1. Look at the Form 1040A you prepared for Henry Watts. What is the amount on Form 1040A, Line 30?

A. $408.
B. $338.
C. $70. 
D. $0.

2. Look at the Form 1040A you prepared for John Watson. What is the amount on Form 1040A, Line 37?

A. $293.
B. $223.
C. $70. 
D. $0.

3. If you were under age 65, to be a qualified individual for the credit for the elderly and the disabled you must have

A. Retired on permanent and total disability.
B. Received taxable disability income for tax year 2009.
C. Not have reached mandatory retirement age on January 1, 2009. 
D. All of the above.

4. If you and your spouse did not live in the same household at any time during the tax year, you are still able to take the credit for the elderly and the disabled and

A. You do not need to file a return.
B. You can file either joint or separate return.
C. You must file a joint return.
D. You must each file as single.

5. You can file as head of household and qualify to take the credit for the elderly and the disabled even if your spouse lived with you during the first 6 months of the year. Which of the following is not one of the tests that you need to meet?

A. You file a separate return.
B. You paid more than half the cost of keeping up your home during the tax year.
C. Your home was the main home of your child, stepchild, or eligible foster child for more than half the year.
D. Your child must pass the gross income test.

6. If you are under the age of 65, you can qualify for the credit for the elderly only if you are retired on permanent and total disability. You are retired on permanent and total disability if

A. You were permanently and totally disabled when you retired.
B. You retired on disability before the close of the tax year.
C. You have stopped working because of your disability.
D. All of the above.

7.  You are permanently and totally disabled if you

A. Cannot engage in any substantial and gainful activity because of your physical or mental condition.
B. Cannot sit or stand for a long period of time.
C. Cannot take care of your children because babysitting fatigues you.
D. None of the above.

8.  Alicia, a sales clerk, retired on disability. She is 57 years old and now works as a full-time babysitter for the minimum wage. Alicia

A. Cannot take the credit because she is able to engage in substantial and gainful activity.
B. Can take the credit because babysitting is not considered a real job and it is not a substantial and gainful activity.
C. Can take the credit because the minimum wage is not a substantial wage.
D. Can claim the credit because it does not matter that she works or not as long as she has retired on disability.

9. Certain work offered at qualified locations to physically or mentally impaired persons is considered sheltered employment. If a person that retires on disability accepted sheltered employment, this employment

A. Disqualifies him/her from any further disability benefits.
B. Disqualifies him/her from getting the credit for the elderly and the disabled.
C. Is proof of the person's ability to engage in substantial and gainful activity.
D. Is not proof of the persons ability to engage in substantial and gainful activity.

10. If you are under the age of 65, you must have a completed statement certifying that you were permanently and totally disabled on the date you retired. This statement must be completed and signed by

A. Your neighbor who knows you very well.
B. Your co-workers at the company you last worked for.
C. Your physician.
D. Your leader from your congregation who would not lie.

11. You should file a return to get a refund even if you are not otherwise required to file a return, if

A. Income was withheld from your pay.
B. You qualify for the earned income credit.
C. You qualify for the first-time homebuyer credit.
D. Any of the above.

12. If you are the owner of a traditional IRA, you must receive the entire balance in your IRA or start receiving periodic distributions from your IRA by April 1 of the year following the year in which you reach age

A. 70 1/2.
B. 65.
C. 55.
D. 45.

13. Before you can figure how much, if any, of your pension or annuity benefits are taxable, you

A. Must subtract any premiums.   
B. Must determine your cost in the plan.
C. Must determine your expenses.
D. Must determine all of the above.

14. To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that your receive from qualified retirement plans must begin no later than your required beginning date. Unless the rule for 5% owners applies, this is generally April 1 of the year that follows

A. The calendar year in which your reach age 70%.   
B. The calendar year in which you retire from employment with the employer maintaining the plan. 
C. The later of A and B above.
D. The earlier of A or B above.

15. The early distribution tax does not apply to any distributions that are

A. Made as part of a series of substantially equal periodic payments (made as least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary.  
B. Made because you are totally and permanently disabled. 
C. Made on or after the death of the plan participant or contract holder. 
D. Any of the above.

16. If the only income you received during 2009 was your social security or the SSEB portion of tier 1 railroad retirement benefits, your benefits generally are not taxable and your probably do not have to file a return.

True False

17. Generally, you must report as income any amount you receive for personal injury or sickness through an accident or health plan that is paid for by your employee. If both you and your employer pay for the plan,

A. Only the amount you receive that is due to your employer's payments is reported as income.
B. Only the amount you receive that is due to your payments is reported as income. 
C. Only the amount your receive that was not paid by your employer and your is reported as income. 
D. None of the above.

18. If you pay the entire cost of an accident or health plan, include amounts your receive from the plan for personal injury or sickness as income on your tax return.

