out of scope for VITA/TCE?

a. Publication 5166, VITA/TCE Volunteer Quality Site Requirements

b. Publication 5683, VITA/TCE Handbook for Partners and Site Coordinators

c. Publication 4012, VITA/TCE Volunteer Resource Guide

d. Publication 4299, Privacy, Confidentiality, and Civil Rights - A Public Trust

6. VITA/TCE sites are required to conduct quality reviews of every return prepared at the site.

a. True

b. False

7. What information must a volunteer review to prevent the possibility of identity theft?

a. Form W-2

b. Photo identification

c. Last year’s tax return

d. Medicaid card

8. The taxpayer signs the tax return after quality review and after being advised of their responsibility for the accuracy of the information on the return.

a. True

b. False

9. You can quality review a tax return you just prepared instead of waiting for someone else to quality review the return.

a. True

b. False

10. Which of the following four critical processes for quality review is not correct:

a. Engaging the taxpayer in the review process.

b. Using Google as a main reference for tax law determinations.

c. Using the Quality Review Checklist located in Publication 4012 as a guide while conducting the quality review.

d. Comparing source documents provided by the taxpayer.

Site Coordinator Test Questions

Directions

Review the Site Coordinator training and answer the following questions.

1. The Site Coordinator Test is optional for the designated coordinator and alternate coordinators.

a. True

b. False

2. Which IRS publication includes the roles and responsibilities of the site coordinator?

a. Publication 5166, VITA/TCE Volunteer Quality Site Requirements

b. Publication 5683, VITA/TCE Handbook for Partners and Site Coordinators

c. Publication 4299, Privacy, Confidentiality and Civil Rights - A Public Trust

d. Publication 4012, VITA/TCE Volunteer Resource Guide

3. Prior to signing and dating the Form 13615, Volunteer Standards of Conduct Agreement – VITA/TCE Programs, the sponsoring partner’s approving official must confirm volunteer’s identity, name and address using government-issued photo identification and the required certification level of the volunteer.

a. True

b. False

4. If partner-owned computers or IRS-loaned computers or printers are lost or stolen, the partner is required to notify the local SPEC territory office _____.

a. Before May 15

b. Within 30 days or as soon as possible

c. Immediately or by the next business day

d. Before the end of the calendar year

5. According to QSR #4 Reference Materials, all sites are required to have the following available for use at VITA/TCE sites in paper or electronic format:

Publication 17, Your Federal Income Tax (For Individuals)

Publication 4012, VITA/TCE Volunteer Resource Guide

Publication 4299, Privacy, Confidentiality and Civil Rights - A Public Trust

Volunteer Tax Alerts (VTA) and Quality Site Requirement Alerts (QSRA).

a. True

b. False

6. Coordinators are required to have a correct Quality Review process for 100% of the returns prepared at VITA/TCE sites. The two acceptable methods of quality review are:

a. Self-Review and Peer-to-Peer Review

b. Peer-to-Peer Review and Designated Review

c. Designated Review and Self-Review

d. Taxpayer Review and Designated Review

7. All questions and answers on pages 1 through 3 of the Form 13614-C, Intake/Interview and Quality Review Sheet must be confirmed with the taxpayer and notated.

a. True

b. False

8. It is acceptable to use IRS-loaned equipment (including laptops and printers) outside of the scope of the VITA/TCE program, such as for personal use after site hours.

a. True

b. False

9. Which of the following is not a qualifying certification to earn Continuing Education Credits?

a. Military

b. Advanced

c. Federal Tax Law Update Test for Circular 230 Professionals

d. International

10. Prior to opening every year, each site must have Form 15272, VITA/TCE Security Plan, approved, signed, and maintained at ________.

a. The territory office

b. The VITA/TCE site

c. The partner office

d. SPEC headquarter’s office

11. Which IRS publication covers requirements for alternative filing methods including virtual or not in-person tax preparation processes?

a. Publication 5166, VITA/TCE Volunteer Quality Site Requirements

b. Publication 4012, VITA/TCE Volunteer Resource Guide

c. Publication 4961, VITA/TCE Volunteer Standards of Conduct - Ethics Training

d. Publication 5450, VITA/TCE Site Operations

12. At a minimum, all Wi-Fi or wireless connections at a VITA/TCE tax preparation site must be encrypted and password protected.

a. True

b. False

13. When conducting taxpayer interviews in close proximity, it is important to limit unauthorized access to taxpayer information and ensure privacy (for example, positioning computer screens, protecting taxpayer documents and preventing others from hearing sensitive information).

a. True

b. False

14. Once a volunteer is added to the Volunteer Registry, how long are they removed from volunteering in VITA/TCE program?

a. For a month

b. Indefinitely

c. For a filing season

d. For a year

15. A VITA/TCE data breach occurs when a taxpayer’s personally identifiable information (PII) is shared, used or disclosed, whether physical or electronic, without taxpayer permission.

a. True

b. False

Site Coordinator Certification Retest Questions

Directions

Review the Site Coordinator training and answer the following questions.

1. Coordinators and alternate coordinators are required to pass with a score of 80% or higher:

a. Volunteer Standards of Conduct Test

b. Site Coordinator Test

c. Both a and b

d. None of the above

2. Publication 5166, VITA/TCE Volunteer Quality Site Requirements, is the primary IRS resource for coordinator roles and responsibilities.

a. True

b. False

3. Form 13615, Volunteer Standards of Conduct Agreement – VITA/TCE Programs is not valid until the sponsoring partner’s approving official signs and dates the form after confirming the volunteer’s______________.

a. Identity, name and address using government issued photo identification

b. Certification levels on Form 13615, Volunteer Standards of Conduct Agreement - VITA/TCE Programs

c. Both a and b

d. None of the above

4. Partner-owned computers or IRS-loaned computers and printers that are lost or stolen, must be reported to the local SPEC territory office before May 15.

a. True

b. False

5. According to QSR #4 Reference Materials, VITA/TCE Volunteer Tax Alerts and Quality Site Requirement Alerts are required to be available for use at each site. What other reference materials are required?

a. Pub 4012, VITA/TCE Volunteer Resource Guide and Pub 17, Your Federal Income Tax (For Individuals)

b. Pub 5683, VITA/TCE Handbook for Partners and Site Coordinators and Pub 5166, VITA/TCE Volunteer Quality Site Requirements

c. Pub 4299, Privacy, Confidentiality and Civil Rights - A Public Trust

d. Both a and c

6. The acceptable types of quality review at VITA/TCE sites are: Designated Review, Peer-to-Peer Review, and Self-Review.

a. True

b. False

7. All questions on pages 1 through 3 of Form 13614-C, Intake/Interview and Quality Review Sheet must be:

a. Confirmed with the taxpayer

b. Verified for certification level

c. Addressed and notated on Form 13614-C

d. All of the above

8. The use of IRS-loaned equipment (including laptops and printers) is restricted to the preparation and filing of electronic tax returns and related program activities that support the VITA/TCE free tax preparation program. IRS-loaned equipment may not be used for commercial purposes, games, or other personal use.

a. True

b. False

9. The Federal Tax Law Update Test for Circular 230 Professionals Test is a qualifying certification for receiving Continuing Education Credits.

a. True

b. False

10. Form 15272, VITA/TCE Security Plan, must be approved annually by the local SPEC territory office and maintained at the VITA/TCE site.

a. True

b. False

11. Publication 5450, VITA/TCE Site Operations, covers requirements for alternative filing methods including virtual or not in-person tax preparation processes.

a. True

b. False

12. IRS sponsored free tax preparation sites must use the following Wi-Fi or wireless connection:

a. Public access Wi-Fi or wireless connection

b. Encrypted and password protected Wi-Fi or wireless connection

c. Unsecured wired internet connection

d. Volunteer’s unsecured wireless Hotspot connection

13. Volunteers must ensure that taxpayer privacy is protected when sharing personally identifiable information (PII). During conversations with taxpayers in close proximity,______ should not be discussed in a manner that could be overheard by someone else.

a. SSNs

b. Addresses

c. Bank account numbers

d. All of the above

14. Volunteers who violate the Volunteer Standards of Conduct or commit certain unethical actions, may be added to the Volunteer Registry and removed from the VITA/TCE program for a period of one year.

a. True

b. False

15. What are examples of potential security breaches that would need to be referred to the local SPEC territory office?

a. Loss of computer containing personally identifiable information (PII)

b. Loss of computer bag containing tax returns

c. Loss of taxpayer information

d. All of the above

Basic Course Scenarios and Test Questions

Directions

The first six scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios.

Basic Scenario 1: Bradley Cushion

Interview Notes

Bradley is 39 years old and has never been married.

Chris, age 14, is Bradley’s brother who lived with him all year. Bradley provided all of Chris’s support and provided over half the cost of keeping up the home.

Bradley earned $48,000 in wages.

Bradley is blind and cannot be claimed as a dependent by another taxpayer.

Bradley and Chris are U.S. citizens, have valid Social Security numbers, and lived in the U.S. the entire year.

Basic Scenario 1: Test Questions

1. What is the most advantageous filing status allowable that Bradley can claim on his tax return for 2024?

a. Single

b. Head of Household

c. Qualifying Surviving Spouse (QSS)

d. Married Filing Jointly

2. Bradley can claim a higher standard deduction because he is blind.

a. True

b. False

Basic Scenario 2: David and Ellen Farmer

Interview Notes

David, age 31, and Ellen, age 30, are married and will file a joint return.

They cannot be claimed as dependents by any other taxpayer.

David and Ellen have no children or other dependents.

David and Ellen both work and are not full-time students. David earned wages of $12,000 and Ellen earned wages of $4,000.

David and Ellen are U.S. citizens and have valid Social Security numbers.

David and Ellen have investment income of $300 in taxable interest.

Basic Scenario 2: Test Questions

3. David and Ellen are eligible to claim the Earned Income Tax Credit (EITC).

a. True

b. False

4. David and Ellen’s $300 of interest counts as earned income for the Earned Income Tax Credit.

a. True

b. False

Basic Scenario 3: Felix and Gabriela Garcia

Interview Notes

Felix and Gabriela Garcia are married and always file Married Filing Jointly.

Felix earned $26,000 in wages and Gabriela earned $8,500 in wages.

The Garcias paid all the cost of keeping up a home and provided all the support for their two children, Helena and Juan, who lived with them all year.

Helena is 12 years old and Juan is 16.

Felix, Gabriela, Helena, and Juan are all U.S. citizens with valid Social Security numbers and lived in the U.S. the entire year.

Basic Scenario 3: Test Questions

5. Which child qualifies the Garcias for the Child Tax Credit (CTC)?

a. Helena

b. Juan

c. Helena and Juan

d. Neither

6. The Garcias can claim a maximum refundable Additional Child Tax Credit of $____________.
(Note: whole number only, do not use special characters.)

Basic Scenario 4: Kevin and Ella Henderson

Interview Notes

Kevin and Ella are married and will file a joint return.

Ella is a U.S. citizen with a valid Social Security number. Kevin is a resident alien with an Individual Taxpayer Identification Number (ITIN).

Ella worked in 2024 and earned wages of $38,500. Kevin worked part-time and earned wages of $22,000.

The Hendersons have two children: Lewis, age 11, and Tami, age 19.

The Hendersons provided the total support for their two children, who lived with them in the U.S. all year. Lewis and Tami are U.S. citizens and have valid Social Security numbers.

Basic Scenario 4: Test Questions

7. The Hendersons qualify for the Credit for Other Dependents.

a. True

b. False

8. The Hendersons qualify for the Earned Income Tax Credit even though Kevin has an ITIN.

a. True

b. False

Basic Scenario 5: Kendall Holmes

Interview Notes

Kendall is single and 63 years old.

Kendall worked as a cook at the local elementary school and earned wages of $9,250.

Kendall cannot be claimed as a dependent by another taxpayer.

Kendall is a U.S. citizen with a valid Social Security number and lived in the United States the entire year.

Basic Scenario 5: Test Questions

9. Kendall qualifies to claim the Earned Income Tax Credit.

a. True

b. False

10. Which of the following statements is true:

a. Kendall’s gross income was less than the gross income limit required to file a federal income tax return.

b. Kendall’s interest income of $100 requires her to file a federal income tax return.

c. Kendall should file a federal income tax return to receive the refundable Earned Income Tax Credit.

d. Both a and c.

Basic Scenario 6: Matt Urban

Interview Notes

Matt Urban is single, 24 years old, and has never been married.

Matt earned wages of $27,500 during the first half of the year. Matt lost his job in September and received a total of $8,000 in unemployment compensation.

Matt is a barber and took a class at a local barber institute to maintain his license. He paid the cost of tuition and a course-related book. His qualified education expenses were $3,000.

Matt also paid student loan interest for the courses he previously took to earn his Bachelor’s degree. For 2024, he paid student loan interest of $900.

Matt does not have any dependents.

Matt is a U.S. citizen with a valid Social Security number.

Basic Scenario 6: Test Questions

11. Matt’s unemployment compensation is taxable and must be included on his 2024 tax return.

a. True

b. False

12. Matt is eligible for the following credit:

a. Earned Income Credit

b. Lifetime Learning Credit

c. American Opportunity Credit

d. None of the above

13. The amount of student loan interest Matt can claim as an adjustment to income is $_________.
(Note: whole number only, do not use special characters.)

Basic Scenario 7: Paul and Lisa Alexander

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

Paul, age 70, and Lisa, age 63, elect to file Married Filing Jointly. Neither taxpayer is blind.

Paul is retired. He received Social Security benefits and a pension.

Paul and Lisa’s daughter Teresa, age 21, is a full-time college student in her fourth year of study. Teresa is graduating this year with a degree in accounting and does not have a felony drug conviction. She received a Form 1098-T for 2024. Box 7 was not checked on her Form 1098-T for the previous tax year.

Teresa spent the summer at home with her parents but lived in an apartment near campus during the school year.

Teresa received a scholarship that paid the full tuition. Paul and Lisa paid the cost of course-related books in 2024 not covered by scholarship. They paid $150 for a parking pass, $6,000 for a meal plan, $950 for textbooks purchased at the college bookstore, and $300 for access to an online textbook.

Paul and Lisa paid more than half the cost of maintaining a home and support for Teresa.

Paul and Lisa do not have enough deductions to itemize on their federal tax return.

Paul, Lisa, and Teresa are U.S. citizens and have valid Social Security numbers. They all lived in the United States for the entire year.

If Paul and Lisa receive a refund, they would like to deposit it into their checking account. Documents from Community Bank show that the routing number is 111000025. Their checking account number is 11337890.

Form 13614-C, Page 1

Form 13614-C, Page 2

Form 13641-C, Page 3

Form W-2

Forms 1099-R & SSA 1099

Forms 1099-DIV & 1098-T

Receipts

Basic Scenario 7: Test Questions

14. Paul and Lisa’s standard deduction amount is $30,750.

a. True

b. False

15. Paul and Lisa’s total qualified education expenses used to calculate the American Opportunity Credit is:

a. $300

b. $950

c. $1,250

d. $11,250

16. Paul and Lisa Alexander can claim the Credit for Other Dependents.

a. True

b. False

17. What is the total amount of the Alexander’s federal income tax withholding?

a. $1,900

b. $2,500

c. $3,760

d. $4,660

18. The taxable amount of Paul’s Social Security is $13,175.00.

a. True

b. False

19. Which of the following statements are true?

a. Qualified dividends are part of the total ordinary dividends.

b. Qualified dividends qualify for lower, long-term capital gains tax rates.

c. Qualified dividends are reported on Form 1099-DIV.

d. All of the above.

Basic Scenario 8: Amy Yager

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

Amy is single and 48 years old.

Amy has two children. Wendy, age 20, has a job and earned wages of $3,700. Kyle, age 27, is totally and permanently disabled and received Social Security benefits of $5,500. Both children lived with her all year.

Amy paid all the cost of keeping up the home and more than half the support for her children.

Amy received disability pension benefits, but she has not reached the minimum retirement age of her employer’s plan.

She does not have enough expenses to itemize for the 2024 tax year.

