1. For tax years beginning after 2007 and before 2011, gross income

A. Includes rebates or reductions of property or income taxes provided by a state or local government for providing services as a member of a qualified emergency response organization.
B. Includes qualified payments made by a state or local government for providing services as a member of a qualified emergency response organization.
C. Does not include rebates or reductions of property or income taxes provided by a state or local government for providing services as a member of a qualified emergency response organization.
D. None of the above.

2. If you do not file your return by the due date (including extensions) you may have to pay a failure-to-file penalty. For income tax returns required to be filed after 2008, the failure-to-file penalty for returns more than 60 days after the due date is increased. In this situation, the minimum penalty is   

A. $135.
B. 100% of the unpaid tax.
C. The smaller of A or B above.
D. $100

3. For tax years 2009 and 2010, changes have been made to the American opportunity tax credit. The following is one of the these changes.

A. The maximum amount of the Hope credit increases to $5,500 per student.
B. The Hope credit can now be claimed only for the first two years of post-secondary education.
C. The term "qualified tuition and related expenses" has been expanded to include expenditures for "course materials".
D. All of the above.

4. For tax years 2009 and 2010, generally 40% of the Hope credit is now a refundable credit, which means that you receive up to _________ even if you owe no taxes.

A. $2,500.
B. $1,000.
C. $500
D. $100

5. Any economic recovery payment you receive during 2009 is taxable.  

True False              

6. The $250 economic recovery payments are being made to most people who

A. Receive social security benefits, supplemental security income (SSI), railroad retirement benefits or veteran disability compensation or pension benefits.
B. Live in a U.S. state, the District or Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, or the Northern Mariana Islands.
C. Both A and B above.
D. Apply for the credit.

7. Two new credits you may be able to take for 2009 are

A. The Hope credit and the American opportunity tax credit.
B. The Making work pay credit and the Government retiree credit.
C. The economic recovery credit and the Government retiree credit.
D. All of the above.

8. You may be able to take the Making work pay credit if you have earned income from work and

A. Your modified AGI is $95,000 ($190,000 if MFJ) or more.
B. You are a nonresident alien.
C. You can be claimed as a dependent on someone else's return.
D. None of the above
 

9. Even if your federal income tax withholding is reduced during 2009 because of the Making work credit, you must claim the credit on your return to benefit from it.  

True False

10. The Making work pay credit is 6.2% of your earned income but cannot be more than $400 ($800 if MFJ) and it will be reduced if                                         

A. You don't qualify for the government retiree credit.
B. You receive a $250 economic recovery payment.
C. Your modified AGI is not more than $25,000 ($50,000 if MFJ).
D. Any of the above.

11. To claim either the Making Work Credit or the Government retiree credit, you must include your social security number or the identification number issue by the IRS.

True False

12. Both the Making Work Pay credit and the Government retiree credits are refundable and generally you will use

A. Schedule M (Form 1040A or 1040).
B. Schedule L (Form 1040A or 1040).
C. Schedule C (Form 1040A or 1040).
D. Form 1040 alone to take the credits.

13. If you are filing Form 1040EZ, you can take the Making Work Pay credit on that form and you do not have to file Schedule M.  

True False

14. For any tax year beginning in 2009, each recipient of unemployment compensation can exclude for gross income up to ________ of the amount he or she received during the year.

A. $2,500.
B. $3,000.
C. $2,400.
D. $1,000.

15. The following change to the AMT went into effect for 2009.

A. Qualified motor vehicle tax is allowed against AMT.
B. The AMT exemption amount for a child has decreased.
C. The AMT exemption amount has decreased.
D. All of the above

16. Tax-exempt interest on specified private activity bonds issued in 2009 or 2010 is

A. An item of tax preference and therefore subject to the AMT.
B. Not an item of tax preference and therefore not subject to the AMT.
C. Not an item of tax preference and therefore subject to the AMT.
D. None of the above.

17. For 2009, a qualifying child is defined as

A. A child younger than you.
B. A child who does not file a joint return unless the return was filed only as a claim for refund.
C. A child you claim that is your child and if not your child, your AGI must be higher than the highest AGI of any parent of the child.
D. All of the above.

18. For 2009, your qualifying child for purposes of the child tax credit is a qualifying child only if you can and do claim an exemption for him or her.

True False

19. In 2009, you can deduct the state or local sales and excise taxes imposed on the purchase of a qualified motor vehicle after February 16, 2009, and before 2010.

True False

20. The definition of qualified higher education expenses for tax-free distributions fro a qualified tuition program is expanded to include amounts paid in 2009 or 2010 for the purchase of equipment that is to be used by the beneficiary and the beneficiary's family during any of the years the beneficiary is enrolled at an eligible educational institution. Such equipment as

A. Computer software.
B. Any computer or related peripheral equipment.
C. Fiber optic cable related to computer use, and internet access and related services.
D. Any of the above.

21. You may be able to claim a nonbusiness energy property credit of _______ of the cost of certain energy-efficient property or improvements you placed in service in 2009.

A. Zero percent (this credit expired in 2007).
B. 30%.
C. 20%.
D. 50%

22. The total amount of the nonbusiness energy property credit you can claim in 2009 and 2010 is

A. At least $1,500.
B. Limited to $1,500.
C. At least $3,000.
D. Limited to $1,000.

23. Beginning in 2009, there is no limitation on the residential energy efficient property credit amount for qualified solar electric property costs and for

A. Qualified solar water heating property costs.
B. Qualified small wind energy property costs.
C. Qualified geothermal heat pump property cost.
D. Any of the above.

24. Gain for the sale or exchange of the main home is no longer excludable for income if    

A. Allocable to periods of nonqualified use.
B. You and your spouse used the property as a man home.
C. The period includes any portion of a 5-year period ending on the date of sale or exchange that is after the last date you use the property as a main home.
D. The period includes any period during which you are serving on qualified official extended duty.

25. For 2009, the maximum amount of qualified long-term care premium you can include as medical expenses has decreased.

True False

26. For 2009, qualified individuals with small businesses may be eligible to make smaller estimated tax payments.

True False

27. In general, for 2008 and later tax years, you can deduct ______ of meal expenses while traveling away from your tax home for business purposes if the meals take place during or incident to any period subject to the Department of Transportation's "hours of service" limits.   

A. 80%.
B. 40%.
C. 50%.
D. 20%

28. To claim the Agricultural Chemicals Security credit, the following would be a qualified agricultural chemical security cost paid or incurred by an eligible agricultural business during the tax year to protect specified agricultural chemicals.

A. Employee security training and background checks.
B. Installation of security lighting, cameras, recording equipment, and intrusion detection sensors.
C. Implementing a site security plan.
D. Any of the above.

29. Generally, the Energy credit plan from the following has been extended through 2016.

A. Qualified fuel cell property.
B. Qualified microturbine property.
C. Solar energy property.
D. All of the above.

30. A new credit of _____ of the cost of a new plug-in electric vehicle can be claimed on Form 8834.

A. 20%.
B. 10%.
C. 50%.
D. 35%