section 3

Certain taxpayers may be able to adjust their gross income on Schedule 1 (Form 1040), if they have qualified unreimbursed employee business expenses. If all requirements are met, which of the following taxpayers may NOT qualify for this adjustment?

1. Austin is a car salesman.

2. Jonathan is a performing artists.

3. Samantha is a disabled employee with impairment-related work expenses.

4. Victor is an Armed Forces reservists.

Taxpayers who take an early withdrawal from a savings account from a financial institution may be charged a penalty for the withdrawal. Which of the following statements is TRUE?

1. These early withdrawal penalties are never deductible.

2. These early withdrawal penalties may be reported in box 2 of Form 1099-DIV, Dividends and Distributions.

3. They may be entitled to a nonrefundable credit up to the amount of the penalty.

4. They may be entitled to deduct the penalties as an adjustment to income.

Which of the following statements is TRUE regarding the adjustment for student loan interest?

1. Allowed for taxpayers using the married filing separately filing status.

2. Limited to $2,000 per return.

3. Not allowed for loans from a related person.

4. Only allowed for loans used for education expenses of the taxpayer or spouse.

Which of the following individuals is an eligible educator and may deduct up to $250 of qualified educator expenses? (None of them received any reimbursements.)

1. Mr. Francis is a teacher's aide at the local high school. He taught part-time during the school year. He worked 600 hours. During 2021, he spent $300 on teaching supplies used in his classroom.

2. Mr. Lee is a fourth-grade teacher. He taught full-time in a classroom and worked more than 900 hours during the school year. During 2021, he spent $700 on teaching supplies used in his classroom.

3. Mrs. Sullivan is a professor at the local community college. She taught full-time during the entire school year. During 2021, she spent $500 on teaching supplies used in her classroom.

4. Ms. Rowling homeschools her three children. She spent $800 on books, computer software, and classroom supplies.