Amy, Wendy, and Kyle are U.S. citizens and have valid Social Security numbers. They all lived in the United States for the entire year.

If she has any balance due or refund, she would like to use New Bank and Trust. Amy provided a voided check.

Form 13614-C, Page 1

Form 13614-C, Page 2

Form 13614-C, Page 3

Form 1099-R & Voided Check

Basic Scenario 8: Test Questions

20. Amy’s disability pension is reported as earned income wages.

a. True

b. False

21. The most advantageous filing status that Amy can claim is?

a. Single

b. Married Filing Separately

c. Head of Household

d. Qualifying Surviving Spouse (QSS)

22. Which of Amy’s children qualifies her to claim the Earned Income Tax Credit?

a. Wendy

b. Kyle

c. Both Wendy and Kyle

d. Neither Wendy nor Kyle

23. Can Amy claim Wendy as a dependent?

a. Yes, because Wendy meets the qualifying relative test.

b. Yes, because Amy provided more than half of Wendy’s total support.

c. Yes, because Wendy’s gross income is less than $5,050.

d. All of the above.

24. Amy anticipates a balance due for next year. What actions should she take to prevent having a balance due?

a. Submit a revised W-4P to increase her withholding

b. Make estimated tax payments

c. Do nothing and file her return as usual

d. Both a and b

Basic Scenario 9: Irene Sanders

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

Irene is 33 years old and was married to Joel. Joel passed away on March 15, 2022. Irene has not remarried.

Irene’s 10-year-old daughter, Penny, lived with her the entire year.

Irene paid more than half the cost of keeping up a home and support for Penny.

Irene took a distribution from her traditional IRA in June to pay for her family vacation.

Irene was a full-time elementary school art teacher and earned $47,500 in wages. Irene purchased art supplies for her class out of her own pocket totaling $350.

Irene received a 1099-E for student loan interest she paid in 2024.

Irene received a W-2G in the amount of $3,600 from the local casino.

Irene paid child and dependent care expenses for Penny while she worked.

Irene and Penny are U.S. citizens and have valid Social Security numbers. They lived in the United States for the entire year.

If Irene is entitled to a refund, she would like to deposit half into her checking account and half into her savings account. Documents from Adelphi Bank and Trust show that the routing number for both accounts is 111000025. Irene’s checking account number is 123456789 and her savings account number is 987654321.

Form 13614-C, Page 1

Form 13614-C, Page 2

Form 13614-C, Page 3

Forms W-2 & W-2G

Forms 1099-R & 1098-E

Daycare Statement & Voided Check

Basic Scenario 9: Test Questions

25. Irene is required to report her gambling winnings on her return.

a. True

b. False

26. Irene’s most advantageous filing status is:

a. Head of Household

b. Married Filing Jointly

c. Married Filing Separately

d. Qualifying Surviving Spouse (QSS)

27. Irene is not required to pay an additional 10% tax on the early distribution from her IRA.

a. True

b. False

28. Irene qualifies for which of the following credits?

a. Child Tax Credit

b. Child and Dependent Care Credit

c. Both a and b

d. Neither a nor b

29. Irene should use Form _________ to split her refund between her savings and checking accounts.

30. What amount can Irene claim as an adjustment to income for the supplies she purchased out of pocket?

a. $0

b. $300

c. $325

d. $350

Basic Course Retest Questions

Directions

The first five scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios.

Retest Basic Scenario 1: Bradley Cushion

Interview Notes

Bradley is 39 years old and has never been married.

Chris, age 14, is Bradley’s brother who lived with him all year. Bradley provided all of Chris’s support and provided over half the cost of keeping up the home.

Bradley earned $48,000 in wages.

Bradley is blind and cannot be claimed as a dependent by another taxpayer.

Bradley and Chris are U.S. citizens, have valid Social Security numbers, and lived in the U.S. the entire year

Basic Scenario 1: Retest Questions

1. Bradley’s most advantageous filing status for 2024 is Single.

a. True

b. False

2. What is the amount of Bradley’s standard deduction?

a. $0

b. $14,600

c. $21,900

d. $23,850

Retest Basic Scenario 2: David and Ellen Farmer

Interview Notes

David, age 31, and Ellen, age 30, are married and will file a joint return.

They cannot be claimed as dependents by any other taxpayer.

David and Ellen have no children or other dependents.

David and Ellen both work and are not full-time students. David earned wages of $12,000 and Ellen earned wages of $4,000.

David and Ellen are U.S. citizens and have valid Social Security numbers.

David and Ellen have investment income of $300 in taxable interest.

Basic Scenario 2: Retest Questions

3. David and Ellen are eligible to claim the Earned Income Tax Credit (EITC) without a qualifying child.

a. True

b. False

4. David and Ellen can claim the Earned Income Tax Credit because their investment income (taxable interest) is less than $11,600.

a. True

b. False

Retest Basic Scenario 3: Felix and Gabriela Garcia

Interview Notes

Felix and Gabriela Garcia are married and always file Married Filing Jointly.

Felix earned $26,000 in wages and Gabriela earned $8,500 in wages.

The Garcias paid all the cost of keeping up a home and provided all the support for their two children, Helena and Juan, who lived with them all year.

Helena is 12 years old and Juan is 16.

Felix, Gabriela, Helena, and Juan are all U.S. citizens with valid Social Security numbers and lived in the U.S. the entire year.

Basic Scenario 3: Retest Questions

5. The Garcias qualify for the Child Tax Credit (CTC).

a. True

b. False

6. The refundable Additional Child Tax Credit is limited to $1,700 per child.

a. True

b. False

Retest Basic Scenario 4: Kevin and Ella Henderson

Interview Notes

Kevin and Ella are married and will file a joint return.

Ella is a U.S. citizen with a valid Social Security number. Kevin is a resident alien with an Individual Taxpayer Identification Number (ITIN).

Ella worked in 2024 and earned wages of $38,500. Kevin worked part-time and earned wages of $22,000.

The Hendersons have two children: Lewis, age 11, and Tami, age 19.

The Hendersons provided the total support for their two children, who lived with them in the U.S. all year. Lewis and Tami are U.S. citizens and have valid Social Security numbers.

Basic Scenario 4: Retest Questions

7. Tami qualifies the Hendersons for the Credit for Other Dependents.

a. True

b. False

8. Kevin has an ITIN, therefore the Hendersons cannot claim the Earned Income Tax Credit.

a. True

b. False

Retest Basic Scenario 5: Kendall Holmes

Interview Notes

Kendall is single and 63 years old.

Kendall worked as a cook at the local elementary school and earned wages of $9,250.

Kendall cannot be claimed as a dependent by another taxpayer.

Kendall is a U.S. citizen with a valid Social Security number and lived in the United States the entire year.

Basic Scenario 5: Retest Questions

9. Kendall does not qualify for the Earned Income Tax Credit because she does not have any earned income.

a. True

b. False

10. Kendall’s gross income of $9,250 does not require her to file a federal income tax return.

a. True

b. False

Retest Basic Scenario 6: Matt Urban

Interview Notes

Matt Urban is single, 24 years old, and has never been married.

Matt earned wages of $27,500 during the first half of the year. Matt lost his job in September and received a total of $8,000 in unemployment compensation.

Matt is a barber and took a class at a local barber institute to maintain his license. He paid the cost of tuition and a course-related book. His qualified education expenses were $3,000.

Matt also paid student loan interest for the courses he previously took to earn his Bachelor’s degree. For 2024, he paid student loan interest of $900.

Matt does not have any dependents.

Matt is a U.S. citizen with a valid Social Security number.

Basic Scenario 6: Retest Questions

11. What is the taxable amount of Matt’s unemployment compensation?

a. $0

b. $900

c. $3,000

d. $8,000

12. The class Matt took at his local barber institute qualifies him to claim the Lifetime Learning Credit.

a. True

b. False

13. Matt can deduct $2,500 of student loan interest as an adjustment to his income.

a. True

b. False

Basic Scenario 7: Retest Questions

Directions

Refer to the scenario information for Paul and Lisa Alexander.

14. Paul and Lisa’s standard deduction is:

a. $14,600

b. $21,900

c. $29,200

d. $30,750

15. Paul and Lisa can claim $1,250 of qualified education expenses to calculate the American Opportunity Credit.

a. True

b. False

16. Paul and Lisa can claim the Credit for Other Dependents for Teresa.

a. True

b. False

17. The Alexander’s total amount of federal income tax withholding for 2024 is $_____________.
(Note: whole number only, do not use special characters.)

18. How much of Paul’s Social Security is taxable income?

a. $0

b. $11,675

c. $13,175

d. $15,500

19. Qualified dividends are reported on Form 1099-DIV.

a. True

b. False

Basic Scenario 8: Retest Questions

Directions

Refer to the scenario information for Amy Yager.

20. Amy’s disability pension is reported as earned income wages until she reaches the minimum retirement age for her employer.

a. True

b. False

21. Amy is eligible to claim Head of Household on her tax return.

a. True

b. False

22. Wendy qualifies Amy for the Earned Income Tax Credit (EITC).

a. True

b. False

23. Who qualifies as Amy’s qualifying relative?

a. Wendy

b. Kyle

c. Both Wendy and Kyle

d. Neither Wendy or Kyle

24. Amy can prevent having a balance due next year by adjusting her withholding if necessary.

a. True

b. False

Basic Scenario 9: Retest Questions

Directions

Refer to the scenario information for Irene Sanders.

25. Irene must report $_________ of her gambling winnings on her 2024 return.
(Note: whole number only, do not use special characters.)

26. Irene’s most advantageous filing status is Qualifying Surviving Spouse (QSS).

a. True

b. False

27. Irene must pay an additional_______ tax on the early distribution from her IRA.

a. 0%

b. 5%

c. 10%

d. 15%

28. Irene is not eligible to claim Penny for the Child Tax Credit.

a. True

b. False

29. Irene can split her refund between her savings and checking accounts by completing Form 8888, Allocation of Refund.

a. True

b. False

30. Irene can claim $350 as an adjustment to income for classroom supplies she purchased.

a. True

b. False

Advanced Course Scenarios and Test Questions

Directions

The first six scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios.

For fill in the blank questions: Round to the nearest whole number, do not use special characters: dollar sign ($), comma (,), or period(.)

Advanced Scenario 1: Sharon Smith

Interview Notes

Sharon’s husband, Daniel, moved out of their home in February of 2022. Sharon has had no contact with Daniel since he moved out. Sharon and Daniel are not legally separated.

Sharon has one child, Lea, age 10. She will claim Lea as a dependent on her 2024 tax return.

Sharon is 31 years old.

Sharon earned $44,500 in wages and received $50 of interest. Sharon had lottery winnings of $2,000 reported on Form W-2G.

Sharon paid all the costs of keeping up her home. She provided over half of the support for Lea.

They all are U.S. citizens and have valid Social Security numbers. They lived in the U.S. all year.

Advanced Scenario 1: Test Questions

1. Sharon qualifies for Head of Household filing status.

a. True

b. False

2. Who qualifies to claim the Earned Income Credit (EIC) also known as Earned Income Tax Credit (EITC) for Lea?

a. Sharon

b. Daniel

c. Both Sharon and Daniel

d. Neither Sharon nor Daniel

3. Sharon is required to report her lottery winnings as income on her federal tax return.

a. True

b. False

Advanced Scenario 2: Jeff and Jane Spring

Interview Notes

Jeff and Jane are married and want to file a joint return.

Jeff is a U.S. citizen and has a valid Social Security number. Jane is a resident alien and has an ITIN. They resided in the United States all year with their children.

Jeff and Jane have two children, Joan, age 7, and Jim, age 15. Joan and Jim are U.S. citizens and have valid Social Security numbers.

Jeff earned $23,000 in wages.

Jane earned $21,000 in wages.

In order to work, the Springs paid $2,000 to their son, Jim, to care for Joan after school.

Jeff and Jane provided all of the support for their two children.

Advanced Scenario 2: Test Questions

4. What is the maximum amount Jeff and Jane are eligible to claim for the Child Tax Credit (CTC)

a. $6,000

b. $4,000

c. $3,000

d. $2,000

5. The Springs qualify for the Child and Dependent Care Credit

a. True

b. False

Advanced Scenario 3: Mary Wood

Interview Notes

Mary Wood, age 58, is single.

Mary earned wages of $51,000 and was enrolled the entire year in a high deductible health plan (HDHP) with self-only coverage.

During the year, Mary contributed $2,000 to her Health Savings Account (HSA) and her mother also contributed $1,000 to Mary’s HSA.

Mary’s Form W-2 shows $1,150 in Box 12 with code W. She has Form 5498-SA showing $4,150 in Box 2.

Mary has Form 1099-SA showing her HSA distributions. She used her distributions to pay the following unreimbursed expenses:

$500 for nine visits to a physical therapist after her knee surgery

$1,000 unreimbursed doctor bills

$280 prescription medicine

$1,500 replacement of a crown

$300 deep cleaning for teeth

$40 over the counter medication

$260 gym membership (for her general health and fitness)

Mary is a U.S. citizen with a valid Social Security number.

Advanced Scenario 3: Test Questions

6. Mary is eligible to contribute an additional $__________ to her HSA because she is age 55 or older.

a. $0

b. $850

c. $1,000

d. $2,000

7. Form 8889, Part I is used to report HSA contributions made by _______________.

a. Mary

b. Mary’s employer

c. Mary’s mother

d. All of the above

8. What is the total unreimbursed qualified medical expenses reported on Form 8889, Part II?

a. $3,860

b. $3,620

c. $3,580

d. $3,320

Advanced Scenario 4: Cheryl Brown

Interview Notes

Cheryl, age 62, is single. She owns her home and provided all the costs of keeping up her home for the entire year. Her only income for 2024 was $48,700 in W-2 wages.

Cindy, age 24, and her daughter Cary, age 5, have lived with Cindy’s mother, Cheryl, since Cindy separated from her spouse in April of 2023. Cindy’s only income for 2024 was $24,000 in wages. Cindy provided over half of her own support. Cary did not provide more than half of her own support.

Cindy will not file a joint return with her spouse.

All individuals in the household are U.S. citizens with valid Social Security numbers. No one has a disability. They lived in the United States all year.

Advanced Scenario 4: Test Questions

9. For the purpose of determining dependency, Cary could be the qualifying child of _______________.

a. Only Cheryl

b. Only Cindy

c. Either Cheryl or Cindy

d. Neither Cheryl nor Cindy

10. Which of the following statements is true?

a. Cindy is not eligible to claim Cary for the EIC because her filing status is married filing separate.

b. Cindy is not eligible to claim the EIC for Cary because she is under age 25.

c. Cindy is not eligible to claim Cary for the EIC because her income is too high.

d. None of the above statements is true.

Advanced Scenario 5: Elizabeth Greene

Interview Notes

Elizabeth is 54 years old and files as single.

Her 2024 adjusted gross income (AGI) is $52,000, which includes gambling winnings of $2,000.

Elizabeth would like to itemize her deductions on Form 1040 Schedule A this year.

Elizabeth brings documents for the following items:

$9,500 hospital and doctor bills

$600 contributions to Health Savings Account (HSA)

$3,600 state withholding (higher than Elizabeth’s calculated state sales tax deduction)

$300 personal property taxes based on the value of the vehicle

$600 friend’s personal GoFundMe campaign

$350 cash contributions to the Red Cross

$200 fair market value of clothing (in good used condition) donated to the Salvation Army (Elizabeth purchased the clothing for $900)

$7,300 mortgage interest

$2,300 real estate tax

$1,500 homeowners association fees

$4,000 gambling losses

Advanced Scenario 5: Test Questions

11. Elizabeth can claim the $1,500 homeowners association fees as a deduction on her Form 1040, Schedule A.

a. True

b. False

12. What amount of gambling losses is Elizabeth eligible to claim as a deduction on her Form 1040, Schedule A?

a. $0

b. $1,000

c. $2,000

d. $4,000

Advanced Scenario 6: David Stone

Interview Notes

David Stone is 28 years old and single. He provides all of his own support.

David works at a gas station and earned $18,500 in wages.

