Test Your Knowledge: Sample AITP Credential Questions

These sample questions are designed to give you a practical sense of the knowledge expected when preparing federal individual income tax returns and pursuing the Accredited Individual Tax Professional (AITP) credential.

The questions cover issues individual tax preparers may encounter in practice, including filing status, credits, health savings accounts, business income reporting and taxpayer data security.

Select the best answer for each question, then submit your responses to check your score.

Marisol has a 4-year-old U.S. citizen child who was legally placed in her home for adoption by an authorized placement agency. The adoption is not final. After making reasonable attempts, Marisol cannot obtain the child’s existing Social Security number (SSN), and the Social Security Administration will not issue a new SSN before Marisol must file her return. The child otherwise qualifies as Marisol’s dependent. Which identification procedure should Marisol use?

Apply for an adoption taxpayer identification number (ATIN) using Form W-7A, Application for Taxpayer Identification Number for Pending U.S. Adoptions. Apply for an individual taxpayer identification number (ITIN) using Form W-7, Application for IRS Individual Taxpayer Identification Number. File the return without a taxpayer identification number and attach the adoption placement agreement. File the return without claiming the child and wait until the adoption is final before requesting any taxpayer identification number.

Andrew and Monica provide more than half the support of their 20-year-old daughter, Paige, who is a full-time college student. Paige lives at college during the school year and returns to her parents’ home during school breaks. Paige and her spouse earned a combined $3,500 and filed a joint return solely to recover income tax withholding. Which statement is correct?

Paige cannot be a dependent because she is married. Paige can qualify only as a qualifying relative. Paige fails the residency test because she lived at college during the school year. Paige may be treated as Andrew and Monica’s qualifying child.

In 2026, Naomi receives Form 1099-G, Certain Government Payments, reporting a $1,200 state income tax refund related to her 2025 state income tax return. Naomi claimed the standard deduction on her 2025 federal income tax return. How should Naomi treat the refund for federal income tax purposes?

Exclude the refund from income because the related state income taxes did not produce a federal tax benefit. Include the entire refund as income because Form 1099-G reports the payment to both Naomi and the IRS. Include the refund as income to the extent it exceeds the state income tax Naomi pays during 2026. Subtract the refund from Naomi’s 2026 state and local tax deduction because it represents a recovery of state income taxes.

Devon receives land as a gift from an aunt. On the date of the gift, the aunt’s adjusted basis is $90,000 and the land’s fair market value (FMV) is $60,000. No gift tax is paid. Devon later sells the land for $75,000. What is the result?

Devon recognizes a $15,000 gain. Devon recognizes a $15,000 loss. Devon recognizes no gain or loss. Devon recognizes a $30,000 loss.

Priya owns a municipal bond as an investment. During the year, she receives $1,800 of tax-exempt interest and sells the bond for a $4,000 gain. How are these amounts generally treated for federal income tax purposes?

Both the interest and the gain are excluded from income. The interest is generally tax-exempt, but the $4,000 gain is taxable. The interest is taxable, but the gain is excluded. Both amounts are taxed as ordinary income.

During a 12-month period, Leon completes the following transactions: one IRA-to-IRA rollover in which Leon receives the funds and redeposits them within 60 days; one trustee-to-trustee transfer between traditional IRAs; and one direct rollover from a former employer’s 401(k) plan to a traditional IRA.

Which transaction counts toward the one-IRA-rollover-per-12-month limitation?

All three transactions Only the trustee-to-trustee transfer Only the direct rollover from the 401(k) plan Only the IRA-to-IRA 60-day rollover

Michelle closes a certificate of deposit (CD) before its maturity date. Her Form 1099-INT, Interest Income, reports $40 of interest in Box 1 and a $125 early withdrawal penalty in Box 2. What amount may Michelle claim as an adjustment to income for the penalty?

$0 $40 $125 $165

Rosa works as a counselor at a public high school. During 2026, she works 875 hours and pays $600 for unreimbursed materials used in student counseling programs. How much may Rosa claim as an educator expense deduction?

$0 $300 $350 $600

Andre itemizes deductions and has adjusted gross income (AGI) of $80,000. During the year, he pays $10,500 of qualified medical expenses and receives $2,000 of insurance reimbursements for those expenses. What is Andre’s medical expense deduction before considering his other itemized deductions?

$0 $2,500 $4,500 $8,500

Marcus and Elena file a joint return and have modified adjusted gross income (MAGI) below the education credits phaseout range. Elena is not pursuing a degree but takes one course at an eligible college to improve her job skills. They pay $8,000 of qualified tuition and have no tax-free educational assistance. What is the amount of the lifetime learning credit they may claim?