True False

19. Do not report the 2009 sale of your main home on your tax return unless

A. You have a gain and you do not qualify to exclude all of it.
B. You have a gain and you choose not to exclude it.
C. Either A or B above.
D. You have a gain and you qualify to exclude all of it.

20. Your standard deduction is zero and you should itemize any deductions if

A. You are married and filing a separate return, and your spouse itemizes deductions.
B. You are filing a tax return for a short tax year because of a change in your annual accounting period.
C. You are a nonresident or dual-status alien during the year.   
D. All of the above.

21. Once you have a certification of your total disability on the date you retired, you must

A. Mail it in with your return.
B. Keep it for your records.
C. Make sure your preparer has a copy in his files.
D. Fax a copy to the IRS before you file your return.

22. If the Department of Veterans Affairs certifies that you are permanently and totally disabled, you can substitute the physician's statement you are required to keep with form

A. VA Form 21-0172
B. VA Form 27-0938
C. VA Form 59-6078
D. VA Form 01-0139

23. If you are under the age of 65, you can qualify for the credit only if you have taxable disability income. Disability income must meet which of the following requirement (s)?

A. It must be paid under your employer's accident or health plan or pension plan.
B. It must be included in your income as wages (or payments instead of wages) for the time you are absent from work because of permanent and total disability.
C. Both A and B are requirements to be met.
D. None of the above are requirements to be met.

24. For purposes of the credit for the elderly or the disabled, disability income does not include amounts you receive

A. Before you reach mandatory retirement age.
B. After you reach mandatory retirement age.
C. Before the age set by your employer at which you have to retire.
D. After you have become totally and permanently disabled.

25. To figure the credit for the elderly and the disabled use

A. Schedule R (Form 1040) or Schedule 3 (Form 1040A).
B. Schedule V (Form 1040) or Schedule 2 (Form 1040A).
C. Schedule A (Form 1040) or Schedule 1 (Form 1040A).
D. Schedule C (Form 1040) or Schedule B (Form 1040A).

26. If you want the IRS to figure your credit, attach Schedule R to your return and enter ___ on the dotted line next to line 48 of Form 1040 or attach Schedule 3 and enter ____ on line 30 of Form 1040A.

A. Please complete / Please complete
B. CFE / CFE
C. NAP / NAP
D. Prepare for me / Prepare for me

27. Jaime is 66 years old and Helen, his wife is 64. Helen is not disabled. Jaime files a joint return on Form 1040. His adjusted gross income is $11,630. Together, they received $3,200 from Social Security, which was non-taxable. The credit for the elderly or disabled was:

A. $5,000.
B. $7,500.
C. $3,200.
D. $0.

28. To determine if you can claim the credit for the Elderly or the Disabled, you must consider

A. Your gross income (AGI).
B. The amount of nontaxable social security.
C. Non-taxable pensions you received.
D. All of the above.

29. Susan, who retired on disability from her job as a payroll specialist, lives with her sister who manages several office units. Susan helps her sister for 1 or 2 hours a day by performing duties such as washing dishes, answering phones, reviewing tenant leases, and general clerical work. Susan can select the time of day when she feels most fit to work. Work of this nature, performed off and on during the day at Susan's convenience, is not activity of a "Substantial and gainful" nature even if she is paid for the work. However, the performance of these duties show that Susan is able to engage in substantial gainful activity.                 

True False

30. You must be a U.S. citizen or U.S. resident alien (or be treated as a resident alien) to take the credit for the Elderly or Disabled. You may be able to take the credit if you are a nonresident alien who is married to a U.S. citizen or resident alien at the end of the tax year and you and your spouse choose to treat you as a U.S. resident alien.                 

True False

31. You are considered to be age 65 on the day before your 65th birthday. therefore, you are considered to be age 65 at the end of 2009, if you were born on

A. January 1, 1945.
B. January 1, 1942.
C. January 1, 1944.
D. January 1, 1947.

32. For claiming the elderly credit purposes, substantial gainful activity in the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit.

True False

33. To determine if you can claim the credit for the elderly, you must consider

A. The amount of your adjusted gross income (AGI).
B. The amount of nontaxable social security and other nontaxable pensions you received.
C. Both A and B above.
D. None of the above.

34. If either your AGI or your nontaxable pensions are equal to or more than the income limits, you cannot take the credit for the elderly or the disabled.

True False

35. You should be sure to take into account all of the nontaxable amounts your receceive because these are verified by the IRS through information supplied by the government agencies.

True False

36. If you had a tax liability for 2009, you may have to pay estimated tax for 2010. Generally, you must make estimated tax payments for 2010 if you expect to owe at least __________ in tax for 2010 after subtracting your withholding and credits.

A. $1,000.
B. $1,500.
C. $900.
D. $1,200.

37. Estimated tax is a method used to pay tax on income that is subject to withholding.

True False