David took two management courses at a community college to improve his job skills. He was less than a half time student. He wants to know if that qualifies for any educational tax benefit.

David took an early distribution from his IRA of $2,000 for tuition and $500 for emergency repairs of his air conditioning system. This is the first time he has taken a distribution from his IRA.

David is a U.S. citizen and lived in the U.S. for the entire year. He has a valid Social Security number.

Advanced Scenario 6: Test Questions

13. David is eligible to claim the American Opportunity Credit on his 2024 tax return.

a. True

b. False

14. For which of the following IRA distributions will David owe an additional tax of 10%?

a. $2,000 for tuition

b. $500 for emergency repairs

c. Both a and b

d. Neither a nor b

Advanced Scenario 7: Vincent and Faith Hunter

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

Vincent is a 5th grade teacher at a public school. Vincent and Faith are married and choose to file Married Filing Jointly on their 2024 tax return.

Vincent worked a total of 1,800 hours in 2024. During the school year, he spent $844 on unreimbursed classroom expenses.

Faith retired in 2021 and began receiving her pension on November 1st of that year. She explains that this is a joint and survivor annuity. She has already recovered $1,259 of the cost of the plan.

Vincent settled with his credit card company on an outstanding bill and brought the Form 1099-C to the site. They aren’t sure how it will impact their tax return for tax year 2024. The Hunters determined that they were solvent as of the date of the canceled debt.

Faith received $280 from Jury duty.

Their daughter, Hope, is in her second year of college pursuing a bachelor’s degree in Physics at a qualified educational institution. She received a scholarship, and the terms require that it be used to pay tuition. The Hunters provided Form 1098-T and an account statement from the college that included additional expenses. On Form 1098-T for the previous tax year, Box 7 was not checked. The Hunters paid $1,500 for books and equipment required for Hope’s courses. This information is also included on the college statement of account. The Hunters claimed the American Opportunity Credit last year for the first time.

Hope does not have a felony drug conviction.

They are all U.S. citizens with valid Social Security numbers.

Advanced Scenario 7: Test Questions

15. What is the taxable portion of Faith’s pension from Liberty Enterprises using the simplified method?

a. $0

b. $18,841.00

c. $19,519.00

d. $20,100.00

16. The Hunters are eligible to claim the credit for other dependents on their tax return.

a. True

b. False

17. What is the total amount of other income reported on the Hunters’ Form 1040 Schedule 1?

a. $0

b. $280

c. $850

d. $1,130

18. Vincent is eligible to deduct qualified educator expenses in the amount of $____________ (Note: whole number only, do not use special characters.)

19. What is the Hunters’ standard deduction on their 2024 tax return?

a. $21,900

b. $23,450

c. $29,200

d. $30,750

20. Which of the following expenses qualify for the American Opportunity Credit?

a. Required course related books and equipment

b. Tuition

c. Parking pass

d. Both a and b

21. The taxable amount of Faith’s Social Security income as reported on their Form 1040 is:

a. $ 0

b. $19,413

c. $20,314

d. $23,899

22. What is the Hunters’ total federal income tax withholding?

a. $4,400

b. $5,210

c. $5,590

d. $7,600

Advanced Scenario 8: Stephanie Winter

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

Stephanie is a paralegal, age 26, and single.

Stephanie has investment income and a consolidated broker’s statement.

Stephanie is self-employed delivering meals for Fast Eats on the weekends. She received a Form 1099-NEC and a Form 1099-K. She received additional cash payments of $570 including tips.

Stephanie uses the cash method of accounting. She uses business code 492000.

Stephanie provided a statement from Fast Eats indicating the fees paid for the year. These fees are considered ordinary and necessary for the food delivery business:

$150 for insulated box rental

$50 for vehicle safety inspection (required by Fast Eats)

$600 for Fast Eats fees

Stephanie also kept receipts for the following out-of-pocket expenses:

$80 for tolls while making deliveries

$300 for speeding ticket

$160 for Stephanie’s lunches

Stephanie’s record keeping application shows she has driven a total of 3,000 miles during and between deliveries.

She placed her only vehicle, an SUV, in service on 3/15/2020. The total mileage on her SUV for tax year 2024 was 12,500 miles. Of that, 9,500 miles were personal and commuting miles. Stephanie will take the standard business mileage rate.

Stephanie is paying on her student loan from 2019, when she completed her undergraduate degree.

Stephanie is working towards her Juris Doctorate degree to start a new career as a lawyer.

She took a few college courses this year at an accredited college.

Stephanie took an early distribution of $5,000 from her IRA in April. She used $2,400 of the IRA distribution to pay her educational expenses for the current year. She has never made any non-deductible contributions to her IRA.

If Stephanie has a refund, she would like it deposited into her checking account.

Notes Note: She also received $570 in cash payments per the interview notes.

Advanced Scenario 8: Test Questions

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

23. The net short-term capital gain reported on Stephanie’s Schedule D is $______.
(Note: whole number only,do not use special characters.)

24. Which of the following can be claimed as a business expense on Stephanie’s Schedule C?

a. Tolls

b. Speeding Ticket

c. Lunches

d. All of the above

25. Stephanie can take a student loan interest deduction of $3,750.

a. True

b. False

26. What is the total standard mileage deduction for Stephanie’s business on Schedule C?

a. $630

b. $1,965

c. $2,010

d. $8,040

27. The amount of Stephanie’s lifetime learning credit is $480.

a. True

b. False

28. What is Stephanie’s additional 10% tax on the early withdrawal from her IRA on Form 1040 Schedule 2, Part II??

a. $0

b. $240

c. $260

d. $500

29. To avoid having a balance due next year, Stephanie can use the IRS withholding estimator to calculate her tax liability and submit a new Form W-4 to increase her tax withholding.

a. True

b. False

Advanced Scenario 9: Joe Lopez

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

Joe is age 41 and was widowed in July, 2023. He has a daughter, Josie, age 9, who lived with him the entire year.

Joe provided the entire cost of maintaining the household and over half of the support for Josie. In order to work, he pays childcare expenses to Southside Daycare.

Joe purchased health insurance for himself and his daughter through the Marketplace. He received a Form 1095-A.

Joe and Josie are U.S. citizens and lived in the United States all year in 2024.

303 Twiggs Trail
Your City, Your State, Zip
Ph: (555) 555-1234

December 31, 2024

Received from Joe Lopez

$7,200 for daycare services for Josie

Total amount received for after school care in 2024 - $7,200

Ellen River

EIN: 35-900XXXX

Advanced Scenario 9: Test Questions

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

30. What is Joe’s most advantageous filing status?

a. Single

b. Married Filing Separately

c. Head of Household

d. Qualifying Surviving Spouse (QSS)

31. Joe adjusted gross income on his Form 1040 is _______.

a. $12,912

b. $42,000

c. $42,112

d. $42,140

32. Joe is eligible to claim the Child Tax Credit.

a. True

b. False

33. Joe’s retirement savings contributions credit is____.

a. $0

b. $100

c. $150

d. $1,500

34. The total amount of Joe’s net premium tax credit on Form 1040 Schedule 3, line 9 is $696.

a. True

b. False

35. Joe’s child and dependent care credit from Form 2441 is _____.
(Note: whole number only, do not use special characters.)

Advanced Course Retest Questions

Directions

The first five scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios.

Advanced Scenario 1: Sharon Smith

Interview Notes

Sharon’s husband, Daniel, moved out of their home in February of 2022. Sharon has had no contact with Daniel since he moved out. Sharon and Daniel are not legally separated.

Sharon has one child, Lea, age 10. She will claim Lea as a dependent on her 2024 tax return.

Sharon is 31 years old.

Sharon earned $44,500 in wages and received $50 of interest. Sharon had lottery winnings of $2,000 reported on Form W-2G.

Sharon paid all the costs of keeping up her home. She provided over half of the support for Lea.

They all are U.S. citizens and have valid Social Security numbers. They lived in the U.S. all year.

Advanced Scenario 1: Retest Questions

1. What is the most beneficial allowable filing status that Sharon is eligible to claim on her 2024 tax return?

a. Single

b. Married Filing Separately

c. Qualifying Surviving Spouse (QSS)

d. Head of Household

2. Based on the information provided, Sharon qualifies for the Earned Income Credit.

a. True

b. False

3. Sharon does not need to report her gambling winnings on her federal tax return.

a. True

b. False

Advanced Scenario 2: Jeff and Jane Spring

Interview Notes

Jeff and Jane are married and want to file a joint return.

Jeff is a U.S. citizen and has a valid Social Security number. Jane is a resident alien and has an ITIN. They resided in the United States all year with their children.

Jeff and Jane have two children, Joan, age 7, and Jim, age 15. Joan and Jim are U.S. citizens and have valid Social Security numbers.

Jeff earned $23,000 in wages.

Jane earned $21,000 in wages.

In order to work, the Springs paid $2,000 to their son, Jim to care for Joan after school.

Jeff and Jane provided all of the support for their two children.

Advanced Scenario 2: Retest Questions

4. The maximum amount Jeff and Jane are eligible to claim for the Child Tax Credit is $2,000.

a. True

b. False

5. Payments made to Jim can be claimed on Form 2441 as child and dependent care expenses.

a. True

b. False

Advanced Scenario 3: Mary Wood

Interview Notes

Mary Wood, age 58, is single.

Mary earned wages of $51,000 and was enrolled the entire year in a high deductible health plan (HDHP) with self-only coverage.

During the year, Mary contributed $2,000 to her Health Savings Account (HSA) and her mother also contributed $1,000 to Mary’s HSA.

Mary’s Form W-2 shows $1,150 in Box 12 with code W. She has Form 5498-SA showing $4,150 in Box 2.

Mary has Form 1099-SA showing her HSA distributions. She used her distributions to pay the following unreimbursed expenses:

$500 for nine visits to a physical therapist after her knee surgery

$1,000 unreimbursed doctor bills

$280 prescription medicine

$1,500 replacement of a crown

$300 deep cleaning for teeth

$40 over the counter medication

$260 gym membership (for her general health and fitness)

Mary is a U.S. citizen with a valid Social Security number.

Advanced Scenario 3: Retest Questions

6. Mary is eligible to contribute an additional $2,000 to her HSA because she is age 55 or older.

a. True

b. False

7. Mary cannot include her mother’s contribution on Form 8889, Part I.

a. True

b. False

8. The gym membership is a qualified medical expense for HSA purposes.

a. True

b. False

Advanced Scenario 4: Cheryl Brown

Interview Notes

Cheryl, age 62, is single. She owns her home and provided all the costs of keeping up her home for the entire year. Her only income for 2024 was $48,700 in W-2 wages.

Cindy, age 24, and her daughter Cary, age 5, have lived with Cindy’s mother, Cheryl, since Cindy separated from her spouse in April of 2023. Cindy’s only income for 2024 was $24,000 in wages. Cindy provided over half of her own support. Cary did not provide more than half of her own support.

Cindy will not file a joint return with her spouse.

All individuals in the household are U.S. citizens with valid Social Security numbers. No one has a disability. They lived in the United States all year.

Advanced Scenario 4: Retest Questions

9. Which of the following statements is true:

a. Cindy may not claim Cary as a dependent since Cheryl paid all of their housing costs.

b. Cheryl may claim Cary as a dependent if Cindy chooses not to claim her.

c. Only Cheryl may claim Cary as a dependent since her income is higher than Cindy’s income.

d. Only Cindy may claim Cary as a dependent since Cary is her daughter.

10. Cindy is eligible to claim Cary for the Earned Income Credit.

a. True

b. False

Advanced Scenario 5: Elizabeth Greene

Interview Notes

Elizabeth is 54 years old and files as single.

Her 2024 adjusted gross income (AGI) is $52,000, which includes gambling winnings of $2,000.

Elizabeth would like to itemize her deductions this year.

Elizabeth brings documents for the following items:

$9,500 hospital and doctor bills

$600 contributions to Health Savings Account (HSA)

$3,600 state withholding (higher than Elizabeth’s calculated state sales tax deduction)

$300 personal property taxes based on the value of the vehicle

$600 friend’s personal GoFundMe campaign

$350 cash contributions to the Red Cross

$200 fair market value of clothing in good used condition donated to the Salvation Army (Elizabeth purchased the clothing for $900)

$7,300 mortgage interest

$2,300 real estate tax

$1,500 homeowners association fees

$4,000 gambling losses

Advanced Scenario 5: Retest Questions

11. If Elizabeth chooses to itemize, which of the following is not an eligible deduction on Form 1040, Schedule A?

a. $7,300 mortgage interest

b. $1,500 homeowners association fees

c. $2,300 real estate tax

d. $350 contribution to the Red Cross

12. Elizabeth is eligible to claim $4,000 in gambling losses as a deduction on her Form 1040, Schedule A.

a. True

b. False

Advanced Scenario 6: David Stone

Interview Notes

David Stone is 28 years old and single. He provides all of his own support.

David works at a gas station and earned $18,500 in wages.

David took two management courses at a community college to improve his job skills. He was less than a half time student. He wants to know if that qualifies for any tax benefit.

David took an early distribution from his IRA of $2,000 for tuition and $500 for emergency repairs of his air conditioning system. This is the first time he has taken a distribution from his IRA.

David is a U.S. citizen and lived in the U.S. for the entire year. He has a valid Social Security number.

Advanced Scenario 6: Retest Questions

13. David’s modified adjusted gross income (MAGI) must be less than $90,000 to claim the Lifetime Learning Credit in 2024.

a. True

b. False

14. David will owe an additional $50 tax on the $500 IRA distribution for emergency repairs?

a. True

b. False

Advanced Scenario 7: Vincent and Faith Hunter

Interview Notes

Vincent is a 5th grade teacher at a public school. Vincent and Faith are married and choose to file Married Filing Jointly on their 2024 tax return.

Vincent worked a total of 1,800 hours in 2024. During the school year, he spent $844 on unreimbursed classroom expenses.

Faith retired in 2021 and began receiving her pension on November 1st of that year. She explains that this is a joint and survivor annuity. She has already recovered $1,259 of the cost of the plan.

Vincent settled with his credit card company on an outstanding bill and brought the Form 1099-C to the site. They aren’t sure how it will impact their tax return for tax year 2024. The Hunters determined that they were solvent as of the date of the canceled debt.

Faith received $280 from Jury duty.

Their daughter, Hope, is in her second year of college pursuing a bachelor’s degree in Physics at a qualified educational institution. She received a scholarship, and the terms require that it be used to pay tuition. Box 2 was not filled in and Box 7 was not checked on her Form 1098-T for the previous tax year. The Hunters provided Form 1098-T and an account statement from the college that included additional expenses. The Hunters paid $1,500 for books and equipment required for Hope’s courses. This information is also included on the college statement of account. The Hunters claimed the American Opportunity Credit last year for the first time.

Hope does not have a felony drug conviction.

They are all U.S. citizens with valid Social Security numbers.

Advanced Scenario 7: Retest Questions

15. The taxable portion of Faith’s pension from Liberty Enterprises using the simplified method is $23,899.

a. True

b. False

16. Which of the following credits are the Hunters able to claim on their federal tax return?

a. American Opportunity Credit

b. Earned Income Credit

c. Child Tax Credit

d. Premium Tax Credit

17. The total amount of other income reported on the Hunters’ Form 1040, Schedule 1 is $1,130.

a. True

b. False

18. What is the amount Vincent is eligible to claim as qualified educator expenses on Form 1040, Schedule 1?

a. $0

b. $250

c. $300

d. $844

19. The Hunters’ standard deduction on their Form 1040 for tax year 2024 is $29,200.

a. True

b. False

20. Which is not a qualifying expense for the American opportunity credit?

a. Tuition

b. Required course related books

c. Parking pass

d. Required course related equipment

21. All of Faith’s Social Security benefits are taxable according to the Social Security benefits worksheet.

a. True

b. False

22. The federal income tax withholding reported on the Hunters’ Form 1040 is $4,400

a. True

b. False

Advanced Scenario 8: Stephanie Winter

Interview Notes

Stephanie is a paralegal, age 26, and single.

