INTUIT ACADEMY TAX LEVEL 1 EXAM QUESTIONS
WITH CORRECT ANSWERS 2026
Below the line deductions include
Standard deduction
Eligible educators can deduct up to _______ of qualified expenses paid during the tax
year.
$250
Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA
MSA?
Breast enhancement
The net capital gain is taxed at _______ if the married filing jointly taxpayer income is less
than $80,800.
0%
To claim a child as a dependent, they must meet the qualifying child test or
________________.
qualifying relative test
Ordinary dividends are taxed at the same rate as __________ income tax rate.
ordinary
Distributions from HSA, Archer MSA, or MS MSA are non-taxable when
_________________________________________.
spent for qualified medical expenses of your dependent
Which residency status is used when an individual is neither a U.S. citizen nor a resident
alien for tax purposes?
Non-resident alien
_____________ and ____________ are what taxpayers must know to calculate their tax
amount.
,Taxable income and filing status
For mortgages entered into after December 15, 2017, the amount of interest the
taxpayer can deduct is no more than ______________ of the debt used to buy, build, or
substantially improve their principal home and a second home.
750,000
__________ reduce the amount of tax due.
Tax credits
Which form is for beneficiaries who get income from trusts and estates?
Form 1041
___________________ consists of both earned and unearned income that is used to
calculate the tax. It is generally less than adjusted gross income due to the deductions.
Taxable income
To satisfy the Substantial Presence Test, how many minimum days (in the current year)
must you be physically present in the United States?
31
Complete the equation. ___________ = Selling Price - Purchase Price
Capital Loss or Capital Gain
_________________ helps sole proprietorships calculate the profit or loss from a business
while also providing the IRS with your total business income and deductions.
Schedule C
What type of deduction is a HSA contribution?
Above-the-Line Deduction Some of the common expenses on which Above-the-Line
deductions are available include:
Educator expenses
Early withdrawal penalties of saving accounts
Moving expenses
Business expenses
HSA contributions
,Self-employment tax
Alimony payments
Tuition fees
Contributions to a traditional IRA
Student loan interest deduction
Health insurance premiums
Retirement account contribution
As it applies to compensation income, the general rule for sourcing wages and personal
services income is controlled by ________________________________.
where the service is performed The general rule for sourcing wages and personal
services income is controlled by where the service is performed. The residence of the
recipient of the service, the place of contracting, and the time and place of payment are
irrelevant.
Which is considered non-taxable income?
military personnel allowances Payments received as a member of military service are
generally taxed as wages except for retirement pay, which is taxed as a pension.
Allowances generally aren't taxed.
______________ is used to offset income and payroll taxes for low-income workers and to
provide an incentive to work.
Earned Income Tax Credit Earned Income Tax Credit is used to offset income and payroll
taxes for low-income workers and to provide an incentive to work.
Which is a non-deductible business expense?
family vacation Expenses done for personal and recreational purposes are personal
expenses and are non-deductible.
What amount of upper cap is applicable on business gifts?
$25 The upper cap of $25 is applicable on business gifts.
If yearly dividend amounts exceed __________, a Schedule B must be completed and
attached to Form 1040.
, $1500 If yearly dividend amounts exceed $1500, a Schedule B must be completed and
attached.
The are _________ filing statuses.
five There are five filing statuses.
Single
Married Filing Jointly
Married Filing Separately
Head of Household
Qualifying Widow(er)
Taxpayers can claim a Child Tax Credit of up to __________ for each child under age 17 in
2021(2022).
$3,600.00 Taxpayers can claim a CTC of up to $3,600 for each child under age 17 in
2021(2022). Since 2021, qualifying families may now receive up to $3,600 per child
under the age of 5 and $3,000 for those ages 6 to 17. That's up from $2,000 per child,
provided families fall under certain income thresholds (less than $150,000 for couples
and $112,500 for single parents).
______________ includes supplemental income and loss.
Schedule E includes supplemental income and loss
Supplemental Income and Loss consists of:
Income or Loss from Rental Real Estate and Royalties
Income or Loss from Partnerships and S Corporations
Income or Loss from Estates and Trusts, and
Income or Loss from Real Estate Mortgage Investment Conduits (REMICs)
Payments and refundable credits are listed between what lines on Form 1040?
Lines 25 through 30 are payments and refundable credits.
A partnership files a tax return on ______________.
A partnership files a tax return on Form 1065.
Which of the following is not a requirement for S-Corporation election?
