INTUIT ACADEMY TAX LEVEL 1 EXAM QUESTIONS WITH
VERIFIED ANSWERS
335 QUESTIONS AND ANSWERS
1. Below the line deductions include:
Standard deduction
2.Eligible educators can deduct up to _______ of qualified expenses paid during the tax year.:
$250
3.Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA
MSA?: Breast enhancement
4.The net capital gain is taxed at _______ if the married filing jointly taxpayer income is less
than $80,800.: 0%
5.To claim a child as a dependent, they must meet the qualifying child test or
________________.: qualifying relative test
6.Ordinary dividends are taxed at the same rate as __________ income tax rate.-
: ordinary
7.Distributions from HSA, Archer MSA, or MS MSA are non-taxable when
_________________________________________.: spent for qualified medical expenses
of your dependent
8. Which residency status is used when an individual is neither a U.S. citizen nor a resident
alien for tax purposes?: Non-resident alien
9. _____________ and ____________ are what taxpayers must know to calculate their
tax amount.: Taxable income and filing status
,10. 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
11. __________ reduce the amount of tax due.: Tax credits
12. Which form is for beneficiaries who get income from trusts and estates?: Form 1041
13. ___________________ 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
14. To satisfy the Substantial Presence Test, how many minimum days (in the current
year) must you be physically present in the United States?: 31
15. Complete the equation. ___________ = Selling Price - Purchase Price: Capital Loss
or Capital Gain
16. _________________ 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
17. 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
18. 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.
19. 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.
20. ______________ 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.
21. Which is a non-deductible business expense?: family vacation Expenses done for
personal and recreational purposes are personal expenses and are non-deductible.
22. What amount of upper cap is applicable on business gifts?: $25 The upper cap of
$25 is applicable on business gifts.
23 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.
24. The are _________ filing statuses.: five There are five filing statuses. Single
Married Filing Jointly
, Married Filing Separately
Head of Household
Qualifying Widow(er)
25. 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).
26. ______________ includes supplemental income and loss.: Schedule E includes
supple-
mental 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)
27. Payments and refundable credits are listed between what lines on Form
1040?: Lines 25 through 30 are payments and refundable credits.
28. A partnership files a tax return on ______________.: A partnership files a tax return
on Form 1065.
29. Which of the following is not a requirement for S-Corporation election?: Being an
international entity is not a requirement for S-Corporation election.
30. ________________ generally have to make estimated tax payments if they expect
to owe tax of $500 or more when their return is filed.: Corporations generally have to
VERIFIED ANSWERS
335 QUESTIONS AND ANSWERS
1. Below the line deductions include:
Standard deduction
2.Eligible educators can deduct up to _______ of qualified expenses paid during the tax year.:
$250
3.Which of the following is an ineligible medical expense for HSA, Archer MSA, and MA
MSA?: Breast enhancement
4.The net capital gain is taxed at _______ if the married filing jointly taxpayer income is less
than $80,800.: 0%
5.To claim a child as a dependent, they must meet the qualifying child test or
________________.: qualifying relative test
6.Ordinary dividends are taxed at the same rate as __________ income tax rate.-
: ordinary
7.Distributions from HSA, Archer MSA, or MS MSA are non-taxable when
_________________________________________.: spent for qualified medical expenses
of your dependent
8. Which residency status is used when an individual is neither a U.S. citizen nor a resident
alien for tax purposes?: Non-resident alien
9. _____________ and ____________ are what taxpayers must know to calculate their
tax amount.: Taxable income and filing status
,10. 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
11. __________ reduce the amount of tax due.: Tax credits
12. Which form is for beneficiaries who get income from trusts and estates?: Form 1041
13. ___________________ 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
14. To satisfy the Substantial Presence Test, how many minimum days (in the current
year) must you be physically present in the United States?: 31
15. Complete the equation. ___________ = Selling Price - Purchase Price: Capital Loss
or Capital Gain
16. _________________ 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
17. 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
18. 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.
19. 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.
20. ______________ 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.
21. Which is a non-deductible business expense?: family vacation Expenses done for
personal and recreational purposes are personal expenses and are non-deductible.
22. What amount of upper cap is applicable on business gifts?: $25 The upper cap of
$25 is applicable on business gifts.
23 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.
24. The are _________ filing statuses.: five There are five filing statuses. Single
Married Filing Jointly
, Married Filing Separately
Head of Household
Qualifying Widow(er)
25. 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).
26. ______________ includes supplemental income and loss.: Schedule E includes
supple-
mental 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)
27. Payments and refundable credits are listed between what lines on Form
1040?: Lines 25 through 30 are payments and refundable credits.
28. A partnership files a tax return on ______________.: A partnership files a tax return
on Form 1065.
29. Which of the following is not a requirement for S-Corporation election?: Being an
international entity is not a requirement for S-Corporation election.
30. ________________ generally have to make estimated tax payments if they expect
to owe tax of $500 or more when their return is filed.: Corporations generally have to