Stephanie has investment income and a consolidated broker’s statement.

Stephanie is self-employed delivering meals for Fast Eats on the weekends. She received a Form 1099-NEC and a Form 1099-K. She received additional cash payments of $570 including tips.

Stephanie uses the cash method of accounting. She uses business code 492000.

Stephanie provided a statement from Fast Eats indicating the fees paid for the year. These fees are considered ordinary and necessary for the food delivery business:

$150 for insulated box rental

$50 for vehicle safety inspection (required by Fast Eats)

$600 for Fast Eats fees

Stephanie also kept receipts for the following out-of-pocket expenses:

$80 for tolls while making deliveries

$300 for speeding ticket

$160 for Stephanie’s lunches

Stephanie’s record keeping application shows she has driven a total of 3,000 miles during and between deliveries:

She placed her only vehicle, an SUV, in service on 3/15/2020. The total mileage on her SUV for tax year 2024 was 12,500 miles. Of that, 9,500 miles were personal and commuting miles. Stephanie will take the standard business mileage rate.

Stephanie is paying on her student loan from 2019, when she completed her undergraduate degree.

Stephanie is working towards her Juris Doctorate degree to start a new career as a Lawyer.

She took a few college courses this year at an accredited college.

Stephanie took an early distribution of $5,000 from her IRA in April. She used $2,400 of the IRA distribution to pay her educational expenses for the current year.

If Stephanie has a refund, she would like it deposited into her checking account.

Advanced Scenario 8: Retest Questions

23. Stephanie’s net short-term capital gain reported on Schedule D is $350.

a. True

b. False

24. Stephanie can claim her lunches as a business expense on her Schedule C

a. True

b. False

25. What is the amount Stephanie can take as a student loan interest deduction on her Form 1040, Schedule 1?

a. $0

b. $750

c. $2,500

d. $3,750

26. The total standard mileage deduction for Stephanie’s business on Schedule C is $2,010.

a. True

b. False

27. Which credit is Stephanie eligible for?

a. American Opportunity Credit

b. Earned Income Credit

c. Lifetime Learning Credit

d. Premium Tax Credit

28. Stephanie will have to pay $240 additional tax because she received the early distribution from her IRA.

a. True

b. False

29. How can Stephanie prevent having a balance due next year?

a. She can increase the withholding on a new Form W-4.

b. She can make estimated tax payments.

c. She can do nothing and file as usual.

d. Both a and b.

Advanced Scenario 9: Joe Lopez

Interview Notes

Joe is age 41 and was widowed in July, 2023. He has a daughter, Josie, age 9, who lived with him the entire year.

Joe provided the entire cost of maintaining the household and over half of the support for Josie. In order to work, he pays childcare expenses to Southside Daycare.

Joe purchased health insurance for himself and his daughter through the Marketplace. He received a Form 1095-A.

Joe and Josie are U.S. citizens and lived in the United States all year in 2024.

Advanced Scenario 9: Retest Questions

30. Joe can claim the Qualifying Surviving Spouse filing status.

a. True

b. False

31. Joe’s adjusted gross income is $42,140.

a. True

b. False

32. Joe cannot claim which of the following credits on his tax return.

a. Child Tax Credit

b. Credit for Other Dependents

c. Premium Tax Credit

d. Child and Dependent Care Credit

33. Joe qualifies to claim the Retirement Savings Contribution Credit.

a. True

b. False

34. Joe’s net premium tax credit on his Form 1040 Schedule 3, line 9 is $_______.
(Note: whole number only, do not use special characters.

35. Joe’s child and dependent care credit is $630.

a. True

b. False

Military Course Scenarios and Test Questions

Directions

The first four scenarios do not require you to prepare a tax return. Read the interview notes for the scenario carefully and use your training and resource materials to answer the questions.

Military Scenario 1: Gabriella Grassi

Interview Notes

Gabriella Grassi is single.

Gabriella is a medical technician in the Air Force Reserve. She attended training drills one weekend a month for 12 months in 2024.

Gabriella only owns one vehicle. She placed her vehicle in service on March 15, 2021.

Gabriella’s total mileage in 2024 was 12,530

Gabriella’s duty station is 135 miles away from her residence. She drove 3,240 miles to and from her duty station based on her travel log.

Gabriella paid $696 for meals while attending training drills. Lodging was provided for free on the base since she is enlisted.

Meals were within federal per diem rates for the area.

Gabriella paid $165 for the cost and upkeep of her uniforms. She is permitted to wear her uniform for off duty purposes.

Gabriella did not receive reimbursement for any of her out-of-pocket expenses.

Gabriella paid $89 in tolls, but parking on base was free.

Military Scenario 1: Test Questions

1. Gabriella is able to take an adjustment to income for:

a. Uniforms

b. Meals

c. Mileage and Tolls to and from her duty station

d. Both b and c

2. What is the correct amount of the deductible mileage expense?

a. $0

b. $181

c. $2,171

d. $8,395

Military Scenario 2: Frank and Felicia Falls

Interview Notes

Frank and Felicia lived in Boston, MA where Frank was stationed in the Navy for four years. He received new orders to move to Charleston, SC naval base. This is a permanent change of station (PCS).

They decided to make a Personally Procured Move (PPM).

Felicia traveled to Charleston in May to find a house to rent. She wanted a home close to the beach. She spent $1,362 on round-trip airfare, hotel, food, and rental car.

Frank and Felicia spent $343 on boxes, tape, bubble wrap, and mattress bags. They paid $775 for the rental truck.

On June 2, 2024, Frank and Felicia packed up their belongings and began driving from Boston to Charleston. Along the way, they stopped in Washington, DC to visit their parents.

The Falls drove their rental truck a total of 1,083 miles. The shortest, most direct route calculated by the Navy was 970 miles.

They stayed a total of 6 nights instead of the authorized 2 nights. The allowable lodging per diem was $96 per night.

Frank and Felicia spent $315 for food and $125 on souvenir hats. They also spent $120 on museum tickets while in Washington.

They paid $35 in highway tolls and $75 for parking as part of the expected move.

Their move was estimated to cost $1,624 and the Navy provided $1,461 in advance.

Frank and Felicia are U.S. citizens and have valid Social Security numbers.

Military Scenario 2: Test Questions

3. Any net financial profit from the move would be reported on:

a. It doesn’t need to be reported

b. Form 1040 Schedule A, Itemized Deductions

c. Form 1099-MISC, Miscellaneous Information

d. Form W-2, Wage and Tax Statement

4. Which of the following are qualified moving expenses for Frank and Felicia?

a. Expenses that are reasonable for the circumstances of the move.

b. Traveling expenses for the shortest most direct route available from the former home to the new home including parking and tolls.

c. Expenses for stopovers, side trips, and pre-move house hunting.

d. Both a and b

5. How much can Frank and Felicia claim for the mileage $ _______? (Round to nearest dollar)

a. $204

b. $227

c. $650

d. $726

6. How much can Frank and Felicia claim as their total qualified lodging expenses?

a. $0

b. $96

c. $192

d. $576

Military Scenario 3: Janice Jordan

Interview Notes

Janice Jordan is a retired member of the U.S. Army.

She received Form 1099-R for retirement payments from the Defense Finance and Accounting Service.

Form 1099-R indicates $37,555 in Box 1 and Box 2a.

Janice is considered 10% disabled and received a letter of determination from the Department of Veterans Affairs (VA).

She received a payment in the amount of $2,117 from the VA for disability.

Military Scenario 3: Test Questions

7. The $37,555 from Defense Finance and Accounting Service is subject to which type of tax?

a. Social Security Tax

b. Medicare Tax

c. Self-Employment Tax

d. Federal Income Tax

8. The VA issues Form 1099-R for disability payments.

a. True

b. False

Military Scenario 4: Anthony and Lisa Jones

Interview Notes

Anthony and Lisa Jones are married and have a 10-year-old son who lived with Anthony all year.

Lisa was deployed to a designated combat zone on November 29, 2024. Her last day in the combat zone is scheduled for August 18, 2025.

Lisa’s Form W-2 shows:

Box 1 = $16,500

Box 12a = $5,000, Code Q

Anthony’s Form W-2 shows $35,000 in Box 1. This is his only income.

Anthony, Lisa, and their son are all U.S. citizens and have valid Social Security numbers. The entire family lives in the U.S.

Military Scenario 4: Test Questions

9. Anthony and Lisa should not count her combat pay to receive their Earned Income Credit.

a. True

b. False

10. If Lisa was injured in the combat zone and hospitalized as a result, Anthony and Lisa can wait until after her hospital release to use the extension that service members are allowed to take to file their tax return.

a. True

b. False

Military Scenario 5: Robert and Robin Hood

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

Robert and Robin are married and want to file a joint return.

Robert and Robin have an 18 year old son, Pablo, who lived with them the entire year.

Robert was deployed and entered a combat zone on July 18, 2024. He returned to the U.S. on March 24, 2025.

Robin has rental property, which she placed into service in 2017.

Rental property:

Robin is an active participant.

Single family residence at 456 Penny Lane, Your City, Your State, Your Zip

Purchased property: 2/22/2016

Rented: 1/1/2024 to 12/31/2024

Annual rental income: $24,300

Insurance: $1,893

Management fees: $1,007

Robin paid $2,476 to resurface the floors, unclog a sink, and repair leaks in the roof. She fixed the clogged sink herself and feels her time completing the repair was worth $200 compared to the estimate from the plumber.

Real estate property tax: $3,214

Mortgage Interest: $4,325

Depreciation: $2,400 (annual amount previously calculated by Robin’s accountant) (NOTE: enter this depreciation amount at the bottom “Depletion” box, in the Schedule E Rental/Royalty Expense section in TaxSlayer.)

Robin did not make any payments that require her to file Form 1099.

They did not itemize last year and do not have enough deductions to itemize this year.

Military Scenario 5: Test Questions

11. Robert and Robin can claim $15,315 as their total rental expenses on their joint return?

a. True

b. False

12. What is the amount of Robert’s combat pay from his W-2?

a. $1,650

b. $15,250

c. $16,000

d. $31,250

13. The Hoods’ net rental income (rental income minus expenses) is figured using Schedule C and reported as self-employment income on Form 1040, Schedule 1, Additional Income and Adjustments to Income.

a. True

b. False

14. Combat pay ______________________

a. May increase the Earned Income Credit

b. Is not subject to Federal income tax

c. May increase the Additional Child Tax Credit

d. All of the above

15. Which of the following credits can be claimed for their son, Pablo?

a. Child Tax Credit

b. Credit for Other Dependents

c. Earned Income Credit (not counting Robert’s combat pay)

d. Both b and c

Military Course Scenarios and Retest Questions

Directions

The first four scenarios do not require you to prepare a tax return. Read the interview notes for the scenario carefully and use your training and resource materials to answer the questions.

Military Scenario 1: Gabriella Grassi

Interview Notes

Gabriella Grassi is single.

Gabriella is a medical technician in the Air Force Reserve. She attended training drills one weekend a month for 12 months in 2024.

Gabriella only owns one vehicle. She placed her vehicle in service on March 15, 2021.

Gabriella’s total mileage in 2024 was 12,530.

Gabriella’s duty station is 135 miles away from her residence. She drove 3,240 miles to and from her duty station based on her travel log.

Gabriella paid $696 for meals while attending training drills. Lodging was provided for free on the base since she is enlisted.

Meals were within federal per diem rates for the area.

Gabriella paid $165 for the cost and upkeep of her uniforms. She is permitted to wear her uniform for off duty purposes.

Gabriella did not receive reimbursement for any of her out-of-pocket expenses.

Gabriella paid $89 in tolls, but parking on base was free.

Military Scenario 1: Retest Questions

1. The amount Gabriella paid for meals, mileage, and tolls is deductible as an adjustment to income.

a. True

b. False

2. The correct amount of deductible mileage expense is $2,171.

a. True

b. False

Military Scenario 2: Frank and Felicia Falls

Interview Notes

Frank and Felicia lived in Boston, MA where Frank was stationed in the Navy for four years. He received new orders to move to Charleston, SC naval base. This is a permanent change of station (PCS).

They decided to make a Personally Procured Move (PPM).

Felicia traveled to Charleston in May to find a house to rent. She wanted a home close to the beach. She spent $1,362 on round-trip airfare, hotel, food, and rental car.

Frank and Felicia spent $343 on boxes, tape, bubble wrap, and mattress bags. They paid $775 for the rental truck.

On June 2, 2024, Frank and Felicia packed up their belongings and began driving from Boston to Charleston. Along the way, they stopped in Washington, DC to visit their parents.

The Falls drove their rental truck a total of 1,083 miles. The shortest, most direct route calculated by the Navy was 970 miles.

They stayed a total of 6 nights instead of the authorized 2 nights. The allowable lodging per diem was $96 per night.

Frank and Felicia spent $315 for food and $125 on souvenir hats. They also spent $120 on museum tickets while in Washington.

They paid $35 in highway tolls and $75 for parking as part of the expected move.

Their move was estimated to cost $1,624 and the Navy provided $1,461 in advance.

Frank and Felicia are U.S. citizens and have valid Social Security numbers.

Military Scenario 2: Retest Questions

3. Frank and Felicia’s net profit from their move will not be reported on Form W-2, Wage and Tax Statement.

a. True

b. False

4. The Falls can deduct the cost of the 4 extra nights of lodging and house hunting trip as qualified moving expenses.

a. True

b. False

5. The mileage cost for Frank and Felicia’s trip was $204.

a. True

b. False

6. The Falls can claim $576 as their lodging expense?

a. True

b. False

Military Scenario 3: Janice Jordan

Interview Notes

Janice Jordan is a retired member of the U.S. Army.

She received Form 1099-R for retirement payments from the Defense Finance and Accounting Service.

Form 1099-R indicates $37,555 in Box 1 and Box 2a.

Janice is considered 10% disabled and received a letter of determination from the Department of Veterans Affairs (VA).

She received a payment in the amount of $2,117 from the VA for disability.

Military Scenario 3: Retest Questions

7. Which of the following documents are issued by the VA for disability payments?

a. Form W-2, Wage and Tax Statement

b. Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit Sharing Plans, Insurance Contracts, etc.

c. Form W-2 or 1099-R, depending on type of disability.

d. No tax form is required to be issued; however, Janice may receive a statement.

8. The disability payment of $2,117 that Janice received from the VA is taxable.

a. True

b. False

Military Scenario 4: Anthony and Lisa Jones

Interview Notes

Anthony and Lisa Jones are married and have a 10-year-old son who lived with Anthony all year.

Lisa was deployed to a designated combat zone on November 29, 2024. Her last day in the combat zone is scheduled for August 18, 2025.

Lisa’s Form W-2 shows:

Box 1 = $16,500

Box 12a = $5,000, Code Q

Anthony’s Form W-2 shows $35,000 in Box 1. This is his only income.

Anthony, Lisa, and their son are all U.S. citizens and have valid Social Security numbers. The entire family lives in the U.S.

Military Scenario 4: Retest Questions

9. Anthony and Lisa can choose to count her combat pay if it increases their Earned Income Tax Credit.

a. True

b. False

10. For members of the Armed Forces serving in a combat zone or Qualified Hazardous Duty Area, deadlines for taking action with the IRS are automatically extended until 180 days plus up to 3 1/2 months if the taxpayer entered the combat zone before the beginning of the year from the time the member leaves the combat zone/qualified hazardous duty area.

a. True

b. False

Military Scenario 5: Robert and Robin Hood

Interview Notes

Robert and Robin are married and want to file a joint return.

Robert and Robin have an 18-year-old son, Pablo, who lived with them the entire year.

Robert was deployed and entered a combat zone on July 18, 2024. He returned to the U.S. on March 24, 2025.

Robin has rental property, which she placed into service in 2017.

Rental property:

Robin is an active participant

Single family residence at 456 Penny Lane, Your City, Your State, Your Zip

Purchased property: 2/22/2016

Rented: 1/1/2024 to 12/31/2024

Annual rental income: $24,300

Insurance: $1,893

Management fees: $1,007

Robin paid $2,476 to resurface the floors, unclog a sink, and repair leaks in the roof. She fixed the clogged sink herself and feels her time completing the repair was worth $200 compared to the estimate from the plumber.

