Tax Level 1: Intuit Academy Exam Questions and Answers
Comprehensive Resource To Help You Ace 2026-2027 Exams
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!! Current Update!!
1. Below-the-line deductions include - Correct Answer: Standard
deduction.
2. Eligible educators can deduct up to how much in qualified expenses paid
during the tax year? - Correct Answer: $250
3. Which of the following is an ineligible medical expense for an HSA, Archer
MSA, or MA MSA? - Correct Answer: Breast enhancement.
4. What is the tax rate on net capital gains for married taxpayers filing jointly
with income less than $80,800? - Correct Answer: 0%
5. To claim a child as a dependent, the child must meet the qualifying child
test or what other test? - Correct Answer: Qualifying relative test.
6. Ordinary dividends are taxed at the same rate as what type of income? -
Correct Answer: Ordinary income.
7. When are distributions from an HSA, Archer MSA, or MA MSA non-taxable?
- Correct Answer: When used for qualified medical expenses of your
dependent.
8. Which residency status applies to an individual who is neither a U.S. citizen
nor a resident alien for tax purposes? - Correct Answer: Non-resident
alien.
9. What two factors must taxpayers know to calculate their tax amount? -
Correct Answer: Taxable income and filing status.
,10.For mortgages entered into after December 15, 2017, interest is deductible
on up to how much qualified mortgage debt? - Correct Answer:
$750,000
11.What reduces the amount of tax due? - Correct Answer: Tax credits.
12.Which form is used by beneficiaries who receive income from trusts and
estates? - Correct Answer: Form 1041.
13.What consists of earned and unearned income used to calculate tax and is
generally less than adjusted gross income due to deductions? - Correct
Answer: Taxable income.
14.To satisfy the Substantial Presence Test, what is the minimum number of
days an individual must be physically present in the United States during the
current year? - Correct Answer: 31 days
15.Complete the equation: ________ = Selling Price − Purchase Price. -
Correct Answer: Capital gain or capital loss.
16.Which schedule helps sole proprietors calculate business profit or loss? -
Correct Answer: Schedule C.
17.What type of deduction is an HSA contribution? - Correct Answer:
Above-the-line deduction.
18.As it applies to compensation income, sourcing of wages and personal
services income is controlled by what? - Correct Answer: Where the
service is performed.
19.Which is considered non-taxable income? - Correct Answer: Military
personnel allowances.
20.What tax credit offsets income and payroll taxes for low-income workers
and encourages employment? - Correct Answer: Earned Income Tax
Credit (EITC).
,21.Which is a non-deductible business expense? - Correct Answer: Family
vacation.
22.What is the maximum deductible amount for business gifts? - Correct
Answer: $25
23.If yearly dividend amounts exceed what amount, Schedule B must be
attached to Form 1040? - Correct Answer: $1,500
24.How many filing statuses are available for taxpayers? - Correct Answer:
Five
25.What is the maximum Child Tax Credit per qualifying child under age 17 for
tax year 2021 (2022)? - Correct Answer: $3,600
26.Which schedule reports supplemental income and loss? - Correct
Answer: Schedule E.
27.Between which lines on Form 1040 are payments and refundable credits
reported? - Correct Answer: Lines 25 through 30
28.Which form does a partnership use to file its tax return? - Correct
Answer: Form 1065.
29.Which of the following is not a requirement for S-Corporation election? -
Correct Answer: Being an international entity.
30.Who generally must make estimated tax payments if they expect to owe
$500 or more when their return is filed? - Correct Answer: Corporations.
31.Which of the following is not a nonrefundable tax credit? - Correct
Answer: Child and Dependent Care Credit.
32.Social Security benefits can be taxed up to what maximum percentage? -
Correct Answer: 85%.
33.Which factor does not limit the Qualified Business Income (QBI) deduction?
- Correct Answer: Being reported on Schedule C.
34.Who cannot take the standard deduction? - Correct Answer: Married
Filing Separately taxpayers whose spouse itemizes; taxpayers filing a short-
year return due to a change in accounting period; nonresident or dual-status
aliens.
