2024 Vita Foreign Student Test – Retest Questions with Answers

2024 Forein Student Test/Retest Questions – Answers:

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

1 – 4 Scenarios Multiple Choice 14 – 50 Questions:

Scenario 1 Gabriel Alvarez – Interview Notes:

Use the following information to prepare Form 8843.

2024 RETURNS VITA Advanced Course Test/Retest with Interview Notes.

2024 Advanced Course Scenarios Test/Retest Questions – Answers with Solutions:

2024 Advanced Exam Score 100% Proof:

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 Sharon Smith – Test Questions:

1. Sharon qualifies for Head of Household filing status.
a. True ANSWER
b. False
2. Who qualifies to claim the Earned Income Credit (EIC) also known as Earned Income Tax Credit (EITC) for Lea?
a. Sharon ANSWER
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 ANSWER
b. False

Advanced Scenario 1 Sharon Smith – 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 ANSWER
2. Based on the information provided, Sharon qualifies for the Earned Income Credit.
a. True ANSWER
b. False
3. Sharon does not need to report her gambling winnings on her federal tax return.
a. True
b. False ANSWER

Advanced Scenario 2 Jeff and Jane Spring – Interview Notes:

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 Jeff and Jane Spring – 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 ANSWER
c. $3,000
d. $2,000
5. The Springs qualify for the Child and Dependent Care Credit
a. True
b. False ANSWER

Advanced Scenario 2 Jeff and Jane Spring – 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 ANSWER
5. Payments made to Jim can be claimed on Form 2441 as child and dependent care expenses.
a. True
b. False ANSWER
Question 4 Solution:
Child Tax Credit (partially refundable). The Child Tax Credit for 2024 is up to $2,000 per qualifying child. To qualify, a child must have a Social Security number. Be under age 17 at the end of 2024. Be claimed as a dependent on your tax return.
Question 5 Solution:
Can a family member get paid for childcare IRS?
Payments may be qualified childcare expenses if the family member babysitting isn't your spouse, the parent of the child, your dependent, or your child under age 19,
What is the child dependent care credit for 2024?
For 2024, the maximum eligible expense for this credit is $3,000 for one qualifying child and $6,000 for two or more.

Advanced Scenario 3 Mary Wood – Interview Notes:

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:
o $500 for nine visits to a physical therapist after her knee surgery
o $1,000 unreimbursed doctor bills
o $280 prescription medicine
o $1,500 replacement of a crown
o $300 deep cleaning for teeth
o $40 over the counter medication
o $260 gym membership (for her general health and fitness)
• Mary is a U.S. citizen with a valid Social Security number.

Advanced Scenario 3 Mary Wood – 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 ANSWER
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 ANSWER
8. What is the total unreimbursed qualified medical expenses reported on Form 8889, Part II?
a. $3,860
b. $3,620 ANSWER
c. $3,580
d. $3,320
Solution:
500 + 1000 + 280 + 1500 + 300 + 40 = 3620 and the ANSWER

Advanced Scenario 3 Mary Wood – 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 ANSWER
7. Mary cannot include her mother's contribution on Form 8889, Part I.
a. True
b. False ANSWER
8. The gym membership is a qualified medical expense for HSA purposes.
a. True
b. False ANSWER
Question 6 Solution:
For 2024, the annual contribution limits on deductions for HSAs for individuals with self-only coverage is $4,150 (increase of $300) and $8,300 for family coverage (increase of $550).
There is an additional contribution amount of $1,000 for taxpayers who are age 55 or older.