Real estate property tax: $3,214

Mortgage Interest: $4,325

Depreciation: $2,400 (annual amount previously calculated by Robin’s accountant) (NOTE: enter this depreciation amount at the bottom “Depletion” box, in the Schedule E Rental/Royalty Expense section in TaxSlayer.)

Robin did not make any payments that require her to file Form 1099

They did not itemize last year and do not have enough deductions to itemize this year.

Military Scenario 5: Retest Questions

Directions

Refer to the scenario information for Robert’s and Robin’s income documents.

11. The value of Robin’s labor to fix the clogged sink is a deductible rental expense.

a. True

b. False

12. Code “Q” in box 12a of Robert’s W-2 represents combat pay.

a. True

b. False

13. Which schedule is used to report rental income and expenses?

a. Schedule A, Itemized Deductions

b. Schedule C, Profit or Loss From Business

c. Schedule D, Capital Gains or Losses

d. Schedule E, Supplemental Income and Loss

14. Combat pay is taxable for federal income tax purposes.

a. True

b. False

15. The Hoods can claim the Child Tax Credit for their son, Pablo.

a. True

b. False

International Course Scenarios and Test Questions

Directions

The first two scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios.

International Scenario 1: Johnathan and Mckena Benderas

Interview Notes

Johnathan and Mckena currently live in Spain.

They moved there on June 6, 2016, and rent a 2-bedroom apartment. Johnathan was transferred there for an indefinite period of time.

Johnathan is employed by a U.S.-based Fortune 500 company and Mckena teaches English as a second language.

Johnathan and Mckena returned to the U.S. for 7 days for a sporting event in February 2024. They also took a 10-day vacation to Morocco in October of 2024.

Neither Johnathan nor Mckena work for the U.S. government.

Johnathan and Mckena have a house in the U.S. It is vacant while they are overseas. Aunt Sally house-sits while they are living abroad.

Johnathan and Mckena are U.S. citizens and have valid Social Security numbers.

International Scenario 1: Test Questions

1. The 10-day vacation to Morocco can be included when counting the 330 days for the physical presence test.

a. True

b. False

2. In order for Johnathan and Mckena to claim the Foreign Earned Income Exclusion, they must ________.

a. Demonstrate that their tax home is in a foreign country

b. Meet the bona fide residence test or the physical presence test

c. Have income that qualifies as foreign earned income

d. All of the above

International Scenario 2: Trin and Cindy Yamamoto

Interview Notes

Trin and Cindy are married and live in Kobe, Japan.

Cindy is a U.S. citizen and has a valid Social Security number. Trin is a citizen of Japan and has an ITIN for U.S. tax filing purposes.

In 2020, Trin and Cindy chose to treat Trin as a resident alien for tax purposes. This choice has never been suspended or revoked.

Trin and Cindy have a daughter, Carolyn, who was born on August 5, 2020. Carolyn is a U.S. citizen and has a valid Social Security number issued by the due date of the return, including extensions.

Trin’s mother, Akari, moved in with them in 2021. Akari is a citizen of Japan and has no income.

Cindy is employed by a Fortune 500 company and earned $26,792.

Trin works as a musician and earned the equivalent of $21,475 in US dollars.

Trin and Cindy provide all financial support for Carolyn and Akari.

International Scenario 2: Test Questions

3. Neither spouse wishes to revoke their election to treat Trin as a resident alien. What are Cindy’s filing status options this year?

a. She must file Married Filing Separately

b. She must file Married Filing Jointly

c. She can file as Single

d. She can choose to file Married Filing Separately or Married Filing Jointly

4. How can the Yamamotos decide to end their election to treat Trin as a resident alien?

a. Death of either spouse

b. Divorce or Legal Separation

c. Revocation in writing

d. All of the above

5. On a Married Filing Jointly return, can Trin and Cindy claim Akari as a dependent?

a. No, because Akari is not a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico

b. Yes, because Akari meets the relationship test

c. Yes, because Akari is a qualifying relative with no income

d. None of the above

6. On a Married Filing Jointly return, Trin and Cindy are able to claim which of the following credits for Carolyn?

a. Child Tax Credit

b. Earned Income Tax Credit

c. Other Dependents Credit

d. None of the above

International Scenario 3: Gregory and Samantha Bean

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, or worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

Gregory is a U.S. citizen married to Samantha who is a British citizen. Samantha has elected to be treated as a resident alien. They have both lived in England since March 12, 2020. They do not maintain an address in the U.S. and have no intentions of returning.

Gregory considers himself a resident of England. They rent an apartment at 311 Downing Street, Manchester, UK W2SC5.

Income:

Samantha has an ITIN of 911-00-XXXX, and she does not want to claim the Foreign Earned Income Exclusion for herself.

Gregory’s visa type: Unlimited

Gregory works at the U.S. Embassy and has a Form W-2 for his salary.

In 2024, Gregory got a job working part-time as a food server. He works for the Manchester Stadium located at 678 Rowdy Road, Manchester, UK, 2WSC4. Gregory earned an equivalent of $7,800 in wages and paid taxes totaling 500 Pounds. These taxes were paid to England.

Samantha works at her job as a paralegal for the firm of Rothchilds and Randy. The firm is located at 10 New Drum Street, Manchester, UK, 1ECR3. She earned $45,000 that she already converted to U.S. currency. She states that she paid English income taxes of 3,400 Pounds. The 2024 average annual exchange rate was 1 U.S. Dollar (USD) = 0.794 Pounds.

Gregory was not required to file FinCen Form 114 or Form 8938.

Gregory and Samantha did not itemize in 2023, and they do not have enough deductions to itemize in 2024.

International Scenario 3: Test Questions

7. What is the amount of foreign earned income excluded for Gregory?

a. $0

b. $7,800

c. $45,000

d. $54,225

8. Samantha is required to report the $45,000 in wages from Rothchilds and Randy.

a. True

b. False

9. Which source of Gregory and Samantha’s income is general category income for the Foreign Tax Credit?

a. Wages from the Manchester Stadium

b. Wages from Rothchilds and Randy

c. Wages from the U.S.Embassy

d. None of the above

10. Which source of Gregory’s income qualifies for the Foreign Earned Income Exclusion?

a. Wages from the Manchester Stadium

b. Wages from U.S. Embassy

c. Both a and b

d. None of the above

11. What eligibility requirements must Gregory meet in order to be able to exclude his foreign earned income?

a. He must meet the bona fide residence test or physical presence test.

b. He must have income that qualifies as foreign earned income.

c. His tax home must be in a foreign country.

d. All of the above

12. Gregory can claim both the Foreign Tax Credit for the 500 Pounds income taxes paid to England and exclude the $7,800 foreign earned income from his part time job at the stadium.

a. True

b. False

13. Gregory can include the amount of foreign tax paid to England as withheld Federal income taxes.

a. True

b. False

14. Which of the following statements is true?

a. The foreign earned income exclusion is voluntary.

b. The election for the foreign earned income exclusion is made by completing the Form 2555, Foreign Earned Income.

c. Once the election is made to exclude foreign earned income, that choice remains in effect for that year and all later years until revoked.

d. All of the above

15. What is the amount of foreign taxes paid on Samantha’s wages, converted to U.S. dollars? (Round to the nearest dollar).

a. $0

b. $630

c. $4,282

d. $5,423

International Course Retest Questions

Directions

The first two scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use your training and resource materials to answer the questions after the scenarios.

International Scenario 1: Johnathan and Mckena Benderas

Interview Notes

Johnathan and Mckena currently live in Spain.

They moved there on June 6, 2016, and rent a 2-bedroom apartment. Johnathan was transferred there for an indefinite period of time.

Johnathan is employed by a U.S.-based Fortune 500 company and Mckena teaches English as a second language.

Johnathan and Mckena returned to the U.S. for 7 days for a sporting event in February 2024. They also took a 10-day vacation to Morocco in October 2024.

Neither Johnathan nor Mckena work for the U.S. government.

Johnathan and Mckena have a house in the U.S. It is vacant while they are overseas. Aunt Sally house-sits while they are living abroad.

Johnathan and Mckena are U.S. citizens and have valid Social Security numbers.

International Scenario 1: Retest Questions

1. A short trip back to the U.S. doesn’t prevent Johnathan and Mckena from claiming the bona fide residence test.

a. True

b. False

2. Which test qualifies Johnathan and Mckena for claiming the foreign earned income exclusion?

a. Bona fide resident test

b. Physical presence test

c. Both a and b

d. Neither a nor b

International Scenario 2: Trin and Cindy Yamamoto

Interview Notes

Trin and Cindy are married and live in Kobe, Japan.

Cindy is a U.S. citizen and has a valid Social Security number. Trin is a citizen of Japan and has an ITIN for U.S. tax filing purposes.

In 2020, Trin and Cindy chose to treat Trin as a resident alien for tax purposes. This choice has never been suspended or revoked.

Trin and Cindy have a daughter, Carolyn, who was born on August 5, 2020. Carolyn is a U.S. citizen and has a valid Social Security number issued by the due date of the return, including extensions.

Trin’s mother, Akari, moved in with them in 2021. Akari is a citizen of Japan and has no income.

Cindy is employed by a Fortune 500 company and earned $26,792.

Trin works as a musician and earned the equivalent of $21,475 in U.S. Dollars.

Trin and Cindy provide all financial support for Carolyn and Akari.

International Scenario 2: Retest Questions

3. How should Trin’s income be treated on a Married Filing Jointly return?

a. Trin’s income does not need to be included on the return because Akari says he doesn’t have to report it.

b. They do not have to file a return because their combined income is less than the foreign earned income exclusion limit

c. Trin’s income does not need to be included on the return because it is paid by a company in Japan

d. Trin’s worldwide income must be reported on the return

4. Trin can revoke the election to be treated as a resident alien at anytime.

a. True

b. False

5. Trin and Cindy can claim Akari as a dependent.

a. True

b. False

6. Carolyn is a qualifying child for the Earned Income Tax Credit on the Yamamotos’ return.

a. True

b. False

International Scenario 3: Retest Questions

Directions

Refer to the scenario information for Gregory and Samantha Bean.

Interview Notes

Gregory is a U.S. citizen married to Samantha who is a British citizen. Samantha has elected to be treated as a resident alien. They have both lived in England since March 12, 2020. They do not maintain an address in the U.S. and have no intentions of returning.

Gregory considers himself a resident of England. They rent an apartment at 311 Downing Street, Manchester, UK W2SC5.

Income:

Samantha has an ITIN of 911-00-XXXX, and she does not want to claim the Foreign Earned Income Exclusion for herself.

Gregory’s visa type: Unlimited

Gregory works at the U.S. Embassy and has a Form W-2 for his salary.

In 2024, Gregory got a job working part-time as a food server. He works for the Manchester Stadium located at 678 Rowdy Road, Manchester, UK, 2WSC4. Gregory earned an equivalent of $7,800 in wages and paid taxes totaling 500 Pounds. These taxes were paid to England.

Samantha works at her job as a paralegal for the firm of Rothchilds and Randy. The firm is located at 10 New Drum Street, Manchester, UK, 1ECR3. She earned $45,000 that she already converted to U.S. currency. She states that she paid English income taxes of 3,400 Pounds. The 2024 average annual exchange rate was 1 U.S. Dollar (USD) = 0.794 Pounds.

Gregory was not required to file FinCen Form 114 or Form 8938.

Gregory and Samantha did not itemize in 2023, and they do not have enough deductions to itemize in 2024.

7. The amount of Gregory’s Foreign Earned Income Exclusion is $7,800.

a. True

b. False

8. Samantha does not have to report her wages from Rothchilds and Randy because:

a. Foreign general category income is not taxable

b. Form W-2 was not issued to her

c. She already paid foreign taxes to England on her wages

d. None of the above. She must report her worldwide income since she is being treated as a resident alien.

9. Which source of Gregory and Samantha’s income is not classified as general category income for the Foreign Tax Credit?

a. Wages from Rothchilds and Randy

b. Wages from the U.S. Embassy

c. All of the above

d. None of the above

10. Gregory is able to exclude his wages from the U.S. Embassy for the Foreign Earned Income Exclusion because he is a civilian employee of the U.S. government.

a. True

b. False

11. Gregory does meet the requirements of the bona fide residence test and can exclude his foreign earned income.

a. True

b. False

12. Samantha is required to file Form 1116, Foreign Tax Credit, to claim the credit for the foreign taxes paid on her wages to England.

a. True

b. False

13. What is the amount of Federal income tax withheld on their Form 1040?

a. $500.00

b. $3,361.95

c. $3,786.26

d. $5,423.00

14. Gregory does not need to file a Form 2555, Foreign Earned Income, with his tax return.

a. True

b. False

15. To convert a sum of money into U.S. dollars, divide the amount of foreign currency by the exchange rate for the foreign currency to one U.S. dollar.

a. True

b. False

Federal Tax Law Update Test for Circular 230 Professionals

Directions

The first three scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use the Important Changes lesson in Publication 4491, VITA/TCE Training Guide, or in Link & Learn Taxes to answer the questions after the scenarios. All questions are based on calendar year 2024 tax law.

Scenario 1: Herb and Alice Freeman

Interview Notes

Herb and Alice are married and file a joint return. Herb is 74 years old and Alice turned 73 in February 2024. Neither are blind.

Both Herb and Alice are retired. Herb works part time as a greeter.

Alice is confused about the Required Minimum Distribution rules, and wants to know when she should take her first distribution from her IRA.

Herb has earned income from his part time job. The total of Herb and Alice’s wages, pension, and taxable Social Security income is $54,500. They received no other income and have no adjustments in 2024.

Herb and Alice’s 12 year old foster child, Taylor, was placed in their care in March 2024 by an authorized agency responsible for placing children in foster homes.

Herb, Alice and Taylor are U.S. citizens, lived in the United States all year, and have valid Social Security numbers.

Scenario 1: Test Questions

1. What is Herb and Alice’s standard deduction?

a. $27,700

b. $29,200

c. $30,750

d. $32,300

2. When does Alice need to take her first Required Minimum Distribution (RMD)?

a. Alice is late. She was required to take her first RMD by April 1 of the year after the year she turned 70 ½.

b. By April 1, 2024

c. By December 31, 2024

d. By April 1, 2025

3. Herb and Alice qualify for the earned income credit (EIC).

a. True, because Taylor is their qualifying child and their earned income and AGI is less than the threshold amount.

b. True, Taylor is not their qualifying child but they have earned income and adjusted gross income under the threshold for a married couple without a qualifying child.

c. False, because they are over the age limit for claiming the credit.

d. False, because their income is too high.

Scenario 2: Chloe Carlow

Interview Notes

Chloe is single, a U.S. citizen, and has a valid Social Security number. No one else lives in the household with her. She is 51 years old.

Chloe worked full time. Her total income from wages is $53,000. She has no other income. She is covered by a retirement plan at work.

Chloe contributed $6,000 to her traditional IRA in 2024.

Chloe owns a home in the U.S. that she lives in all year as her principal residence.

In 2023, made improvements and claimed a $1,200 energy efficient home improvement credit on her 2023 federal income tax return.

In 2024, she bought three new exterior doors for $600 each to replace old doors on her home. The new doors meet the energy star program requirements to claim the energy efficient home improvement credit. She expects the doors to remain in use for more than 5 years. The purchase price of the doors does not include labor.

Scenario 2: Test Questions

4. Chloe visits your site in February 2025 and says she wants to make the maximum IRA contribution for 2024. How much more can she contribute?

a. $0 because it is after December 31 and too late to make a 2024 contribution

b. $0 because she has already contributed the maximum allowed

c. $1,000

d. $2,000

5. What is the maximum amount of energy efficient home improvement credit that Chloe can claim on her 2024 federal income tax return for her new doors?

a. $0

b. $500

c. $540

d. $1,800

Scenario 3: Lexi Lincoln

Interview Notes

Lexi, age 32, is widowed. Her spouse died in September 2024. In 2023, they filed a joint return. Lexi does not have children or any other dependents.

