Federal Individual Tax Preparation and Preparer Due Diligence Practice Test
Build your confidence for Federal Individual Tax Preparation and Preparer Due Diligence. Practice the concepts, understand the answers, and strengthen your knowledge one question at a time.
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Questions cover federal individual return preparation, client intake, income items, deductions, credits, and preparer due diligence. This practice supports people building or checking their knowledge of tax preparation and the information needed to evaluate taxpayer scenarios. Administered by National Tax Practice Institute. Key domains include Business Entity Taxation and Reporting, Federal Tax Law and Compliance for Individual Taxpayers, IRS Representation, Ethics, and Professional Responsibility and Payroll, Self-Employment, and Estimated Tax Administration.
Sample Questions
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Devon has $13,000 of children's unearned income from a custodial brokerage account. The child is 16 and has no earned income. The client has both employee wages and a small side business reported on third-party forms. What special tax should be considered?
Casey is self-employed and reports $620 net profit for 2024; wage income is below the standard deduction and no federal tax was withheld. After a midyear change, the client says another preparer handled the return last year but cannot explain several carryovers. What filing requirement is triggered?
Finley, a cash-basis consultant, received a check dated December 30, 2025 for completed work but deposited it January 4. They also received a January electronic payment for December work. The client brought a prior-year return, a brokerage statement, and a handwritten mileage log. Which income item belongs on the {year} return?
Emery asks for an extension on April 12, 2025. They expect to owe tax for 2024 but cannot finish Schedule C records by April 15. The client asks for the fastest refund but also wants the return to survive an IRS notice. What should the preparer explain?
Ari's return includes a position supported by one aggressive blog post and no authority. The preparer knows the software will not flag it. After a midyear change, the client brought a prior-year return, a brokerage statement, and a handwritten mileage log. What should the preparer do?
Exam insights and study advice
Tax preparation depends on complete information and careful application of relevant rules. Reviewing intake and due diligence helps learners identify missing facts and questions that require further investigation.