Advanced Scenario 4 Cheryl Brown – Interview Notes:

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 Chery Brown – 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 ANSWER
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. ANSWER

Advanced Scenario 4 Chery Brown – 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. ANSWER
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 ANSWER
b. False

Advanced Scenario 5 Elizabeth Greene – Interview Notes:

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:
o $9,500 hospital and doctor bills
o $600 contributions to Health Savings Account (HSA)
o $3,600 state withholding (higher than Elizabeth's calculated state sales tax deduction)
o $300 personal property taxes based on the value of the vehicle
o $600 friend’s personal GoFundMe campaign
o $350 cash contributions to the Red Cross
o $200 fair market value of clothing (in good used condition) donated to the Salvation Army (Elizabeth purchased the clothing for $900)
o $7,300 mortgage interest
o $2,300 real estate tax
o $1,500 homeowners association fees
o $4,000 gambling losses

Advanced Scenario 5 Elizabeth Greene – 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 ANSWER
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 ANSWER
d. $4,000

Advanced Scenario 5 Elizabeth Greene – 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 ANSWER
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 ANSWER

Advanced Scenario 6 David Stone – Interview Notes:

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 David Stone – Test Questions:

13. David is eligible to claim the American Opportunity Credit on his 2024 tax return.
a. True
b. False ANSWER
14. For which of the following IRA distributions will David owe an additional tax of 10%?
a. $2000 for tuition
b. $500 for emergency repairs
c. Both a and b
d. Neither a or b ANSWER

Advanced Scenario 6 David Stone – 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 ANSWER
b. False
14. David will owe an additional $50 tax on the $500 IRA distribution for emergency repairs?
a. True
b. False ANSWER
Solution:
IRS Retirement topics - Exceptions to 10% Additional Tax on Early Distributions:
You must file Form 5329 to report an exception to the 10% additional tax on an early distribution from a qualified retirement plan like IRA.

Exceptions to 10% Additional Tax on Early Distributions

Advanced Scenario 7 Vincent and Faith Hunter – Interview Notes:

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.

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.

2024 Advanced Scenario 7 Vincent and Faith Hunter – 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 ANSWER
d. $20,100.00
Solution:

1. Taxpayer Born 1964
2. Spouse Born 1955
3. Taxpayer’s Age 2024-1964=60
4. Spouse’s Age 2024-1955=69
5. Combine Age 69+60=129
6. Combine Age at 2021 Pension Start Date is 2024-2021=3 and 129-3=126

16. The Hunters are eligible to claim the credit for other dependents on their tax return.
a. True ANSWER
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 ANSWER
Solution for Other Income from Schedule 1:

1. $850 Cancelation of Debt +
2. $280 from Jury duty
3. $1,130 Total Other Income from Schedule 1

18. Vincent is eligible to deduct qualified educator expenses in the amount of $____________300.
(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 ANSWER
Solution:

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 ANSWER
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 ANSWER
d. $23,899
Solution:

2024 Social Security Benefits Worksheet - Lines 6a and 6b:

22. What is the Hunters' total federal income tax withholding?
a. $4,400
b. $5,210
c. $5,590
d. $7,600 ANSWER

2024 Advanced Scenario 7 Vincent and Faith Hunter – Retest Questions:

15. The taxable portion of Faith's pension from Liberty Enterprises using the simplified method is $23,899.
a. True
b. False ANSWER
16. Which of the following credits are the Hunters able to claim on their federal tax return?
a. American Opportunity Credit ANSWER
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 ANSWER
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 ANSWER
d. $844
19. The Hunters' standard deduction on their Form 1040 for tax year 2024 is $29,200.
a. True
b. False ANSWER
20. Which is not a qualifying expense for the American opportunity credit?
a. Tuition
b. Required course related books
c. Parking pass ANSWER
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 ANSWER
22. The federal income tax withholding reported on the Hunters' Form 1040 is $4,400
a. True
b. False ANSWER
Solution: 2390+2010+3200=7600 The total federal income tax withholding.

Advanced Scenario 8 Stephanie Winter – Interview Notes:

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:
o $150 for insulated box rental
o $50 for vehicle safety inspection (required by Fast Eats)
o $600 for Fast Eats fees
• Stephanie also kept receipts for the following out-of-pocket expenses:
o $80 for tolls while making deliveries
o $300 for speeding ticket
o $160 for Stephanie's lunches
• Stephanie’s record keeping application shows she has driven a total of 3,000 miles during and between deliveries.
o 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.

Advanced Scenario 8 Stephanie Winter – Intake/Interview Page 1, 2 and 3:

Advanced Scenario 8 Stephanie Winter – 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.