Lexi is the beneficiary of a section 529 qualified tuition plan (QTP) that her parents established in 1998. Lexi initiated a rollover from her QTP account to fund her Roth IRA.

Lexi has a self-only high deductible health care plan (HDHP) and a health savings account (HSA). She received Form 1099-SA showing a distribution of $10,000 from her HSA. Her receipts show she paid:

$300 for a doctor appointment for Lexi

$1,500 for doctor appointments, prescriptions, and lab tests for Lexi’s husband

$200 for prescription medication for Lexi

$8,000 for funeral expenses for her husband

Lexi sold some of her used designer clothing through an online marketplace. She received Form 1099-K reporting the $500 sale. She originally paid $1,500 for the clothing.

Lexi and her spouse are U.S. citizens with a valid Social Security numbers.

Scenario 3: Test Questions

6. What is Lexi’s most advantageous allowable filing status?

a. Married Filing Jointly

b. Married Filing Separately

c. Single

d. Qualifying Surviving Spouse

7. How much of Lexi’s Form 1099-SA amount is taxable?

a. $0 because she had qualified medical expenses of $10,000

b. $8,000 because funeral costs are not qualified medical expenses

c. $9,500 because Lexi cannot use money from her HSA to pay for her spouse’s expenses

d. $9,700 because only Lexi’s doctor appointments are qualified medical expenses

8. What conditions must be met in order for Lexi to have a valid QTP rollover to fund her Roth IRA?

a. The rollover must be paid through a trustee-to-trustee transfer.

b. The rollover amount cannot be more than the Roth IRA annual contributions limit.

c. The rollover must be from a section 529 account that has been open for more than 15 years.

d. All of the above.

9. According to the Instructions for Schedule 1, how should Lexi report the Form 1099-K she received?

a. She should not report the transaction because a personal loss is not deductible.

b. On Schedule D (Form 1040), she should report a loss of $1,000.

c. On Schedule 1 (Form 1040), she should enter $500 on the line at the top of the form for a personal item sold at a loss.

Scenario 4: Siena King

Directions

Using the tax software, complete the tax return, including Form 1040 and all appropriate forms, schedules, and worksheets. Answer the questions following the scenario.

Notes When entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice.

Interview Notes

Siena King is 28 years old. Her divorce was final on May 31, 2024.

In March, shortly after experiencing domestic abuse by her spouse, Siena took a $7,000 distribution from her retirement plan to start divorce proceedings and get her own apartment.

Siena’s 4 year old daughter, Kenna, lives with her. Siena pays all the costs of keeping up the home where they live and all of Kenna’s support.

Siena’s mother, Stacy, lived with Siena all year. She watches Kenna while Siena works. Stacy receives $12,000 per year from Social Security, and a taxable pension of $500 per month. Stacy is widowed. Siena calculated that Siena paid more than half of her mother’s support for the year.

Siena is a full-time science teacher at a local public middle school. She spent $400 of her own money to purchase supplies for labs she conducted with her students. She did not receive any reimbursement for these expenses.

On weekends and during the summer, Siena cleans houses. She provides Form 1099-K showing credit card payments she received. She was also paid $5,200 in cash. Siena kept the following record of her expenses:

$350 for cleaning supplies

1,250 miles driven between her home and the first and last cleaning job of the day.

3,500 miles driven between cleaning jobs

$100 on tolls

$50 for parking tickets

$520 for snacks and lunches Siena ate while working

She drove 10,000 miles for personal purposes. She does not have a separate car for personal use. She started using her car for business on May 17, 2023.

Siena, Kenna, and Stacy are U.S. citizens, have valid Social Security numbers, and lived in the United States all year.

Form 13614-C

Form W-2 and Form 1099-R

Form 1099-K

Scenario 4: Test Questions

10. What is Siena’s most advantageous allowable filing status?

a. Single

b. Qualifying Surviving Spouse

c. Married Filing Separately

d. Head of Household

11. Siena can claim her mother, Stacy, as a dependent.

a. True, because Siena provided over half of Stacy’s support.

b. True, because Stacy lived with Siena for more than half the year.

c. False, because a taxpayer’s parent cannot be their dependent.

d. False, because Stacy’s gross income is over the threshold amount for 2024.

12. How many miles can Siena claim for the business mileage expense?

a. 1,250

b. 3,500

c. 4,750

d. 14,750

13. For 2024, how much can Siena take as an educator expense deduction for the lab supplies she purchased for her students?

a. $250

b. $300

c. $350

d. $400

14. For Siena to avoid the 10% additional tax on her early distribution for 2024, which of the following must be true?

a. The distribution is made from an applicable eligible retirement plan

b. The distribution is made to an individual during the 1-year period beginning on the date on which the individual is a victim of domestic abuse by a spouse or domestic partner

c. The distribution must not exceed the lesser of $10,000 or 50% of the present value of the nonforfeitable accrued benefit to the employee under the plan

d. All of the above

e. Siena cannot avoid the 10% additional tax on her 2024 distribution

15. Siena wants to eventually repay the amount she took as a distribution this year. She may make the repayment any time during the 3-year period beginning on the day after the date on which the distribution was received.

a. True

b. False

Federal Tax Law Update Retest for Circular 230 Professionals

Directions

The first three scenarios do not require you to prepare a tax return. Read the interview notes for each scenario carefully and use the Important Changes lesson in Publication 4491, VITA/TCE Training Guide, or in Link & Learn Taxes to answer the questions after the scenarios. All questions are based on calendar year 2024 tax law.

Scenario 1: Herb and Alice Freeman

Interview Notes

Herb and Alice are married and file a joint return. Herb is 74 years old and Alice turned 73 in February 2024. Neither are blind.

Both Herb and Alice are retired. Herb works part time as a greeter.

Alice is confused about the Required Minimum Distribution rules, and wants to know when she should take her first distribution from her IRA.

Herb has earned income from his part time job. The total of Herb and Alice’s wages, pension, and taxable Social Security income is $54,500. They received no other income and have no adjustments in 2024.

Herb and Alice’s 12 year old foster child, Taylor, was placed in their care in March 2024 by an authorized agency responsible for placing children in foster homes.

Herb, Alice and Taylor are U.S. citizens, lived in the United States all year, and have valid Social Security numbers.

Scenario 1: Retest Questions

1. Herb and Alice’s standard deduction is $29,200.

a. True

b. False

2. Alice must take her first Required Minimum Distribution (RMD) by April 1, ______ (fill-in the year)?

3. To claim the Earned Income Credit (EIC), a married couple filing a joint return with one qualifying child must have AGI less than:

a. $46,560

b. $49,084

c. $53,120

d. $56,004

Scenario 2: Chloe Carlow

Interview Notes

Chloe is single, a U.S. citizen, and has a valid Social Security number. No one else lives in the household with her. She is 51 years old.

Chloe worked full time. Her total income from wages is $53,000. She has no other income. She is covered by a retirement plan at work.

Chloe contributed $6,000 to her traditional IRA in 2024.

Chloe owns a home in the U.S. that she lives in all year as her principal residence.

In 2023, she made improvements and claimed a $1,200 energy efficient home improvement credit on her 2023 federal income tax return.

In 2024, she bought three new exterior doors for $600 each to replace old doors on her home. The new doors meet the energy star program requirements to claim the energy efficient home improvement credit. She expects the doors to remain in use for more than 5 years. The purchase price of the doors does not include labor.

Scenario 2: Retest Questions

4. The maximum IRA contribution Chloe can make for 2024 is $7,000.

a. True

b. False

5. Chloe cannot claim the energy efficient home improvement credit because she claimed the maximum amount last year.

a. True

b. False

Scenario 3: Lexi Lincoln

Interview Notes

Lexi, age 32, is widowed. Her spouse died in September 2024. In 2023, they filed a joint return. Lexi does not have children or any other dependents.

Lexi is the beneficiary of a section 529 qualified tuition plan (QTP) that her parents established in 1998. Lexi initiated a rollover from her QTP account to fund her Roth IRA.

Lexi has a self-only high deductible health care plan (HDHP) and a health savings account (HSA). She received Form 1099-SA showing a distribution of $10,000 from her HSA. Her receipts show she paid:

$300 for a doctor appointment for Lexi

$1,500 for doctor appointments, prescriptions, and lab tests for Lexi’s spouse

$200 for prescription medication for Lexi

$8,000 for funeral expenses for her spouse

Lexi sold some of her used designer clothing through an online marketplace. She received Form 1099-K reporting the $500 sale. She originally paid $1,500 for the clothing.

Lexi and Lester are U.S. citizens with a valid Social Security numbers.

Scenario 3: Retest Questions

6. Lexi’s standard deduction for 2024 is

a. $0

b. $14,600

c. $21,900

d. $29,200

7. Of Lexi’s Form 1099-SA amount, $8,000 is taxable because funeral costs are not qualified medical expenses.

a. True

b. False

8. One requirement to make a qualified tuition program rollover to an IRA is that the section 529 account must have been open for more than 15 years.

a. True

b. False

9. What amount from Form 1099-K must Lexi include in income on her federal income tax return?

a. -$1,000

b. $0

c. $500

d. $1,500

Scenario 4: Siena King

Directions

Refer to the scenario information for Siena King.

Scenario 4: Retest Questions

10. Since Siena was divorced before the end of 2024, her only allowable filing status is single.

a. True

b. False

11. Because she paid over half of her mother’s support, Siena can claim her as a dependent.

a. True

b. False

12. Which of Siena’s expenses may be deducted on Schedule C?

a. $350 for cleaning supplies

b. 1,250 miles driven between her home and the first and last cleaning job of the day.

c. $50 for parking tickets

d. $520 for snacks and lunches

13. For 2024, how much is Siena’s educator expense deduction? $_______

14. An eligible distribution to a domestic abuse victim must not exceed the lesser of $10,000 or 50% of the present value of the nonforfeitable accrued benefit of the employee under the plan.

a. True

b. False

15. Siena wants to eventually repay the amount she took as a distribution this year. She must make the repayment:

a. Before April 1, 2025

b. Before January 1, 2028

c. Any time during the 3-year period beginning on the day after the date on which the distribution was received.

d. The distribution is not eligible to be repaid.

2024 VITA/TCE Foreign Student Test for Volunteers

Welcome to the Link & Learn Taxes Foreign Student Test. The test requires you to prepare four tax returns using Form 1040-NR and/or Form 8843 and then answer 50 online questions. You must successfully complete the test at an overall 80% proficiency to earn VITA/TCE certification.

Please complete this test on your own for an accurate assessment of your skills and knowledge. You may use any reference materials available to you as a volunteer to complete this test.

Residency Status, Form 8843, and Filing Status

Introduction

This section of the VITA/TCE certification Foreign Student test covers determining residency status, the use of Form 8843, and filing status. It consists of 13 true/false questions and 4 scenario-based multiple choice questions.

Allow approximately 20 minutes to complete this segment.

1. Maylor entered the U.S. on July 30, 2021 as a student in F-1 immigration status. He had never been to the United States before and he did not change immigration status during 2024. For 2024 federal income tax purposes, Maylor is a resident alien.

a. True

b. False

2. Amelia is a visiting professor at the local university. Amelia was a graduate student from June 2020 to May 2022 in F-1 immigration status. She re-entered the United States as a teacher on December 20, 2023 in J-1 immigration status. For 2024 federal income tax purposes, Amelia is a ________.

a. Nonresident alien

b. Resident alien

3. Lucas was a student in F-1 immigration status from December 2015 through June 2023. In August of 2024, Lucas returned to the United States as a graduate student. For 2024 federal income tax purposes, Lucas is a ________.

a. Resident alien

b. Nonresident alien

4. Antonio came to the United States in F-2 immigration status with his wife on July 15, 2020. He has not changed his immigration status. For 2024 federal income tax purposes, Antonio is a ________.

a. Resident alien

b. Nonresident alien

5. Anne was in the U.S. as a child in J-2 immigration status with her parents from 2012 through 2015. She re-entered the U.S. in 2023 as a student in J-1 immigration status. The time she was present in the U.S. as a child is considered when determining her total number of years with exempt days.

a. True

b. False

6. Janice entered the United States on August 1, 2020 in J-1 student immigration status. On August 10,2023, her husband Rick joined her in J-2 immigration status. Janice and Rick had no income in 2024. Are Janice and Rick required to file any form(s)?

a. Yes, Form 8843

b. No, no forms required

c. Yes, 1040NR and Forms 8843

d. Yes, 1040 filing married filing jointly

7. Janice and Rick from Question 6 have twins prior to entering the US. For 2024, how many Form(s) 8843 does Janice’s family need to file?

a. 1

b. 2

c. 3

d. 4

8. Jocelyn and Connor have been in the U.S. in F-1 immigration status, since July, 2018. Their 12-year old daughter Arya, has been attending boarding school since June, 2017 on F-1 immigration status. For 2024, who must file Form 8843?

a. Arya

b. All three of them

c. None of them

d. Jocelyn and Connor

9. Ayesha is from Pakistan and is a Ph.D. student in cyber security who is going to defend her dissertation in June 2025. She arrived in the U.S. as a student in F-1 immigration status on June 30, 2021. For 2024 federal income tax purposes, is Ayesha a nonresident alien?

a. Yes

b. No

10. Klaus is a junior majoring in marine biology. He is in the U.S. as a student in F-1 immigration status from Germany. He transferred from a German university and arrived in the U.S. on April 15, 2021. Klaus worked in a lab on campus and as a summer intern for a company in New York. He will graduate in May 2025. For tax purposes, Klaus is considered a ___________.

a. Resident alien

b. Nonresident alien

11. Cyriltavo is a nursing student from Greece who first arrived in F-1 immigration status on August 15, 2024. He did not work or receive a scholarship in 2024, but had $100 interest income from his U.S. savings account his parents set up for him to pay for school and his living expenses. Cyriltavo must file Form 1040-NR for 2024.

a. True

b. False

12. Orlando entered the U.S. in J-1 immigration status as a trainee in January 2023 and lives alone. His wife, Bey, could not accompany due to on-going health concerns. Orlando must file as a______________even though his spouse was not present in the U.S.

a. Single

b. Qualifying Surviving Spouse (QSS)

c. Married Filing Separately (MFS)

13. Tomas and Olga were married in March 2020. The next year, they both entered the U.S. in F-1 immigration status to complete their studies as Fulbright scholars. Currently, Tomas lives in San Diego where he is completing his graduate work. However, Olga left him in March 2024 and has not been heard from since. Her parents will not tell him where she lives. Although Tomas does not know Olga’s whereabouts, he still must file as Married Filing Separately (MFS).

a. True

b. False

Scenario 1: Gabriel Alvarez

Use the following information to prepare Form 8843.

Gabriel Alvarez came to the U.S. to study on August 1, 2021, in F-1 immigration status. His passport number is 4682936 and it was issued by his home country, Peru. His home address is 31 Rue de Santos, Lima, 07001, Peru. His address at school is Stanford University, 450 Jane Stanford Way, Stanford, CA 94305. His U.S. taxpayer identification number is XXX-XX-XXXX.

Gabriel is attending Stanford University, 450 Jane Stanford Way, Stanford, CA 94305, telephone 612-555-XXXX. His specialized program is Alternative Fuel Systems and the director is Professor Marri M. Young, also at 450 Jane Stanford Way, Stanford, CA 94, telephone 612-555-XXXX ext. 1267.

Gabriel has not taken steps to apply for permanent residency. Gabriel had no income, so he is not required to file any other tax forms. Gabriel has not left the U.S. since arriving.

After completing the required tax form, review the scenario and resource materials, and answer each of the test questions

Scenario 1: Gabriel Alvarez Test Questions

To answer the following multiple choice questions, refer to the Form 8843 you completed for Gabriel Alvarez.