$0 $1,600 $2,000 $2,500

While Tasha works, her 10-year-old son attends a day camp for three weeks and an overnight camp for one week. Tasha pays $2,400 for the day camp and $1,800 for the overnight camp. She has sufficient earned income, and all other child and dependent care credit requirements are met. How much is treated as eligible dependent care expenses?

$0 $1,800 $2,400 Both amounts are taxed as ordinary income.

Avery and Jordan are married and jointly own and operate an unincorporated landscaping business. Both materially participate, and they elect to treat the business as a qualified joint venture rather than a partnership. How should they generally report the business?

Report all income and expenses on one Schedule C under the spouse with the higher ownership percentage. File Form 1065, U.S. Return of Partnership Income, and issue each spouse a Schedule K-1 (Form 1065). Divide the business items and report them on separate Schedules E. Allocate the business items between the spouses, with each filing a separate Schedule C and Schedule SE.

Before opening a consulting business, Jordan incurs $53,000 of qualifying start-up costs. Jordan begins business operations during the year and makes the proper election on a timely filed return. What is the maximum immediate start-up cost deduction?

$0 $2,000 $5,000 $53,000

In December, a cash-method landlord receives the following amounts from a new tenant: $1,800 for December rent, $1,800 as a refundable security deposit and $3,600 designated as rent for the final two months of the lease.

How much should the landlord generally include in rental income for the current year?

$1,800 $3,600 $5,400 $7,200

A client owes a practitioner $800 for prior tax preparation services. The client asks the practitioner to return the original Forms W-2 and 1099 previously provided because another preparer will complete the current return. What should the practitioner generally do?

Promptly return the client-provided records necessary for the client to meet federal tax obligations, despite the fee dispute. Retain all records until the client pays the outstanding balance. Provide only a written summary of the records and retain the original documents. Send the records directly to the IRS instead of returning them to the client.

12-15 correct: You’re ready to take the next step

You have a strong foundation in several key areas of individual tax preparation and may be ready to explore the AITP credential more seriously.

At this level, pursuing a credential is not just about learning more. It is about validating the knowledge you already use in practice and demonstrating your commitment to continued professional growth.

Next step: Learn more about the AITP credential, including exam details and optional study modules.

6-11 correct: You’re on the right track

You understand some important individual tax concepts, but there may be areas where additional review would help strengthen your confidence.

That is a good place to be. The AITP credential is designed for tax professionals who want to demonstrate core competency in federal individual tax preparation, and preparing for the exam can help you identify where to focus your learning.

Next step: Consider reviewing the AITP study modules to better understand the scope of topics covered.

0-5 correct: You’re building the foundation

These questions cover practical issues individual tax preparers may encounter when working with clients. If some of them felt unfamiliar, that is normal — and it may be a sign that structured professional development could be helpful.

The AITP credential can give you a clearer path for building knowledge and understanding what competency in individual tax preparation looks like.

Next step: Start by exploring the AITP candidate information and optional education options to see how the credential can support your growth.

Test Your Knowledge: Sample AITP Credential Questions

In 2026, Naomi receives Form 1099-G, Certain Government Payments, reporting a $1,200 state income tax refund related to her 2025 state income tax return. Naomi claimed the standard deduction on her 2025 federal income tax return. How should Naomi treat the refund for federal income tax purposes?

Devon receives land as a gift from an aunt. On the date of the gift, the aunt’s adjusted basis is $90,000 and the land’s fair market value (FMV) is $60,000. No gift tax is paid. Devon later sells the land for $75,000. What is the result?

Priya owns a municipal bond as an investment. During the year, she receives $1,800 of tax-exempt interest and sells the bond for a $4,000 gain. How are these amounts generally treated for federal income tax purposes?

Michelle closes a certificate of deposit (CD) before its maturity date. Her Form 1099-INT, Interest Income, reports $40 of interest in Box 1 and a $125 early withdrawal penalty in Box 2. What amount may Michelle claim as an adjustment to income for the penalty?

Rosa works as a counselor at a public high school. During 2026, she works 875 hours and pays $600 for unreimbursed materials used in student counseling programs. How much may Rosa claim as an educator expense deduction?

Andre itemizes deductions and has adjusted gross income (AGI) of $80,000. During the year, he pays $10,500 of qualified medical expenses and receives $2,000 of insurance reimbursements for those expenses. What is Andre’s medical expense deduction before considering his other itemized deductions?

Avery and Jordan are married and jointly own and operate an unincorporated landscaping business. Both materially participate, and they elect to treat the business as a qualified joint venture rather than a partnership. How should they generally report the business?

Before opening a consulting business, Jordan incurs $53,000 of qualifying start-up costs. Jordan begins business operations during the year and makes the proper election on a timely filed return. What is the maximum immediate start-up cost deduction?

A client owes a practitioner $800 for prior tax preparation services. The client asks the practitioner to return the original Forms W-2 and 1099 previously provided because another preparer will complete the current return. What should the practitioner generally do?

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