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 $______. 250 ANSWER
(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 ANSWER
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 ANSWER
26. What is the total standard mileage deduction for Stephanie's business on Schedule C?
a. $630
b. $1,965
c. $2,010 ANSWER
d. $8,040
Solution: 3,000 Miles x $0.67 = $2,010
27. The amount of Stephanie's lifetime learning credit is $480.
a. True ANSWER
b. False
Solution: 2400 x .20 = 480
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 ANSWER
d. $500
Solution:
$5,000 early distribution from IRA and used $2,400 to pay for education expenses so 5000-2400=2600 x 0.10=260 and the Answer.
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 ANSWER
b. False
Solution:
The Tax Withholding Estimator online tool helps taxpayers see if they may get a refund or need to make a payment directly to the IRS to avoid a tax bill and penalties next year.

Advanced Scenario 8 Stephanie Winter – Retest Questions:

23. Stephanie's net short-term capital gain reported on Schedule D is $350.
a. True
b. False ANSWER
24. Stephanie can claim her lunches as a business expense on her Schedule C.
a. True
b. False ANSWER
Solution:
For details on business expenses, see Pub. 334, chapter 8.
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 ANSWER
d. $3,750
Solution:
IRS Topic no. 456, Student loan interest deduction:
You may deduct the lesser of $2,500 or the amount of interest you actually paid during the year.
26. The total standard mileage deduction for Stephanie's business on Schedule C is $2,010.
a. True ANSWER
b. False
Solution:
3,000 Miles x $0.67 = $2,010

27. Which credit is Stephanie eligible for?
a. American Opportunity Credit
b. Earned Income Credit
c. Lifetime Learning Credit ANSWER
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 ANSWER
Solution:
IRA early distribution of $5,000 and used $2,400 of the IRA distribution to pay for educational expenses 5000-2400=2600 x 0.10=260.
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. ANSWER

Advanced Scenario 8 Stephanie Winter – Tax Return and Tax Supporting Documents:

Advanced Scenario 9 Joe Lopez – Interview Notes:

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 Joe Lopez – 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.

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) ANSWER
31. Joe adjusted gross income on his Form 1040 is _______.
a. $12,912
b. $42,000
c. $42,112 ANSWER
d. $42,140
Solution:
IRS adjusted gross income (AGI) on Form 1040 Line 11 is the total gross income from all sources minus adjustments.
32. Joe is eligible to claim the Child Tax Credit.
a. True ANSWER
b. False
Solution:
1. Who qualifies:
You can claim the Child Tax Credit for each qualifying child who has a Social Security number under 17 at the end of the tax year.
2. How to claim Child Tax Credit:
You can claim the Child Tax Credit by entering your children on Form 1040, and by attaching a completed Schedule 8812, Credits for Qualifying Children and Other Dependents.
33. Joe's retirement savings contributions credit is____.
a. $0 ANSWER
b. $100
c. $150
d. $1,500
Solution:
IRS Form W-2 Box 12a Code D for Retirement Plans: IRS W-2 Box 12a Code D for Retirement Contributions is used for 401(k) contributions. IRS 2024 Form 8880 Credit for Qualified Retirement Savings Contributions; You need to attach completed Form 8880 to Form 1040.
IRS no Error:
The answer a. $0 no error. The correct answer is a. $0.
2024 Saver's Credit if your AGI is more than $38,250 than there is 0% credit for your contribution for all Other Filers per IRS Table below.
IRS 2024 Saver’s Credit:
0% of your contribution for All other filers* (*Single, married filing separately, or qualifying widow(er)) if more than $38,250 of your AGI, see IRS Table below, and Joe’s AGI on Form 1040 Line 11 is equal to $42,112 therefore 0% credit, or no credit.

34. The total amount of Joe's net premium tax credit on Form 1040 Schedule 3, line 9 is $696.
a. True ANSWER
b. False
Solution:
The Premium Tax Credit is a refundable tax credit. IRS, you will need to complete Form 8962, Premium Tax Credit (PTC) and attach it to your tax return for the year.
35. Joe's child and dependent care credit from Form 2441 is _____. 630 ANSWER
(Note: whole number only, do not use special characters.)