14. Gabriel reports his most current nonimmigrant status on line 1a.

a. True

b. False

15. Gabriel should put 365 days on line 4b, for days of exempted presence for 2024.

a. True

b. False

16. What parts of Form 8843 does Gabriel need to complete?

a. Part I

b. Parts I and III

c. Parts I and II

d. Part II

17. Gabriel must submit his Form 8843 for tax year 2024 by April 15, 2025?

a. True

b. False

Taxability of Income, ITINs, and Credits

Introduction

This segment of the VITA/TCE certification test includes 7 general and 14 scenario-based multiple choice questions on taxability of income, ITINs, and credits.

Allow approximately 45 minutes to complete this segment.

18. Jenna, who is a nonresident alien and is in the United States in J-1 immigration status, spent $4,400 on qualifying education expenses. She is eligible to claim an education credit on her tax return.

a. True

b. False

19. Lacey received $100 of dividend income on U.S. stocks she purchased online. She is an international student from Canada in F-1 immigration status. She arrived in the United States in 2023. How much of Lacey’s dividend income will be taxed at 30%?

a. $0, it’s taxed at the ordinary rate

b. $0, Per Publication 4011, the correct tax rate is 15%

c. $100

20. Tonya and Paul are a married nonresident alien couple from France. Both are in the U.S. in F-1 immigration statuses and arrived in 2024. They paid $3,700 in childcare expenses, while attending school, for their child who was born in the United States and is a U.S. citizen. They are eligible to claim the child and dependent care credit on their Form 1040-NR.

a. True

b. False

21. Jaden is a student in J-1 immigration status from Latvia. He earned $2,300 in wages in 2024. His wages are reported to him on Form 1042-S (Box 1, Income Code 20). Should Jaden report his wages on Form 1040-NR, Schedule OI?

a. Yes

b. No

22. Cyril is a student in the U.S. in J-1 immigration status as of October 15, 2024. Under the terms of his visa, he is permitted to work in the U.S. Cyril qualifies for a Social Security number and should not apply for an ITIN.

a. True

b. False

23. Mihaela, a student in F-1 immigration status from Slovenia, is on the tennis team. Mihaela arrived in the U.S. on July 20, 2024 on a full athletic scholarship that includes $8,000 for room and board and $28,000 for tuition and fees. What amount will be taxable on Mihaela Form 1040-NR?

a. $36,000

b. $28,000

c. $8,000

d. $0.00

24. Stefan is a student in the U.S. in F-1 immigration status. Stefan arrived from Germany on August 5, 2022. Stefan worked in the bookstore and earned $3,200 in wages and had federal income tax withholding of $330. Stefan is only required to file Form 8843 for 2024.

a. True

b. False

Scenario 2: Kim Lee

Use the following information to prepare Form 1040-NR.

Kim Lee, a citizen of South Korea, came to the United States in F-1 immigration status (number 3344123344) on January 01, 2024.

He has remained in the country since then and is a full-time student at the local university. Kim, born July 25, 2001, is single. He began working at the university on February 10, 2024.

He filed the proper withholding and treaty forms with the university payroll office before beginning his job. Since filing these forms correctly, he received a Form 1042-S for the treaty benefit for his wages. Kim was not in the U.S. before and therefore, has not filed an U.S. tax return in any prior year.

Kim also received a scholarship from the university he was attending. He filed the appropriate forms to claim his treaty benefit for the scholarship. Therefore, he received a Form 1042-S.

Kim’s address in South Korea is Bldg. 102 Unit 304, Sajik-ro-3-gil (Street) 23, Jongno, Seoul (South Korea) 30174. If he is entitled to a refund, he wants a direct deposit to his checking account. The routing number is 123456789 and the account number is 98765432100. He doesn’t want to designate anyone to discuss his return with the IRS. He did not take any affirmative steps to apply for permanent residence in the U.S. Kim’s U.S. income will not be taxed in his home country.

Using the following information (two Forms 1042-S and a Form W-2), complete Kim’s federal income tax return. (Kim would also need to file Form 8843, but assume that he has already completed that on his own.)

After completing the required tax form, review the scenario and resource materials, and answer each of the test questions.

Forms W2 & 1042-S, Page 1

Form 1042-S, Page 2

Scenario 2: Kim Lee Test Questions

Directions

To answer the following multiple choice questions, refer to the Form 1040-NR you completed for Kim Lee.

25. Is $8,500 the amount entered on the line for Total amount from Form(s) W-2, box 1 on Form 1040-NR?

a. Yes

b. No

26. Is $8,500 the amount of adjusted gross income on the Form 1040-NR?

a. Yes

b. No

27. What is the amount of Itemized deductions on the Form 1040-NR?

a. $0.00

b. $80

c. $800

d. $880

28. Is $8,420 the amount for taxable income on the Form 1040-NR?

a. Yes

b. No

29. What is the total amount entered for Total income exempt by a treaty from Schedule OI?

a. $0

b. $2,000

c. $6,000

d. $8,000

Scenario 3: Amar Pavan

Use the following information to prepare Form 1040-NR.

Amar Pavan, a citizen of India, came to the United States as a student. He entered in F-1 immigration status (visa number 88779914) on September 1, 2021. He has remained in the country since then and is a full-time student at the local university.

Amar was born on July 30, 2000, and is single. He filed the proper treaty and withholding forms with the university payroll office. Amar has filed a U.S. tax return Form 1040-NR for 2023. His address in India is B block, GK II, New Delhi – South, Delhi NCR, India.

If he is entitled to a refund, he wants it mailed to him. He doesn’t want to designate anyone else to discuss his return with the IRS. Amar has not taken any steps to apply for permanent residence in the U.S.

He will not be taxed in his home country on the income he has from the U.S. Using the following Form W-2, prepare Amar’s federal income tax return. (He has already completed his Form 8843.)

Amar received $25 in bank interest from an account he opened with money from his parents, this money is not connected with a U.S. trade or business.

He owed additional State Income tax when he filed his taxes last year. He mailed a payment of $85 on April 1, 2024 to his state.

He donated $200 to the American Red Cross as a charitable contribution.

He also donated $1,000 cash to his church but has no record.

After completing the required tax form, review the scenario and resource materials, and answer each of the test questions.

Scenario 3: Amar Pavan Test Questions

Directions

To answer the following questions, refer to the Form 1040-NR you completed for Amar Pavan.

30. What is the Adjusted Gross Income (AGI) on Form 1040-NR?

a. $12,400

b. $25,800

c. $27,000

d. $27,025

31. Amar Pavan is a student who is considered a resident of India. According to the U.S.-India Tax Treaty, he can take the standard deduction instead of itemizing.

a. True

b. False

32. Amar will have a refund on Form 1040-NR?

a. True

b. False

33. The taxable income line on Amar’s Form 1040-NR shows $25,800.

a. True

b. False

Scenario 4: Sonya Ivanov

Use the following information to prepare 2024 Form 1040-NR.

Sonya Ivanov is a resident of Bulgaria (visa number 38755219). She arrived in the United States in F-1 immigration status on September 1, 2022 as a full-time student. Sonya is 25 years old, single, born on July 11, 1998. Her address in Bulgaria is Vna 74117 Varna, Grand Mol Varna, 9021 Bulgaria.

Sonya has not taken any steps to apply for permanent residence in the United States. Sonya did not file a Form 1040-NR in 2023 as she did not work that year. She started a new job with the university bookstore on January 20, 2024.

If she is entitled to a refund, she wants a direct deposit to her checking account. The routing number is 789654321 and the account number is 011233456789. She will not be taxed by the Bulgarian government on the income she has earned in the United States. Assume Sonya has already completed her Form 8843, and prepare her federal income tax return with the following Form W-2. College Town University reports all student income on Form W-2. Miss Ivanov failed to respond to the university in time for them to properly issue Form 1042-S for her treaty-exempt income. However, she is still entitled to take her treaty benefit on her tax return instead.

After completing the required tax form, review the scenario and resource materials, and answer each of the test questions.

Scenario 4: Sonya Ivanov Test Questions

Directions

To answer the following multiple choice questions, refer to the Form 1040-NR you completed for Sonya Ivanov.

34. Sonya is allowed to exclude all of her wages as a treaty benefit on Schedule OI?

a. True

b. False

35. The total amount of the W-2, box 1, wages, salaries, tips, is reported on the Total amount from Form(s) W-2, box 1 line of the Form 1040-NR.

a. True

b. False

36. Form 1040-NR, schedule OI, line G shows Sonya’s treaty benefit information.

a. True

b. False

37. Sonya’s itemized deductions is $0.00?

a. True

b. False

Refunds, Deductions, and the Best Form to Use

Introduction

This part of the VITA/TCE certification test includes 13 true/false or multiple choice questions.

Allow approximately 20 minutes to complete this segment.

38. Erin, an international student from Ireland, has a Form W-2 that shows amounts withheld for Social Security and Medicare taxes. Erin is an F-1 student who first arrived in the U.S. in 2020. Can she file Form 843 to receive a refund of these taxes?

a. True

b. False

39. Jorge and Marta are from Mexico. Jorge is a scholar at a local university in J-1 immigration status and Marta is in J-2 immigration status. Marta worked at a local boutique in 2024. Her Form W-2 shows Social Security and Medicare tax withholding, while Jorge’s does not. Marta is entitled to the exclusion of Social Security and Medicare tax withholding as a spouse.

a. True

b. False

40. Li, an international student from People’s Republic of China, received $10,100 of interest income in 2024 from a personal bank account in the U.S. he opened when he first arrived on August 27, 2021. He also had a $100 capital gain from some U.S. stock he sold. Li reports the stock sale on Schedule D.

a. True

b. False

41. Jackson entered the United States for the first time in 2022. He is a resident of France and is in F-1 immigration status. Jackson won $1,200 at the local casino. Jackson will report the $1,200 on Schedule NEC.

a. True

b. False

42. Maylor is a visiting scholar from Ireland. He arrived in the U.S. on September 1, 2023 in J-1 immigration status and was accompanied by his wife and son. They had a second child in 2024, born in the U.S. Maylor is required to file a federal income tax return. When he files his federal tax return, he cannot claim his wife and children as dependents.

a. True

b. False

43. Gilberto, a graduate student from Germany, is in F-1 immigration status. He has been here since April 1, 2024. He has receipts for his donations to his church in Germany as well as donations made to a U.S. charity. Gilberto can claim all his charitable contributions as an itemized deduction on Form 1040-NR.

a. True

b. False

44. Aretha is in F-1 immigration status from Chile. She entered the United States in August 2020 and enrolled as a full-time undergraduate student. Aretha is pursuing her first degree in mathematics. Aretha qualifies for the American opportunity credit.

a. True

b. False

45. Jenna is a single, nonresident alien who began studying in the U.S. in 2020 in F-1 immigration status from Ecuador. She has wages of $9,300, interest income from her savings account of $175, $50 of dividends, and sold $4,500 of U.S. stocks for a $250 capital gain. She donated $50 of the proceeds to a local charity. Jenna cannot have her return prepared at any Foreign Student and Scholar VITA site, because she has capital gain income.

a. True

b. False

46. Some students and scholars may owe money with their tax return. Generally, nonresidents have the option to set up an installment agreement.

a. True

b. False

47. Dmitry, who is from Russia, earned wages of $12,335 in 2023. He had $280 withheld for state income taxes. He listed the state taxes as a deduction on his federal tax return in 2023 which lowered his taxable income. Dmitry received a state refund of $200 in 2024 from the 2023 tax return. Will Dmitry report his state tax refund as income on his Form 1040-NR in 2024 or amend his 2023 return?

a. He needs to include the state income tax refund on his 2024 federal return.

b. He will remove the $125 state taxes from his 2023 deductions with an amended return.

c. He does not need to do anything with his state income tax refund.

48. Brunilda came to the U.S. in 2022 for postgraduate study. She took out a student loan to help pay the tuition through her school’s financial aid office. Brunilda graduated in December 2023 but remained in the U.S. for one year of practical training. She began repaying the loan on August 1, 2024 and paid $65 in interest during 2024. Where can Brunilda claim this interest?

a. Itemized deduction

b. Credit

c. Adjustment to income

d. None of the above

49. Matteo, a student from Malta, had $8,500 in wages reported to him on Form W-2. Although all of his wages are excluded from tax by treaty, he is required to file a tax return.

a. True

b. False

50. Mustafa is a resident of Egypt attending college in the U.S. He arrived on J-1 immigration status in June of 2024. He had $15,800 in wages reported on Form W-2 and $39 in dividend income. Mustafa must complete both Schedules OI and NEC with his Form 1040-NR.

a. True

b. False

2024 VITA/TCE Foreign Student Retest for Volunteers

Directions

Welcome to the Link & Learn Taxes Foreign Student Retest. The retest requires you to prepare four tax returns using Form 1040-NR and/or Form 8843 and then answer 50 online questions. You must successfully complete the retest at an overall 80% proficiency to earn VITA/TCE certification.

Please complete this retest on your own for an accurate assessment of your skills and knowledge. You may use any reference materials available to you as a volunteer to complete this retest.

Volunteers who use tax preparation software to complete the retest need to make sure they are using the final 2024 version.

Residency Status, Form 8843, and Filing Status

Directions

This section of the VITA/TCE certification Foreign Student test covers determining residency status, the use of Form 8843, and filing status. It consists of 13 Resident/Nonresident questions and 4 scenario-based multiple-choice questions. Read the interview notes for each scenario from the original test.

Allow approximately 20 minutes to complete this segment.

1. Maylor entered the U.S. as a student on July 30, 2021 in F-1 immigration status. He had never been to the United States before and he did not change immigration status during 2024. For federal income tax purposes, Maylor is a resident alien for 2024.

a. True

b. False

2. Amelia is a visiting professor at the local university. Amelia was a graduate student from June 2020 to May 2022 in F-1 immigration status. She re-entered the United States as a teacher on December 20, 2023 in J-1 immigration status. For federal income tax purposes, Amelia is a nonresident alien for 2024.

a. True

b. False

3. Lucas was a student in F-1 immigration status from March 2020 through June 2023. On August 1, 2024, Lucas returned to the United States as a professor. For federal income tax purposes, Lucas is a nonresident alien for 2024.

a. True

b. False

4. Antonio came to the United States in F-2 immigration status with his wife on July 15, 2020. He has not changed his immigration status. For federal income tax purposes, Antonio is a resident alien for 2024.

a. True

b. False

5. Yvonne came to the U.S. on J-1 immigration status in July 2022 to teach for two years, starting in August 2022. For tax year 2024, she would be considered a resident alien for federal income tax purposes.

a. True

b. False

6. Janice entered the United States on August 1, 2020 in F-1 student immigration status. On August 10,2023, her husband Rick joined her in F-2 immigration status. Janice and Rick had no income in 2024. Since Janice and Rick are nonresident aliens with no income and no treaty benefits to claim, do they need to file Form 1040NR and Form 8843?

a. Yes, they need to file 1040NR and Form 8843

b. No, they only need to file Form 8843

c. No, they only need to file Form 1040NR

d. No, they do not need to file any forms

7. Janice and Rick from Question 6 had twins, Steven and Heather, while here in the U.S. on December 5, 2023. Does a Form 8843 need to be filed for the twins for 2024?

a. Yes

b. No

8. Jocelyn and Connor have been in the U. S. as students in F-1 immigration status since August 2018. Their 12 year old daughter Arya has been attending a boarding school in the U.S. since June 2017 in F-1 immigration status. Do Jocelyn, Connor and Arya need to file Form 8843 for 2024?

a. Yes

b. No

9. Ayesha is from Pakistan and is a Ph.D. student in cyber security who is going to defend her dissertation in June. She arrived in the U.S. as a student on June 30, 2021. Ayesha is a nonresident alien for tax purposes in 2024.

a. True

b. False

10. Klaus is a junior majoring in marine biology. He is in the U.S. as a student in F-1 immigration status from Germany. He transferred from a German university and arrived in the U.S. on April 15, 2021. Klaus worked in a lab on campus and as a summer intern for a company in New York. He will graduate in May 2025. Klaus is considered a nonresident alien for tax purposes.

a. True

b. False

11. Gustavo is a nursing student from Greece who first arrived in F-1 immigration status on August 15, 2024. He did not work or receive a scholarship in 2024, but had $100 interest income from his U.S. savings account his parents set up for him to pay for school and his living expenses.