, 35.What type of payment is not considered miscellaneous income? -
Correct Answer: Employment wages.
36.Which type of dividend is distributed by mutual funds and REITs? -
Correct Answer: Capital gain distribution.
37.Which of the following is not considered a gambling winning? - Correct
Answer: Games of chance.
38.Which item is considered an adjustment to gross income? - Correct
Answer: Moving expense.
39.What does CFC stand for? - Correct Answer: Controlled Foreign
Corporation.
40.The self-employed health insurance deduction is reduced by the deduction
for what portion of self-employment tax? - Correct Answer: One-half.
41.What is reported on Line 2b of Form 1040? - Correct Answer: Taxable
interest.
42.For Married Filing Jointly taxpayers, Form 1116 is required when foreign
taxes paid exceed what amount? - Correct Answer: $600.
43.What measure is used to set limits for retirement contributions, deductions,
and credits? - Correct Answer: Adjusted Gross Income (AGI).
44.When calculating business auto expenses, which expense is separately
deductible under either method? - Correct Answer: Toll charges.
45.What schedule allocates partnership income to each partner? - Correct
Answer: Schedule K-1.
46.How many Social Security trust funds are there? - Correct Answer: Two.
47.Rental income from tangible property is sourced to the place where the
property is what? - Correct Answer: Located.
48.Taxable interest is reported on which form? - Correct Answer: Form
1099-INT.
49.What type of gains are realized on assets held for one year or less? -
Correct Answer: Short-term gains.
50.True or False: A taxpayer's filing status determines the rate at which income
is taxed. - Correct Answer: True.
51.Filing status is used to determine what? - Correct Answer: Filing
requirements, standard deduction, eligibility for certain credits, and the
correct tax.
52.What are the five filing status types? - Correct Answer: Single; Head of
Household; Married Filing Jointly; Married Filing Separately; Qualifying
Widow(er).
Comprehensive Resource To Help You Ace 2026-2027 Exams
Includes Frequently Tested Questions With ELABORATED
100% Correct COMPLETE SOLUTIONS
Guaranteed Pass First Attempt!! Current Update!!
1. Below-the-line deductions include - Correct Answer: Standard
deduction.
2. Eligible educators can deduct up to how much in qualified expenses paid
during the tax year? - Correct Answer: $250
3. Which of the following is an ineligible medical expense for an HSA, Archer
MSA, or MA MSA? - Correct Answer: Breast enhancement.
4. What is the tax rate on net capital gains for married taxpayers filing jointly
with income less than $80,800? - Correct Answer: 0%
5. To claim a child as a dependent, the child must meet the qualifying child
test or what other test? - Correct Answer: Qualifying relative test.
6. Ordinary dividends are taxed at the same rate as what type of income? -
Correct Answer: Ordinary income.
7. When are distributions from an HSA, Archer MSA, or MA MSA non-taxable?
- Correct Answer: When used for qualified medical expenses of your
dependent.
8. Which residency status applies to an individual who is neither a U.S. citizen
nor a resident alien for tax purposes? - Correct Answer: Non-resident
alien.
9. What two factors must taxpayers know to calculate their tax amount? -
Correct Answer: Taxable income and filing status.
,10.For mortgages entered into after December 15, 2017, interest is deductible
on up to how much qualified mortgage debt? - Correct Answer:
$750,000
11.What reduces the amount of tax due? - Correct Answer: Tax credits.
12.Which form is used by beneficiaries who receive income from trusts and
estates? - Correct Answer: Form 1041.
13.What consists of earned and unearned income used to calculate tax and is
generally less than adjusted gross income due to deductions? - Correct
Answer: Taxable income.
14.To satisfy the Substantial Presence Test, what is the minimum number of
days an individual must be physically present in the United States during the
current year? - Correct Answer: 31 days
15.Complete the equation: ________ = Selling Price − Purchase Price. -
Correct Answer: Capital gain or capital loss.