Advanced Scenario 9 Joe Lopez – Retest Questions:

30. Joe can claim the Qualifying Surviving Spouse filing status.
a. True ANSWER
b. False
31. Joe's adjusted gross income is $42,140.
a. True
b. False ANSWER
32. Joe cannot claim which of the following credits on his tax return.
a. Child Tax Credit
b. Credit for Other Dependents ANSWER
c. Premium Tax Credit
d. Child and Dependent Care Credit
33. Joe qualifies to claim the Retirement Savings Contribution Credit.
a. True
b. False ANSWER
34. Joe's net premium tax credit on his Form 1040 Schedule 3, line 9 is $_______. 696 ANSWER
(Note: whole number only, do not use special characters.
35. Joe's child and dependent care credit is $630.
a. True ANSWER
b. False
Solution:
IRS How is the credit calculated?
The credit is calculated based on your income and a percentage of expenses that you incur for the care of qualifying persons to enable you to go to work, look for work, or attend school.
Joe's child and dependent care credit from Form 2441 is reported as a non-refundable credit on Form 1040, Schedule 3.
Paid $7,200 and only allowed $3000 Max for One Child.
Income from W-2 = $42,000
1040 Line 1 AGI $42,112 – Standard Deduction QSS $29,200 = $12,912.
Taxable Income $12,912 = Tax lability $1293.
2441 Line 8 .21 for AGI $42,112 x $3,000 = 630 ANSWER

Advanced Scenario 9 Joe Lopez – Intake/Interview Sheets:

2024 RETURNS VITA Puerto Rico Certification Course Test/Retest Level I and Level II with Interview Notes.

2024 Puerto Rico VITA Certification Test Level I:

2024 Puerto Rico Level 1 Test – 100% Pass Proof:

The first five questions are designed to measure key competencies, including how to figure the allowable portion of standard deductions to U.S. income. They also encourage use of your research tools.

Use Publication 4696 PR – VITA/TCE Puerto Rico Resource Guide and Publication 1321 Special Instructions For Bona Fide Residents Of Puerto Rico Who Must File A U.S. Individual Income Tax Return Form 1040 or Form 1040-SR to answer the questions.

2024 Pueto Rico Test Level I Test Questios – with Answers and Solutions:

Read each scenario carefully and use your reference materials Publication 4696 - VITA/TCE Puerto Rico Resource Guide and Publication 1321 Special Instructions For Bona Fide Residents Of Puerto Rico Who Must File A U.S. Individual Income Tax Return (Form 1040 or Form 1040-SR) to answer the questions. Round all fractions to four decimal places.

Using your resource materials, answer the following questions:

1.1 Lauren was a resident of Puerto Rico during 2024. She is single and under 65 years of age. She works as a U.S. government employee and her salary was $36,000. She also received income of $4,000 from a part-time job in Puerto Rico not subject to U.S. tax. Use the worksheet on page 3 in Publication 1321 to calculate the allowable portion of the standard deduction.
What is the allowable portion of the standard deduction that Lauren can claim?
a. $11,773
b. $13,140 ANSWER
c. $16,550
d. $20,800
Solution:

1.2 German and Elena were residents of Puerto Rico in 2024. They are both over 65 years old and file a joint return. German is retired from the U.S. Postal Service and Elena is retired from the U.S. Veterans Affairs. Their taxable pensions were $29,000 and $42,000, respectively.
What is German and Elena’s standard deduction?
a. $21,900
b. $29,200
c. $32,300 ANSWER
d. $35,100
Solution:

1.3 Marco is 40 years old, qualifies to file Head of Household, and a resident of Puerto Rico during 2024. He informed you that he received the following sources of income: $12,500 for a job he performed in the state of Florida; $23,200 received from the federal government for services performed in Puerto Rico. He also received $6,300 from a part-time job in Puerto Rico that is exempt from federal income tax. Use the worksheet on page 3 in Publication 1321 to calculate the allowable portion of the standard deduction.
What is the allowable portion of Marco’s standard deduction?
a. $14,600
b. $15,700
c. $18,615 ANSWER
d. $21,900
Solution:
$12,500 $23,200 = $35,700 + $6,300 = $42,000