Gustavo must file Form 8843.

a. True

b. False

12. Orlando entered the U.S. in J-1 immigration status as a trainee in January 2022, and lives alone. His wife, Bey, could not accompany him because of her ongoing health condition. What is Orlando’s filing status for 2024?

a. Single

b. Married Filing Separately

c. Qualifying Surviving Spouse

13. Tomas and Olga were married in March 2020, and the next year they both entered the U.S. in F-1 immigration status to complete their studies as Fulbright scholars. Currently, Tomas lives in San Diego, where he is completing his graduate work. However, Olga left him in March 2024 and has not been heard from since. Her parents will not tell him where she lives and he has not heard from her since. Since Tomas does not know Olga’s whereabouts what filing status can he use?

a. Single

b. Married Filing Separately

c. Qualifying Surviving Spouse

Scenario 1: Gabriel Alvarez Retest Questions

To answer the following questions, refer to the scenario information and Form 8843 you completed for Gabriel Alvarez.

14. What should Gabriel enter on Line 1a?

a. Leave blank

b. F1 August 1, 2021

c. F1

15. Gabriel has to complete Lines 4a and 4b.

a. True

b. False

16. Gabriel only has to complete Parts I and III of the Form 8843.

a. True

b. False

17. What is the due date of Gabriel’s Form 8843 for tax year 2024?

a. January 15, 2025

b. April 15, 2025

c. June 15, 2025

d. December 31, 2025

Taxability of Income, ITINs, and Credits

Introduction

This segment of the VITA/TCE certification test includes 7 general and 14 scenario-based multiple choice questions on taxability of income, ITINs, and credits.

Allow approximately 45 minutes to complete this segment.

18. Jenna, who is a nonresident alien and is in the United States in J-1 immigration status, spent $4,400 on qualifying tuition and educational expenses. She is not entitled to claim an education credit on her tax return.

a. True

b. False

19. Lacey received $100 of dividend income on U.S. stocks she purchased online. She is an international student from Canada in F-1 immigration status. She arrived in the United States in 2023. Lacey’s dividend income will be taxed at 15% on Form 1040-NR, Schedule NEC.

a. True

b. False

20. Tonya and Paul are a married nonresident alien couple from France. Both are in the U.S. in F-1 immigration statuses and arrived in 2024. They paid $3,700 in childcare expenses, while attending school, for their child who was born in the United States and is a U.S. citizen. They are not eligible to claim the child and dependent care credit on their Form 1040-NR.

a. True

b. False

21. Jaden is a student in J-1 immigration status from Latvia. He earned $2,300 in wages in 2024. His wages are reported to him on Form 1042-S (Box 1, Income Code 20). Jaden should report these wages on Form 1040-NR, Schedule NEC.

a. Yes

b. No

22. Cyril is a student here in J-1 immigration status as of October 15, 2024. Under the terms of his visa, he is permitted to work in the U.S. Cyril qualifies for a Social Security number and he should also apply for an ITIN.

a. True

b. False

23. Mihaela, a student in F-1 student immigration status from Slovenia, is on the tennis team. She arrived in the U.S. on July 20, 2024 on a full athletic scholarship that includes payments for her room and board. The amount of her scholarship for room and board is not taxable.

a. True

b. False

24. Stefan is a student in the U.S. in F-1 immigration status. He arrived from Germany on August 5, 2022. Stefan worked in the bookstore and earned $2,500 in wages and had federal income tax withholding of $215. Stefan needs to file Form 1040-NR and Form 8843 for 2024.

a. True

b. False

Scenario 2: Kim Lee Retest Questions

Directions

To answer the following questions, refer to the scenario information and Form 1040-NR you completed for Kim Lee.

25. What amount is entered on the line for Total amount from Form(s) W-2, box 1 on Form 1040-NR?

a. $2,000

b. $6,000

c. $8,500

26. What is on the line for adjusted gross income on Form 1040-NR?

a. $0

b. $2,000

c. $6,000

d. $8,500

27. What is on the line for Itemized deductions on Form 1040-NR?

a. $0

b. $80

c. $7,920

d. $8,000

28. What is the amount on the line for taxable income on Form 1040-NR?

a. $0

b. $1,920

c. $5,920

d. $8,420

29. Is $8,000 the total amount entered for Total income exempt by a treaty from Schedule OI?

a. Yes

b. No

Scenario 3: Amar Pavan Retest Questions

Directions

To answer the following questions, refer to the scenario information and Form 1040-NR you completed for Amar Pavan.

30. What amount is entered on the Total amount from Form(s) W-2, box 1 line on Form 1040-NR?

a. $12,400

b. $25,800

c. $27,000

d. $27,025

31. What amount is entered on the itemized deductions line on Form 1040-NR?

a. $0.00

b. $1,200

c. $14,600

d. $27,000

32. What is the amount of federal income tax withheld on Form 1040-NR?

a. $1,050

b. $2,700

c. $3,900

d. $3,985

33. What amount is on the taxable income line of the Form 1040-NR?

a. $0.00

b. $12,400

c. $25,800

d. $27,000

Scenario 4: Sonya Ivanov Retest Questions

Directions

To answer the following questions, refer to the scenario information for Sonya Ivanov.

34. What amount is Sonya allowed as a treaty benefit?

a. No limit for the treaty benefit amount

b. $0

c. $9,000

d. $18,000

35. What is the amount entered on Form 1040-NR on the line for Total amount from Form(s) W-2, box 1?

a. $0

b. $9,000

c. $18,000

d. $27,000

36. Where on the tax return will Sonya enter her treaty benefits information?

a. No treaty amounts are allowed without Form 1042-S.

b. Schedule OI, Line L then carried to Form 1040-NR, Line 1k

c. Treaty benefits are only subtracted from wages, salaries, tips, etc. and listed on Form 1040-NR, Line 1c.

d. Form 1040-NR, Schedule A, Line 7

37. What is the amount of itemized deductions that Sonya is entitled to take?

a. $0

b. $200

c. $1,500

d. $1,700

Refunds, Deductions, and the Best Form to Use

Introduction

This part of the VITA/TCE certification test includes 13 true/false or multiple choice questions.

Allow approximately 20 minutes to complete this segment.

38. Erin, an international student from Ireland, has a Form W-2 that shows amounts withheld for Social Security and Medicare taxes. Erin is an F-1 student who arrived in 2021. What form should Erin use to claim a refund of her Social Security and Medicare taxes withheld?

a. Form 1040

b. Form 1040 NR

c. Form 8843

d. Form 843

39. Jorge and Marta are from Mexico. Jorge is a scholar at a local university in J-1 immigration status and Marta is in J-2 immigration status. Marta worked at a local boutique in 2024. Her Form W-2 shows Social Security and Medicare withholding. Marta found out her spouse does not have to pay Social Security or Medicare taxes. Marta is not eligible for a refund of her Social Security and Medicare taxes withheld.

a. True

b. False

40. Li, an international student from People’s Republic of China, received $1,100 of interest income in 2024 from a personal bank account in the U.S. he opened when he first arrived on August 27, 2021. He also had a $100 capital gain from some U.S. stock he sold. Li reports the stock sale on Schedule B.

a. True

b. False

41. Jackson entered the United States for the first time in 2022. He is a resident of France, and in F-1 immigration status. Jackson won $850 at the local casino.

Does Jackson need to file Form 1040-NR to report the $1,850?

a. Yes

b. No

42. Maylor is a visiting scholar from Ghana. He arrived in the U.S. on September 1, 2023 in a J-1 immigration status and was accompanied by his wife Freya and his son Noah. Since his arrival, his second child, Charlie, was born in the U.S. Maylor earned $85,000 in 2024 from a State University. When he files his federal tax return, he can claim his wife and children as dependents.

a. True

b. False

43. Gilberto, a graduate student of physics from Germany, is in F-1 immigration status. He first arrived in the U.S. on April 1, 2024. Gilberto needs help preparing his 2024 tax return. He made donations to a U.S. charity as well as a church in Germany and wants to know where to claim them. Which of the following is a true statement?

a. Gilberto can claim all the charitable contributions as an itemized deduction on Form 1040-NR

b. Gilberto can only claim the charitable contributions from the U.S. charity as an itemized deduction on the Form 1040-NR

c. None of the above

44. Aretha is in F-1 immigration status from Chile. He entered the United States in August 2024 and enrolled as a full time undergraduate student. Aretha is pursuing his first degree in mathematics.

Does Aretha qualify for an Life Time Learning Credit?

a. Yes

b. No

45. Jenna is a single, nonresident alien who began studying in the U.S. in 2020 in F-1 immigration status from Ecuador. She has wages of $9,300, interest income from her savings account of $175, $50 of dividends, and sold $4,500 of U.S. stocks for a $250 capital gain. She donated $50 of the proceeds to a local charity. Could Jenna have her return completed at a VITA/TCE Foreign Student and Scholar VITA site that has properly certified volunteers?

a. Yes

b. No

46. Some students and scholars may owe money with their tax return. Nonresidents have which of the following payment options?

a. Ask for an extension of time to pay or an installment agreement.

b. Pay the entire balance by the due date for the return.

c. Put the balance on a credit card.

d. All of the above.

47. Viktor, who is from Russia, earned wages of $12,335 in 2023. He had $280 withheld for state income taxes. He listed the state taxes as a deduction on his federal tax return in 2023, and it lowered his taxable income for 2022. Viktor received a state refund of $200 in 2024 from the 2023 tax return. Viktor does not need to include this state tax refund on his 2024 federal return.

a. True

b. False

48. Brunilda came to the U.S. in 2022 for postgraduate study. She took out a student loan through the school’s financial aid office to help pay the tuition. She graduated in December 2023, but remained in the U.S. for one year of practical training. She began repaying the loan on August 1, 2024 and paid $65 in interest during 2024. Brunilda can claim this interest as an adjustment to income.

a. True

b. False

49. Matteo, a student from Malta, had $8,500 in wages reported to him on Form W-2. Because all of his wages are excluded from tax by treaty, he is not required to file a tax return.

a. True

b. False

50. Mustafa is a resident of Egypt attending college in the U.S. He arrived in J-1 immigration status in June of 2024. He had $15,800 in wages reported on Form W2 and $39 in dividend income.

What form/schedule(s) must Mustafa complete?

a. Just Form 1040-NR

b. Form 1040-NR, Schedule OI

c. Form 1040-NR, Schedules NEC and OI

d. Form 1040-NR, Schedule NEC

Over the Phone Interpreter Services Test Questions

Directions

Using your resource materials, answer the following questions:

1. After completing the Volunteer Standard of Conduct training, all VITA/TCE sites can take the SPEC OPI training.

a. True

b. False

2. All employees/partners must complete the annual SPEC OPI training.

a. True

b. False

3. OPI PINs can not be shared between VITA/TCE sites.

a. True

b. False

4. OPI Languages offered is in Publication _______.

a. 5889

b. 5634

c. 5633

d. 4012

5. SPEC OPI PINs for tax preparation are assigned by _____ .

a. area

b. site

c. coalition

6. OPI Pins can only be used at sites providing tax return preparation services.

a. True

b. False

7. VITA/TCE sites are required to submit their OPI logs weekly.

a. Noon- Monday

b. Close of business Monday

c. 10:00am on Tuesday

d. All of the above

8. All partners (new or existing) should attend OPI training each year.

a. True

b. False

9. OPI Services covers all aspects of the SPEC business model.

a. True

b. False

10. SPEC OPI training is Publication _____.

a. 5547

b. 4491

c. 5285

d. 5683

Over the Phone Interpreter Services Retest Questions

Directions

Using your resource materials, answer the following questions: Using your resource materials, answer the following questions:

1. SPEC OPI services are used only for tax return preparation.

a. True

b. False

2. Partners/sites are permitted to schedule an interpreter in advance.

a. True

b. False

3. OPI services include sign language services.

a. True

b. False

4. Sites are not required to use the SPEC OPI weekly log.

a. True

b. False

5. OPI services offer real-time interpretation services for several languages through virtual call centers.

a. True

b. False

6. After training, site coordinators with multiple sites can activate all needed OPI PINs with their relationship manager.

a. True

b. False

7. A call that does not connect with an interpreter should not be reported on the SPEC OPI weekly log.

a. Yes

b. No

8. SPEC OPI training is conducted annually.

a. True

b. False

9. Written authorization is needed to use OPI services for anything other than tax return preparation.

a. True

b. False

10. SPEC OPI services are available around the clock.

a. True

b. False

Notes

Notes

Notes

Link & Learn Taxes

Link & Learn Taxes is web-based training designed specifically for VITA/TCE volunteers. Each volunteer’s ability to prepare complete and accurate returns is vital to the credibility and integrity of the program. Link & Learn Taxes, as part of the complete volunteer training kit, provides the path to achieving this high level of quality service.

Link & Learn Taxes and Publication 4012, VITA/TCE Volunteer Resource Guide, work together to help volunteers learn and practice.

Link & Learn Taxes for 2024 includes:

Access to all VITA/TCE courses

Easy identification of the VITA/TCE courses with the course icons

As you progress through a lesson, the content for Basic, Advanced, Military, or International will display, depending on the level of certification you selected

PowerPoint presentations that can be customized to fit your classroom needs

VITA/TCE Central to provide centralized access for certification, training materials, and reference links

The Practice Lab

Gives volunteers practice with an early version of the IRS-provided tax preparation software

Lets volunteers complete sample practice problems

Lets volunteers prepare test scenario returns for the test/retest

Link and Learn Taxes logo on a computer screen
Go to www.irs.gov, type “Link & Learn” in the Keyword field and click Search. You’ll find a detailed overview and links to the courses.

FSA (Facilitated Self Assistance) empowers taxpayers to prepare their own returns with the assistance of a certified volunteer. Taxpayers complete their own returns using interview-based software supplied by leaders in the tax preparation industry. Volunteers assist taxpayers with tax law questions.

Virtual VITA/TCE model includes any site where face-to-face activities are not used during the tax preparation process. That is, the intake specialist, IRS-tax law certified preparer (who prepares the return) and/or the quality reviewer are not face-to-face with the taxpayer. By incorporating this flexibility partners can provide taxpayers with more convenient locations to file their taxes.

For more information contact your SPEC Relationship Manager to see if you should start a FSA or Virtual VITA site in your community.

IRS.gov

Your online resource for volunteer and taxpayer assistance

Partner and Volunteer Resource Center

www.irs.gov/Individuals/Partner-and-Volunteer-Resource-Center

What’s Hot!

Site Coordinator’s Corner

Quality and Tax Alerts for IRS Volunteer Programs

www.irs.gov/individuals/quality-and-tax-alerts-for-irs-volunteer-programs

Volunteer Tax Alerts

Volunteer Training Resources

www.irs.gov/Individuals/Volunteer-Training-Resources

Outreach Connection

www.irs.gov/Individuals/Outreach-Corner

Interactive Tax Assistant (ITA)

www.irs.gov/help/ita

Online Services and Tax Information for Individuals

www.irs.gov/Individuals

Tools

View Your Tax Account

Get Your Transcript

Where’s My Refund?

File your taxes

Special deadlines for taxpayers living overseas and some disaster victims

What to do if you haven’t filed your tax return

Filing past due returns

What you need to know before you file

Learn about electronic filing options, including IRS Free File

Get free tax help from volunteers

Find tips for choosing a tax professional

Avoid these common errors

Avoid penalty for underpayment of estimated tax

After you file your taxes

Pay taxes you owe, including estimated taxes

Not getting a refund? Learn how to pay taxes if you owe

Unexpectedly owe taxes? You may need to adjust your withholding

Refund you received different than expected?

Understanding your IRS notice or letter

Need to correct your taxes? Amend a tax return

Check the status of your amended return

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eBooks

Want to view our training products on your mobile or tablet devices? Click here to access our eBooks: www.irs.gov/individuals/site-coordinator-corner

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Another device to use for additional information is IRS2Go. Click here to download IRS2Go mobile app: www.irs.gov/newsroom/irs2goapp.

and much more!

Your direct link to tax information 24/7: www.irs.gov