INTUIT ACADEMY TAX LEVEL 1 EXAM QUESTION BANK
NEWEST 202-2027 ACTUAL EXAM WITH COMPLETE 330+
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) ALREADY GRADED A+ |
GUARANTEED PASS
1. Filing Status Determination (Multiple Conditions)
Maria is unmarried and lived with her 10-year-old nephew for the entire year. She provided
55% of household support. The child’s parents are alive but did not live in the home and did
not claim the child. Maria paid all housing costs. What is Maria’s correct filing status?
A. Single
B. Head of Household
C. Qualifying Widow(er)
D. Married Filing Separately
Correct Answer - -: B
Rationale: Head of Household applies when an unmarried taxpayer pays >50% of household
costs and a qualifying child or relative lives with them. A nephew qualifies as a qualifying
relative under support and residency rules.
2. Gross Income vs. Excludable Income
Which of the following must be included in gross income?
A. Child support received
B. Life insurance proceeds (death benefit)
C. Unemployment compensation
D. Gifts received from family
,Correct Answer - -: C
Rationale: Unemployment compensation is taxable income. Child support, gifts, and life
insurance death benefits are excluded from gross income.
3. W-2 vs. 1099-NEC Classification
James worked part-time for a landscaping company. He used company equipment, worked
set hours, and was supervised daily, but received a 1099-NEC. How should his income be
treated?
A. Self-employment income
B. Other income
C. Wage income subject to payroll taxes
D. Non-taxable income
Correct Answer - -: C
Rationale: Worker classification depends on control, not the form issued. This is employee
income and should be treated as wages.
4. Standard Deduction vs. Itemized Deduction
A single taxpayer has the following expenses:
• Medical expenses = 5% of AGI
• Mortgage interest = $4,500
• State taxes paid = $11,000
• Charitable donations = $1,200
Which is correct?
A. Itemize all expenses
B. Itemize but cap SALT at $10,000
C. Take standard deduction because itemizing is not allowed
D. Deduct all expenses fully
Correct Answer - -: B
Rationale: SALT deductions are capped at $10,000. Medical expenses below 7.5% of AGI are
not deductible. Itemization is allowed but limited.
5. Adjustments to Income (Above-the-Line)
,Which expense is an adjustment to income?
A. Charitable contributions
B. Student loan interest
C. Medical expenses
D. Mortgage interest
Correct Answer - -: B
Rationale: Student loan interest is an above-the-line deduction reducing AGI.
6. Tax Credits vs. Deductions
Which statement is TRUE?
A. Deductions reduce tax dollar-for-dollar
B. Credits reduce taxable income
C. Credits reduce tax liability directly
D. Credits are always refundable
Correct Answer - -: C
Rationale: Credits reduce tax owed directly; deductions reduce taxable income. Not all credits
are refundable.
7. Child Tax Credit Eligibility
A taxpayer claims a 16-year-old dependent who lived with them all year and has a valid SSN.
What is the correct treatment?
A. No credit allowed
B. Other Dependent Credit only
C. Child Tax Credit allowed
D. Earned Income Credit only
Correct Answer - -: C
Rationale: The Child Tax Credit applies to qualifying children under age 17 with valid SSNs.
8. Earned vs. Unearned Income
Which income qualifies as earned income for EITC purposes?
A. Interest income
B. Social Security benefits
, C. W-2 wages
D. Gambling winnings
Correct Answer - -: C
Rationale: Earned income includes wages and salaries; interest and benefits are unearned.
9. Dependency Test – Support
A college student earned $5,000 and received $12,000 in parental support. Who provides
majority support?
A. The student
B. The parents
C. IRS
D. Shared equally
Correct Answer - -: B
Rationale: Support test considers who provides more than 50% of total support.
10. Filing Requirement Threshold
Which individual is REQUIRED to file?
A. Single, age 30, income below standard deduction
B. Self-employed with $600 net earnings
C. Retired with only Social Security
D. Dependent with no income
Correct Answer - -: B
Rationale: Self-employment income ≥$400 requires filing.
11. Refundable Credit Identification
Which credit can result in a refund even if no tax is owed?
A. Child and Dependent Care Credit
B. Lifetime Learning Credit
C. Earned Income Tax Credit
D. Adoption Credit
Correct Answer - -: C
Rationale: EITC is refundable.