1.4 Karina is a bona fide resident of Puerto Rico, who received Social Security benefits and pension income from the University of Puerto Rico. Does Karina have U.S. source income?
a. Yes, she has U.S. source income. ANSWER
b. No, she does not have U.S. source income
1.5 Angel is single and received unemployment benefits from the Puerto Rico Department of Labor reported on a Form 1099-G. What is the factor determining source of income for unemployment?
a. Residence of the payee
b. The location of the payer
c. Unemployment compensation is generally considered sourced where the taxpayer performed the underlying services ANSWER
d. None of the above

2024 Level I PR Test Scenario 1 – Isabel Acosta

Taxpayer Documents:
Completed Intake/Interview and Quality Review Sheet
Form 499R-2/W-2PR, Puerto Rico Withholding Statement
Interview Notes:
• Isabel Acosta is employed as an executive secretary.
• Isabel is divorced with two children. Cecilia is 7 years old and Lucas is 16 years old.
• Isabel paid all the cost of keeping up the home and more than half the support for her children.
• Social Security numbers: Isabel Acosta 133-00-XXXX, Cecilia Valentin, daughter, 599-00- XXXX and Lucas Valentin, son, 598-00-XXXX.
• If she is entitled to a refund, Isabel would like to receive it via direct deposit.
• Isabel has a checking account from Any Town Credit Union Account Number: 54321 Routing Number: 123456789
• Isabel has an Identity Protection Personal Identification Number (IP PIN): 987654.
2024 Level I PR Scenario 1 Isabel Acosta – Test Questions:
Based on the information provided by Isabel Acosta, complete Form 1040-SS or Form 1040-SS (SP) and the required forms and schedules to answer the following questions. You are a volunteer at site S21014444.
1.6 What is the amount of the Additional Child Tax credit on line 19, Part II, in Form 1040-SS (SP)?
a. $0
b. $3,000
c. $3,400 ANSWER
d. $3,596
1.7 What filing status can Isabel use?
a. Head of Household ANSWER
b. Married Filing Jointly
c. Married Filing Separately
d. Qualifying surviving spouse
1.8 Isabel can file Form 1040-SS (SP) or Form 1040-SS to claim the Additional Child Tax credit.
a. True ANSWER
b. False
1.9 The IRS issues an Identity Protection Personal Identification Number (IP PIN) to protect and confirm taxpayer identity when submitting a tax return. Should the IP PIN be included on the Form 1040SS or Form 1040-SS (SP)?
a. Yes ANSWER
b. No
1.10 Isabel can claim up to $1,700 per child or the Social Security and Medicare taxes withheld from her wages, whichever is lower.
a. True ANSWER
b. False

2024 Level I PR Test Scenario 2 – Luis Abreu and Astrid Sevilla:

Taxpayer Documents:
Completed Intake/Interview and Quality Review Sheet
Form 499R-2/W-2PR, Puerto Rico Withholding Statement
Interview Notes:
• Luis Abreu and Astrid Sevilla are married and bona fide residents of Puerto Rico.
• Luis Abreu and Astrid Sevilla SSNs are 581-00-XXXX and 582-00-XXXX respectively.
• Astrid is a housewife who did not receive income during the year.
• Luis is an accountant for the Puerto Rico Tourism Company; his wages for this year were $53,000.
• His contributions for the Social Security and Medicare were $3,286 and $768.50, respectively.
• They have two children under 17 and an older child Henry, who is permanently and totally disabled.
• Luis and Astrid would like a direct deposit to their checking account 57892; routing number 02190XXXX with Boricua Bank.
• Name Date of Birth Relationship Social Security Number
1. Edward Abreu 3-12-2017 Son 583-00-XXXX
2. Maria Abreu 3-12-2017 Daughter 584-00-XXXX
3. Henry Abreu 6-01-2005 Son 586-00-XXXX

Level I PR Test Scenario 2 Luis Abreu and Astrid Sevilla – Test Questions:
Based on the information provided by Luis Abreu and Astrid Sevilla, complete Form 1040-SS or Form 1040-SS (SP) and the required forms and schedules to answer the following questions. You are a volunteer at site S21014444.

