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Tax Topic 5 - Tax and Homeowner Itemized Deductions

In this topic we will cover the the payment of taxes you can deduct. Usually, you are able to deduct income taxes, general sales taxes, real estate taxes, personal property taxes and foreign taxes paid. You will also become aware of which taxes you can deduct and which taxes you cannot. Interest is the amount you pay for the use of borrowed money. In this topic you will learn how to claim interest expenses on your tax return. The types of interest that you can deduct are home mortgage interest, and investment interest.

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Student Instructions:

Print this page, work on the questions and then submit test by mailing the answer sheet or by completing quiz online.

Instructions to submit quiz online successfully: Step-by-Step check list

Answer Sheet            Quiz Online

Most forms are in Adobe Acrobat PDF format. Get Adobe ReaderYou will need Adobe Reader to view and print these forms. If you do not already have Adobe Reader installed on your computer, you may download the software for free.

 

Use IRS Publication 514, IRS Publication 936, Publication 530, Form 1040 Instructions (Form 1040 instructions only up to page 98) and Schedule A (1040) instructions to complete this tax topic.

Please note: Form 1040 Instructions (Form 1040 instructions only up to page 98) will be used for the rest of the topics in the initial tax preparer certification course. You will be responsible to answer questions from the Form 1040 instructions booklet (up to page 98) on every topic so read it carefully.

Tax Return Situation 1:

Complete  a Schedule A. Then, fill out Form 1040. 

 
Home mortgage interest $13,000.00                                          
Real Estate Taxes $1,750.00
Personal Property Taxes (2 cars) $895.00 (this is the taxes part of the whole fee)

Juan Carlos is not married and has no children or other dependents.

All information is current in the following W-2s, including income and address information.

 

Tax Return Situation 2:

Complete a Schedule A for Nicolai Kerimov (Age 24, 515-24-1550).

Prepare a Federal Form 1040 for Nicolai. Get all basic information from the following W2, including income information.

He also has the following payments in 2013.
Home mortgage interest $9,622.00
County Property taxes $1,211.00
Car license tax (Includes only tax portion) $210.00

In addition to his earnings he had the following income:

Bank interest $290.00
Unemployment Compensation $545.00

Nicolai is not married and he has no children or other dependents.

Nicolai paid his mortgage interest for his home to:


Melvin R. Smitt
P.O. Box 70875
Eagle River, AK  99577
Social Security Number: 556-57-6811

Remember there is no 1098 issued and that mortgage interest was paid to an individual. 


 

1. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 7?

A. $27,714.
B. $32,143.
C. $11,400. 
D. $9,816.

2. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 22?

A. $12,961.
B. $27,714.
C. $4,000. 
D. $0.

3. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 38?

A. $28,143.
B. $32,143.
C. $27,714. 
D. $9,816.

4. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 40?

A. $9,530.
B. $20,849.
C. $16,026. 
D. $9,816.

5. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 41?

A. $9,530.
B. $11,688.
C. $7,294. 
D. $9,816.

6. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 43?

A. $7,888.
B. $9,763.
C. $319. 
D. $0.

7. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 46?

A. $31.
B. $788.
C. $400. 
D. $0.

8. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 61?

A. $530.
B. $763.
C. $788. 
D. $816.

9. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 62?

A. $451.
B. $430.
C. $1,400. 
D. $816.

10. Look at the Form 1040 you prepared for Juan Carlos. What is the amount on Form 1040, Line 76?

A. $930.
B. $261.
C. $337. 
D. $916.

11. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 7?

A. $25,526.
B. $29,763.
C. $11,400. 
D. $9,816.

12. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 19?

A. $530.
B. $964.
C. $545. 
D. $91.

13. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 22?

A. $9,530.
B. $29,763.
C. $29,064. 
D. $26,361.

14. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 37?

A. $10,078.
B. $26,361.
C. $11,400. 
D. $9,816.

15. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 40?

A. $11,539.
B. $10,078.
C. $18,986. 
D. $9,816.

16. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 41?

A. $9,530.
B. $18,491.
C. $14,822. 
D. $9,816.

17. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 43?

A. $15,186.
B. $11,022.
C. $11,400. 
D. $9,816.

18. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 55?

A. $1,219.
B. $1,791.
C. $1,841. 
D. $9,816.

19. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 62?

A. $530.
B. $1,491.
C. $1,502. 
D. $916.

20. Look at the Form 1040 you prepared for Nicolai. What is the amount on Form 1040, Line 74a?

A. $330.
B. $280.
C. $283. 
D. $121.

 

 
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Revised: 11/26/17