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