If you are using the Link and Learn Taxes Practice Lab, when entering Social Security numbers (SSNs) or Employer Identification Numbers EINs), replace the Xs as directed, or with any four digits of your choice. In classroom situations, replace the Xs with the information provided by your instructor.
1.11 What filing status can Luis Abreu and Astrid Sevilla claim on their return?
a. Single
b. Married Filing Jointly ANSWER
c. Head of Household
d. None of the above
1.12 How many dependents are eligible for the Additional Child Tax Credit (ACTC)?
a. 0
b. 1
c. 2 ANSWER
d. 3
1.13 How much is the Additional Child Tax Credit that Luis and Astrid are entitled to receive?
a. $0
b. $3,200
c. $3,400 ANSWER
d. $4,055
1.14 The modified adjusted gross income for Luis and Astrid is within the income limit to claim the Additional Child Tax Credit.
a. True ANSWER
b. False
1.15 Which form should be completed by Luis and Astrid to claim the Additional Child Tax Credit?
a. Form 1040NR and Schedule 8812
b. Form 1040 SS and Schedule 8812
c. Form 1040 SS (SP) or Form 1040-SS ANSWER
d. Any of the above.

2024 Puerto Rico VITA Certification Test – Level II:

2024 Puerto Rico Level 2 Test – 100% Pass Proof:

The first five questions are designed to measure key competencies related to figuring the allowable portion of itemized deductions to U.S. income; calculating foreign tax credit; and determining the taxable portion of Social Security benefits.

Read each scenario carefully and use your reference materials Publication 4696 VITA/TCE Puerto Rico Resource Guide and Publication 1321 Special Instructions For Bona Fide Residents Of Puerto Rico Who Must File A U.S. Individual Income Tax Return) to answer the questions. Round all fractions to four decimal places.
2.1 Adan and Eva are both under age 65 and bona fide residents of Puerto Rico who file a joint return. Adan had received salary of $30,000 from his Puerto Rico sources. Eva works for the federal government and her salary was $45,000. Before calculating the allowable portion, they had the following eligible itemized deductions:
• Home mortgage interest: $6,000
• Real estate taxes: $400
• Charitable contributions: $700
What is the amount of calculated allowable itemized deductions that can be claimed?
a. $4,260 ANSWER
b. $7,100
c. $27,700
d. $29,200
Solution:
$45,000 Gov./$75,000 All sources=0.6 (3600+240+420=4260)
6000x0.6=3600
400x0.6=240
700x0.6=420
2.2 Calculate the allowable standard deduction for Adan and Eva (see exercise 2.1 above). Based on these calculations, the allowable standard deduction is higher than the allowable itemized deductions.
a. True ANSWER
b. False
Solution:
$29,200 Standard deduction Married filing jointly.
2.3 Franklin is a single taxpayer, 63 years old, and a bona fide resident of Puerto Rico with no dependents. Franklin received a Form SSA-1099, Social Security benefits, showing $31,000 in box 3. He did not receive any other income. Use Publication 4696 Social Security Benefits section as your reference materials. Is any part of his Social Security benefits subject to U.S. income tax?
a. Yes
b. No ANSWER
2.4 In 2024, Alex, 85 years old, resident of Puerto Rico, received $36,000 from his U.S. Civil Service pension. The benefits of this pension are attributed to a 25-year career with the federal government, in Puerto Rico.
Alex can claim a Foreign Tax Credit on Form 1040 for the income taxes paid to Puerto Rico.
a. True ANSWER
b. False
2.5 Santiago is single, 70 years old and received Form SSA-1099 for 2024, which shows benefits of $21,000 in box 5. He also received the following income during the year:

1. Taxable pension from the University of Puerto Rico of $37,000
2. Salary of $5,000 from a company in Puerto Rico
3. Taxable IRA distribution of $4,000 from a bank in Puerto Rico

Using Publication 915, Worksheet 1 and VITA/TCE Practice Lab https://vita. taxslayerpro.com/, what amount of his Social Security benefit is taxable to the United States?
a. $0
b. $10,500
c. $17,850 ANSWER
d. $21,000
Solution: $21,000x0.85=17,850

