Question

Question 23 of 75. Realize our potential: H&R Block Which of the following tax benefits may reduce a taxpayer's tax liability below zero? Adjustment Deduction. Nonrefundable credit. Refundable credit. Time remaining 77:17 Mark for follow up Question 24 of 75. Review the following choices, then choose the only response that does NOT describe a due diligence requirement for an individual who is paid to prepare returns for taxpayers claiming the head of household filing status and/or one or more of the following credits: The Earned Income Tax Credit, the American Opportunity Credit, the Child Tax Credit/Additional Child Tax Credit, and the Other Dependent Credit. Complete all worksheets used to compute the credit and maintain copies of these worksheets. Require the taxpayer to provide documentation proving relationship to a qualifying child prior to claiming the related credit Maintain a copy of documents provided by the taxpayer used to determine eligibility for the credit. Record the date the information was obtained and the name of the person who provided the information. Make additional inquiries to determine if the taxpayer is eligible for the credit whenever information provided appears to be incorrect, inconsistent, or incomplete. Then, document both the questions asked and the responses provided

Answer 1

Ans 23

Ans Option D is correct becasue Refundable tax credit means you get a refund even if it is more than you owe. So, it can reduce a taxpayer's liability less than zero.

Whereas option C is incorrect because NON Refundable tax credit can only reduce your refund to zero but not less than that.

Option B is incorrect because Deduction are some amounts which can be deducted from our taxable incomes but upto a limited portion. So, this option is also not correct.

Adjustments are the amounts which can be adjusted in financial statements if they are omitted or allowed to be adjusted.So, ans option A is also not correct.

Ans 24

Ans Option B is correct for it because except ans Option B all other options describe a due diligence requirement.

The due diligence requirements are :

You most maintain a record of all your records of documents filled and copy of the Form 8867 and the worksheets used to determine credits.Record the date of original filling and due date of filling the returns . and if filled by other person or information provided by other person the name of that person should also be recorded. So, ans option C is incorrect.

Complete all worksheets used to compute credit and maintain copies of these worksheets.So, ans option A is incorrect.

ask additional questions make additional enquiries and document both questions and responses if the information seems incorrect, inconsistent, or incomplete.So, ans option D is also incorrect.

ANS 25

Ans Option C is correct.

Person who may be a qualifying child of a taxpayer claiming the Earned Income Tax Credit has to :

1) have a specific relationship with tax payer(son, daughter, brother, sister , grandchild or any other relative).

2)Child must meet age requirement, The child must be under the age of 19( or 24, if full time student), or permanently and totally disabled.

So, from the above we can say that only option C doesn't fullfil the conditions thus it is the correct option. Because in Option A and B both are full time student and under the age of 24 whereas in Option D it is fully and permanently disabled.

ANS 26

ANS Option A is Correct.

Additional Child Tax credit:It is a refundable portion of Child Tax Credit. It is claimed by person/familiy who owe IRS less than the qualified child tax credit. and according to the above question, this is the correct answer.

Itemized deduction:It reduces your taxable income with the actual tax relief of tax bracket in which you lie. So, ANS option B is incorrect.

Personal Exemption:it is an amount which a taxpayer can claim as a tax deduction against its personal income. So, ans option C is also incorrect.

Non Refundable Credit:nonrefundable tax credit means you get a refund only up to the amount you owe and not more than that. So, Pamelia can not qualify for any additional exemption under it. So, Ans Option D is also incorrect.