Greetings!
Happy Thursday!
First week of March! This Newsletter issue is out with renewed pages of our website including new packages of materials. The audio package is integrated with our start "3 Step System to Prepare the RTRP exam".
On the blog, weekly article post we continue on the topic of practice and procedures section of the IRS outline for RTRP competency exam.
Stay tuned and please share this Newsletter with your colleagues and friends.
Cheers
Norma Wahnon  |
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This series of articles opens with small pieces on the content of domain six of the IRS test specifications on practices and procedures. It includes a considerable variety a tax subjects to review for the exam. Safeguarding taxpayer information is the focus of part 4 of this article series. Don't miss it!!
Read it in 1040examprep blog.
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Mutiple Choice Practice QuestionItemized Deductions
Carter incurred the following expenses in the current year: $500 for the preparation of a personal income tax return, $100 for custodial fees on an IRA, $150 for professional publications, and $2,000 for union dues. Carter's current year adjusted gross income is $75,000. Carter, who is not self-employed, itemizes deductions. What will Carter's deduction be for miscellaneous itemized deductions after any limitations in the current year?
a. $0
b. $750
c. $1,250
d. $2,750
Solution:
Choice "c" is correct. Miscellaneous itemized deductions are deductible to the extent that such miscellaneous itemized deductions exceed 2% of Adjusted Gross Income (AGI).
AGI: $75,000 x 2%= $1500
Tax preparation: $500
Custodial Fees: $100
Publications: $150
Union Dues: $2,000
Total Misc. Deductions: $2,750
($1,500) 2% of AGI
$1,250 Allowable Misc. Deductions
(Source: Questions and answers published by AICPA) |
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Tax term definition section |
Tax term definition
"Who is a tax return preparer"
Tax return preparers are persons that participate in the preparation of tax returns for taxpayers, including but not limited to:
* Return preparers that are in business or hold themselves out as preparers
* Casual preparers that are compensated
* Electronic return originators
* Electronic return transmitters
* Intermediate Service Providers
* Software Developers
* Reporting Agents
The definition also extends to those that assist others in preparing returns or performing auxiliary services in connection with preparing returns, or are employed by preparers and perform auxiliary services in connection with the preparation of tax returns.This includes volunteer preparers that participate in programs like VITA and TCE.
(Source: IRS website) |