16.Which schedule helps sole proprietors calculate business profit or loss? -
Correct Answer: Schedule C.
17.What type of deduction is an HSA contribution? - Correct Answer:
Above-the-line deduction.
18.As it applies to compensation income, sourcing of wages and personal
services income is controlled by what? - Correct Answer: Where the
service is performed.
19.Which is considered non-taxable income? - Correct Answer: Military
personnel allowances.
20.What tax credit offsets income and payroll taxes for low-income workers
and encourages employment? - Correct Answer: Earned Income Tax
Credit (EITC).
,21.Which is a non-deductible business expense? - Correct Answer: Family
vacation.
22.What is the maximum deductible amount for business gifts? - Correct
Answer: $25
23.If yearly dividend amounts exceed what amount, Schedule B must be
attached to Form 1040? - Correct Answer: $1,500
24.How many filing statuses are available for taxpayers? - Correct Answer:
Five
25.What is the maximum Child Tax Credit per qualifying child under age 17 for
tax year 2021 (2022)? - Correct Answer: $3,600
26.Which schedule reports supplemental income and loss? - Correct
Answer: Schedule E.
27.Between which lines on Form 1040 are payments and refundable credits
reported? - Correct Answer: Lines 25 through 30
28.Which form does a partnership use to file its tax return? - Correct
Answer: Form 1065.
29.Which of the following is not a requirement for S-Corporation election? -
Correct Answer: Being an international entity.
30.Who generally must make estimated tax payments if they expect to owe
$500 or more when their return is filed? - Correct Answer: Corporations.
31.Which of the following is not a nonrefundable tax credit? - Correct
Answer: Child and Dependent Care Credit.
32.Social Security benefits can be taxed up to what maximum percentage? -
Correct Answer: 85%.
33.Which factor does not limit the Qualified Business Income (QBI) deduction?
- Correct Answer: Being reported on Schedule C.
34.Who cannot take the standard deduction? - Correct Answer: Married
Filing Separately taxpayers whose spouse itemizes; taxpayers filing a short-
year return due to a change in accounting period; nonresident or dual-status
aliens.
, 35.What type of payment is not considered miscellaneous income? -
Correct Answer: Employment wages.
36.Which type of dividend is distributed by mutual funds and REITs? -
Correct Answer: Capital gain distribution.
37.Which of the following is not considered a gambling winning? - Correct
Answer: Games of chance.
38.Which item is considered an adjustment to gross income? - Correct
Answer: Moving expense.
39.What does CFC stand for? - Correct Answer: Controlled Foreign
Corporation.
40.The self-employed health insurance deduction is reduced by the deduction
for what portion of self-employment tax? - Correct Answer: One-half.
41.What is reported on Line 2b of Form 1040? - Correct Answer: Taxable
interest.
42.For Married Filing Jointly taxpayers, Form 1116 is required when foreign
taxes paid exceed what amount? - Correct Answer: $600.
43.What measure is used to set limits for retirement contributions, deductions,
and credits? - Correct Answer: Adjusted Gross Income (AGI).
44.When calculating business auto expenses, which expense is separately
deductible under either method? - Correct Answer: Toll charges.
45.What schedule allocates partnership income to each partner? - Correct
Answer: Schedule K-1.
46.How many Social Security trust funds are there? - Correct Answer: Two.
47.Rental income from tangible property is sourced to the place where the
property is what? - Correct Answer: Located.
48.Taxable interest is reported on which form? - Correct Answer: Form
1099-INT.
49.What type of gains are realized on assets held for one year or less? -
Correct Answer: Short-term gains.
50.True or False: A taxpayer's filing status determines the rate at which income
is taxed. - Correct Answer: True.
51.Filing status is used to determine what? - Correct Answer: Filing
requirements, standard deduction, eligibility for certain credits, and the
correct tax.
52.What are the five filing status types? - Correct Answer: Single; Head of
Household; Married Filing Jointly; Married Filing Separately; Qualifying
Widow(er).