2024 Level II PR Test Scenario 1 – Andrea Gracia:

Taxpayer Documents:

1. Completed Intake/Interview and Quality Review Sheet
2. Form CSA 1099-R
3. Form SSA-1099

Interview Notes:
• Andrea Gracia is 70 and was born on January 2, 1954.
• Andrea’s SSN is 123-00-XXXX and her grandson Lucas Cruz’s SSN is 124-00-XXXX.
• Her grandson, Lucas, was born on July 23, 2008, has lived with her for the last three years and qualifies her to file as Head of Household.
• Andrea pays the total cost of keeping up a home for herself and her grandson.
• She does not want to contribute to the presidential election campaign.
• If a refund or balance is due, Andrea would like a direct deposit to or direct debit from her checking account 67890; routing number 021904512 with Coqui Credit Union.
• Her address and SSN are correct and were validated during the interview.
• Andrea is retired from the Civil Service Retirement System. She has a single life annuity and began receiving retirement benefits on January 5, 2010. The pension is attributed to services performed in New York. Andrea moved to Puerto Rico in 2010.
• Andrea receives Social Security benefits.
• According to the Simplified Method, Andrea can recover $2,667 of the cost of her pension tax free annually.

Taxpayer Documents:
Completed Intake/Interview and Quality Review Sheet:

2024 Level II PR Test Scenario 1 Test Questions – Andrea Gracia:

Please complete Form 1040, Publication 915, Worksheet 1, and the child tax worksheet to answer the following questions. You are a volunteer at site S21014444.

If you are using the Link & Learn Taxes Practice Lab (highly recommended), when entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. In classroom situations, replace the Xs with the information provided by your instructor.
2.6 After considering the cost recovery of tax free amount; what is the taxable portion of Andrea’s pension?
a. $0
b. $15,000
c. $31,833 ANSWER
d. $34,500
Solution for Question 6 (Numbers from Form 1099-R – Statement of Annuity Paid):

Solution for age at annuity starting date:
Andrea Gracia is 70 and born 1954, and Annuity start date was 2010. 2024 – 2010 = 14 and 70 – 14 = 56.
2.7 Can Andrea claim a foreign tax credit for the taxes paid to Puerto Rico on her pension attributed to services she performed in New York?
a. Yes
b. No ANSWER
2.8 What is the amount of Andrea’s standard deduction?
a. $5,050
b. $14,600
c. $16,650
d. $23,850 ANSWER
2.9 Andrea can claim the Child Tax Credit.
a. Yes ANSWER
b. No
2.10 The taxable amount of Andrea’s Social Security benefit (from the Publication\ 915 worksheet) is $9,543.
a. Yes ANSWER
b. No
Solution for Question 2.10:

Level II PR Test – Scenario 2 Test Questions
Complete the Form 1040, schedules, and worksheet based on the information provided by David and Aixa, complete Form 1040, the required forms and schedules to answer the following questions. You are a volunteer at site S21014444.
If you are using the Link & Learn Taxes Practice Lab, when entering Social Security numbers (SSNs) or Employer Identification Numbers (EINs), replace the Xs as directed, or with any four digits of your choice. In classroom situations, replace the Xs with the information provided by your instructor.
2.11 David and Aixa’ss total income shown on line 1a of Form 1040 is:
a. $0
b. $83,024 ANSWER
c. $85,749
d. $89,273
2.12 David and Aixa are eligible to claim which of the following non-refundable credits on their 2024 tax return?
a. Other Dependent Credit
b. Foreign tax credit
c. Child Tax Credit
d. All of the above ANSWER
2.13 What is the amount of Foreign Taxes that should be entered on line 8 in Form 1116?
a. $0
b. $2,750
c. $4,835 ANSWER
d. $ 4,900
2.14 Which of the following items are included in the total payments on David and Aixa’s tax return?
a. Federal income tax withheld from Form W-2
b. Additional child tax credit
c. Child Tax Credit
d. Both a and b ANSWER
2.15 What is the taxable income reported on Form 1040?
a. $0
b. $53,824 ANSWER
c. $59,212
d. $61,124