Tax Level 1
Intuit Academy Tax Level 1 with Actual Questions &
Correct Answers and Expert Rationales | Complete
Solutions with A+ Guide
THIS DOCUMENT CONTAINS:
❖Tax Level 1
❖Intuit Academy Tax Level 1
❖Actual Questions & Correct Answers (Verified
Answers)
❖Full Deep Expert Rationales
❖Test-taking tip
❖Complete Solutions with A+ Guide
❖Latest (2026/2027) Updated Version
,1. Below-the-line deductions include:
A. The Earned Income Tax Credit
B. The standard deduction
C. Educator expenses
D. HSA contributions
Correct answer: B. The standard deduction
Expert rationale: Below-the-line deductions are those taken after adjusted gross
income is figured, and the standard deduction is the classic example of a below-
the-line deduction.
Test-taking tip: Remember the "line" is AGI — anything subtracted after AGI
(like the standard deduction) is below the line.
2. Eligible educators can deduct up to __ of qualified expenses paid during
the tax year.
A. $150
B. $200
C. $250
D. $400
Correct answer: C. $250
Expert rationale: The educator expense deduction lets eligible educators deduct
up to $250 of qualified expenses paid during the tax year.
Test-taking tip: Fixed dollar figures like $250 are common test targets —
memorize the exact number rather than a range.
3. Which of the following is an ineligible medical expense for HSA, Archer
MSA, and MA MSA?
,A. Prescription medication
B. Breast enhancement
C. Doctor office visits
D. Hospital bills
Correct answer: B. Breast enhancement
Expert rationale: Cosmetic procedures such as breast enhancement are
ineligible medical expenses for HSA, Archer MSA, and MA MSA purposes.
Test-taking tip: Elective/cosmetic procedures are almost always the "ineligible"
answer for tax-advantaged medical accounts.
4. The net capital gain is taxed at __ if the married filing jointly taxpayer
income is less than $80,800.
A. 0%
B. 10%
C. 15%
D. 20%
Correct answer: A. 0%
Expert rationale: For married filing jointly taxpayers with income less than
$80,800, the net capital gain is taxed at 0%.
Test-taking tip: Pair the income threshold with its rate — the lowest bracket for
long-term gains is 0%.
5. To claim a child as a dependent, they must meet the qualifying child test
or __.
A. the substantial presence test
, B. the green card test
C. the qualifying relative test
D. the gross income test
Correct answer: C. the qualifying relative test
Expert rationale: A dependent must satisfy either the qualifying child test or the
qualifying relative test.
Test-taking tip: Dependents come in exactly two flavors — qualifying child OR
qualifying relative.
6. Ordinary dividends are taxed at the same rate as __ income tax rate.
A. capital gains
B. ordinary
C. tax-exempt
D. corporate
Correct answer: B. ordinary
Expert rationale: Ordinary dividends are taxed at the same rate as ordinary
income.
Test-taking tip: The word "ordinary" in the term is the giveaway — ordinary
dividends = ordinary income rates.
7. Distributions from HSA, Archer MSA, or MS MSA are non-taxable when __.
A. rolled into a retirement account
B. spent for qualified medical expenses of your dependent
C. withdrawn after age 65
D. reported on Schedule B
Intuit Academy Tax Level 1 with Actual Questions &
Correct Answers and Expert Rationales | Complete
Solutions with A+ Guide
THIS DOCUMENT CONTAINS:
❖Tax Level 1
❖Intuit Academy Tax Level 1
❖Actual Questions & Correct Answers (Verified
Answers)
❖Full Deep Expert Rationales
❖Test-taking tip
❖Complete Solutions with A+ Guide
❖Latest (2026/2027) Updated Version
,1. Below-the-line deductions include:
A. The Earned Income Tax Credit
B. The standard deduction
C. Educator expenses
D. HSA contributions
Correct answer: B. The standard deduction
Expert rationale: Below-the-line deductions are those taken after adjusted gross
income is figured, and the standard deduction is the classic example of a below-
the-line deduction.
Test-taking tip: Remember the "line" is AGI — anything subtracted after AGI
(like the standard deduction) is below the line.
2. Eligible educators can deduct up to __ of qualified expenses paid during
the tax year.
A. $150
B. $200
C. $250
D. $400
Correct answer: C. $250
Expert rationale: The educator expense deduction lets eligible educators deduct
up to $250 of qualified expenses paid during the tax year.
Test-taking tip: Fixed dollar figures like $250 are common test targets —
memorize the exact number rather than a range.
3. Which of the following is an ineligible medical expense for HSA, Archer
MSA, and MA MSA?
,A. Prescription medication
B. Breast enhancement
C. Doctor office visits
D. Hospital bills
Correct answer: B. Breast enhancement
Expert rationale: Cosmetic procedures such as breast enhancement are
ineligible medical expenses for HSA, Archer MSA, and MA MSA purposes.
Test-taking tip: Elective/cosmetic procedures are almost always the "ineligible"
answer for tax-advantaged medical accounts.
4. The net capital gain is taxed at __ if the married filing jointly taxpayer
income is less than $80,800.
A. 0%
B. 10%
C. 15%
D. 20%
Correct answer: A. 0%
Expert rationale: For married filing jointly taxpayers with income less than
$80,800, the net capital gain is taxed at 0%.
Test-taking tip: Pair the income threshold with its rate — the lowest bracket for
long-term gains is 0%.
5. To claim a child as a dependent, they must meet the qualifying child test
or __.
A. the substantial presence test
, B. the green card test
C. the qualifying relative test
D. the gross income test
Correct answer: C. the qualifying relative test
Expert rationale: A dependent must satisfy either the qualifying child test or the
qualifying relative test.
Test-taking tip: Dependents come in exactly two flavors — qualifying child OR
qualifying relative.
6. Ordinary dividends are taxed at the same rate as __ income tax rate.
A. capital gains
B. ordinary
C. tax-exempt
D. corporate
Correct answer: B. ordinary
Expert rationale: Ordinary dividends are taxed at the same rate as ordinary
income.
Test-taking tip: The word "ordinary" in the term is the giveaway — ordinary
dividends = ordinary income rates.
7. Distributions from HSA, Archer MSA, or MS MSA are non-taxable when __.
A. rolled into a retirement account
B. spent for qualified medical expenses of your dependent
C. withdrawn after age 65
D. reported on Schedule B