Being an international entity is not a requirement for S-Corporation election.
WITH CORRECT ANSWERS 2026
Below the line deductions include
Standard deduction
Eligible educators can deduct up to _______ of qualified expenses paid during the tax
year.
$250
Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA
MSA?
Breast enhancement
The net capital gain is taxed at _______ if the married filing jointly taxpayer income is less
than $80,800.
0%
To claim a child as a dependent, they must meet the qualifying child test or
________________.
qualifying relative test
Ordinary dividends are taxed at the same rate as __________ income tax rate.
ordinary
Distributions from HSA, Archer MSA, or MS MSA are non-taxable when
_________________________________________.
spent for qualified medical expenses of your dependent
Which residency status is used when an individual is neither a U.S. citizen nor a resident
alien for tax purposes?
Non-resident alien
_____________ and ____________ are what taxpayers must know to calculate their tax
amount.
,Taxable income and filing status
For mortgages entered into after December 15, 2017, the amount of interest the
taxpayer can deduct is no more than ______________ of the debt used to buy, build, or
substantially improve their principal home and a second home.
750,000
__________ reduce the amount of tax due.
Tax credits
Which form is for beneficiaries who get income from trusts and estates?
Form 1041
___________________ consists of both earned and unearned income that is used to
calculate the tax. It is generally less than adjusted gross income due to the deductions.
Taxable income
To satisfy the Substantial Presence Test, how many minimum days (in the current year)
must you be physically present in the United States?
31
Complete the equation. ___________ = Selling Price - Purchase Price
Capital Loss or Capital Gain
_________________ helps sole proprietorships calculate the profit or loss from a business
while also providing the IRS with your total business income and deductions.
Schedule C
What type of deduction is a HSA contribution?
Above-the-Line Deduction Some of the common expenses on which Above-the-Line
deductions are available include:
Educator expenses
Early withdrawal penalties of saving accounts
Moving expenses
Business expenses
HSA contributions
,Self-employment tax
Alimony payments
Tuition fees
Contributions to a traditional IRA
Student loan interest deduction
Health insurance premiums
Retirement account contribution
As it applies to compensation income, the general rule for sourcing wages and personal
services income is controlled by ________________________________.
where the service is performed The general rule for sourcing wages and personal
services income is controlled by where the service is performed. The residence of the
recipient of the service, the place of contracting, and the time and place of payment are
irrelevant.
Which is considered non-taxable income?
military personnel allowances Payments received as a member of military service are
generally taxed as wages except for retirement pay, which is taxed as a pension.
Allowances generally aren't taxed.
______________ is used to offset income and payroll taxes for low-income workers and to
provide an incentive to work.
Earned Income Tax Credit Earned Income Tax Credit is used to offset income and payroll
taxes for low-income workers and to provide an incentive to work.
Which is a non-deductible business expense?
family vacation Expenses done for personal and recreational purposes are personal
expenses and are non-deductible.
What amount of upper cap is applicable on business gifts?
$25 The upper cap of $25 is applicable on business gifts.
If yearly dividend amounts exceed __________, a Schedule B must be completed and
attached to Form 1040.
, $1500 If yearly dividend amounts exceed $1500, a Schedule B must be completed and
attached.
The are _________ filing statuses.
five There are five filing statuses.
Single
Married Filing Jointly
Married Filing Separately
Head of Household
Qualifying Widow(er)
Taxpayers can claim a Child Tax Credit of up to __________ for each child under age 17 in
2021(2022).
$3,600.00 Taxpayers can claim a CTC of up to $3,600 for each child under age 17 in
2021(2022). Since 2021, qualifying families may now receive up to $3,600 per child
under the age of 5 and $3,000 for those ages 6 to 17. That's up from $2,000 per child,
provided families fall under certain income thresholds (less than $150,000 for couples
and $112,500 for single parents).
______________ includes supplemental income and loss.
Schedule E includes supplemental income and loss
Supplemental Income and Loss consists of:
Income or Loss from Rental Real Estate and Royalties
Income or Loss from Partnerships and S Corporations
Income or Loss from Estates and Trusts, and
Income or Loss from Real Estate Mortgage Investment Conduits (REMICs)
Payments and refundable credits are listed between what lines on Form 1040?
Lines 25 through 30 are payments and refundable credits.
A partnership files a tax return on ______________.
A partnership files a tax return on Form 1065.
Which of the following is not a requirement for S-Corporation election?
Being an international entity is not a requirement for S-Corporation election.