NEWEST 202-2027 ACTUAL EXAM WITH COMPLETE 330+
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) ALREADY GRADED A+ |
GUARANTEED PASS
1. Filing Status Determination (Multiple Conditions)
Maria is unmarried and lived with her 10-year-old nephew for the entire year. She provided
55% of household support. The child’s parents are alive but did not live in the home and did
not claim the child. Maria paid all housing costs. What is Maria’s correct filing status?
A. Single
B. Head of Household
C. Qualifying Widow(er)
D. Married Filing Separately
Correct Answer - -: B
Rationale: Head of Household applies when an unmarried taxpayer pays >50% of household
costs and a qualifying child or relative lives with them. A nephew qualifies as a qualifying
relative under support and residency rules.
2. Gross Income vs. Excludable Income
Which of the following must be included in gross income?
A. Child support received
B. Life insurance proceeds (death benefit)
C. Unemployment compensation
D. Gifts received from family
,Correct Answer - -: C
Rationale: Unemployment compensation is taxable income. Child support, gifts, and life
insurance death benefits are excluded from gross income.
3. W-2 vs. 1099-NEC Classification
James worked part-time for a landscaping company. He used company equipment, worked
set hours, and was supervised daily, but received a 1099-NEC. How should his income be
treated?
A. Self-employment income
B. Other income
C. Wage income subject to payroll taxes
D. Non-taxable income
Correct Answer - -: C
Rationale: Worker classification depends on control, not the form issued. This is employee
income and should be treated as wages.
4. Standard Deduction vs. Itemized Deduction
A single taxpayer has the following expenses:
• Medical expenses = 5% of AGI
• Mortgage interest = $4,500
• State taxes paid = $11,000
• Charitable donations = $1,200
Which is correct?
A. Itemize all expenses
B. Itemize but cap SALT at $10,000
C. Take standard deduction because itemizing is not allowed
D. Deduct all expenses fully
Correct Answer - -: B
Rationale: SALT deductions are capped at $10,000. Medical expenses below 7.5% of AGI are
not deductible. Itemization is allowed but limited.
5. Adjustments to Income (Above-the-Line)
,Which expense is an adjustment to income?
A. Charitable contributions
B. Student loan interest
C. Medical expenses
D. Mortgage interest
Correct Answer - -: B
Rationale: Student loan interest is an above-the-line deduction reducing AGI.
6. Tax Credits vs. Deductions
Which statement is TRUE?
A. Deductions reduce tax dollar-for-dollar
B. Credits reduce taxable income
C. Credits reduce tax liability directly
D. Credits are always refundable
Correct Answer - -: C
Rationale: Credits reduce tax owed directly; deductions reduce taxable income. Not all credits
are refundable.
7. Child Tax Credit Eligibility
A taxpayer claims a 16-year-old dependent who lived with them all year and has a valid SSN.
What is the correct treatment?
A. No credit allowed
B. Other Dependent Credit only
C. Child Tax Credit allowed
D. Earned Income Credit only
Correct Answer - -: C
Rationale: The Child Tax Credit applies to qualifying children under age 17 with valid SSNs.
8. Earned vs. Unearned Income
Which income qualifies as earned income for EITC purposes?
A. Interest income
B. Social Security benefits
, C. W-2 wages
D. Gambling winnings
Correct Answer - -: C
Rationale: Earned income includes wages and salaries; interest and benefits are unearned.
9. Dependency Test – Support
A college student earned $5,000 and received $12,000 in parental support. Who provides
majority support?
A. The student
B. The parents
C. IRS
D. Shared equally
Correct Answer - -: B
Rationale: Support test considers who provides more than 50% of total support.
10. Filing Requirement Threshold
Which individual is REQUIRED to file?
A. Single, age 30, income below standard deduction
B. Self-employed with $600 net earnings
C. Retired with only Social Security
D. Dependent with no income
Correct Answer - -: B
Rationale: Self-employment income ≥$400 requires filing.
11. Refundable Credit Identification
Which credit can result in a refund even if no tax is owed?
A. Child and Dependent Care Credit
B. Lifetime Learning Credit
C. Earned Income Tax Credit
D. Adoption Credit
Correct Answer - -: C
Rationale: EITC is refundable.
