Page 1 of 97
Intuit Academy Tax Level 1 Exam Question Bank
2026 Complete Practice Questions with Detailed
Answers Exam Preparation Study Guide
Introduction
This comprehensive Intuit Academy Tax Level 1 Exam
Question Bank covers essential federal tax preparation topics,
including filing statuses, gross income, Schedule C, business
income, deductions, tax credits, Form 1099 reporting,
Qualified Business Income (QBI), dividends, interest income,
dependents, and miscellaneous income. It features over 330
practice questions with detailed answers designed to reinforce
key tax concepts and prepare students for the Intuit Academy
Tax Level 1 certification exam. The material provides
extensive coverage of real-world tax scenarios, IRS forms, and
foundational tax rules to help learners build confidence and
improve exam readiness.
,Page 2 of 97
Exam Questions and Answers
87.Meghan owns a daycare center she runs from her home.
She also babysits for her brother on Saturdays. Her brother
reimburses her expenses instead of paying her an hourly rate.
Based on the information above, which of the following is
true?--- correct precise answer --- The expense
reimbursement her brother provides is not taxable income.
88.Mark is a member of our armed forces. He receives combat
pay for his duties.
Based on the information above, which of the following is
true?--- correct precise answer --- The amount of Mark's
combat pay is not taxable.
89.Which of the following is true about Judy's income?---
correct precise answer --- Judy doesn't have to include the
housing allowance in her income.
90.Veronica's business partner gifted a watch to Veronica's
wife as a fringe benefit.
Based on the information above, which of the following is
true?--- correct precise answer --- The watch is taxable
because it is considered to have been gifted to Veronica.
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91.Veronica's business partner agrees to pay 25% of
Veronica's income directly to her spouse. Does Veronica need
to report the 25% paid to her spouse as income?--- correct
precise answer --- Veronica must include the 25% paid to her
spouse as income and it is taxable.
92.Judy is a member of the clergy. She received a housing
allowance.
Which of the following is true about Judy's income?--- correct
precise answer --- Judy doesn't have to include the housing
allowance in her income.
93.Employers prepare Form W-2 at the end of each
year.Which employees must receive a Form W-2?--- correct
precise answer --- Every employee that receives payment for
services from the employer during the year.
94.Parts of Form W-2--- correct precise answer --- 1. Taxable
Income 2. Federal Tax Amount 3. Amount of Compensation
subject to Social Security tax
4.Social Security Tax Withheld 5.Reports compensation
subject to Medicare 6. Amount of Medicare tax withheld.
7. All reported earnings from tips.
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8. What employer reports were earned as tips for the
employee. 10. Reports the total dependent care benefits paid
or incurred by the employer on behalf of an employee.
11. Deferred compensation received from the employer in a
non qualified plan 12. Uses codes to list other compensation or
reductions applicable on your taxable income.
16.-20. shows the employee's state and local earnings and
withholding detail. This includes the state and local taxes that
are deductible (if a taxpayer itemizes on their federal tax
return.)
95.W-2--- correct precise answer --- The IRS requires
employers to report employee wage and salary information on
Form W-2. Employees will generally receive Form W-2 from
every employer they work for during the year. The employee's
Form W-2 reports the total taxable wages, social security and
Medicare wages, withholdings, and additional income
information for the calendar year.
Form W-2 is required for every employee who receives
payment for services during the year (including non-cash
payments).
If an employee earns wages, they will receive a Form W-2.
Intuit Academy Tax Level 1 Exam Question Bank
2026 Complete Practice Questions with Detailed
Answers Exam Preparation Study Guide
Introduction
This comprehensive Intuit Academy Tax Level 1 Exam
Question Bank covers essential federal tax preparation topics,
including filing statuses, gross income, Schedule C, business
income, deductions, tax credits, Form 1099 reporting,
Qualified Business Income (QBI), dividends, interest income,
dependents, and miscellaneous income. It features over 330
practice questions with detailed answers designed to reinforce
key tax concepts and prepare students for the Intuit Academy
Tax Level 1 certification exam. The material provides
extensive coverage of real-world tax scenarios, IRS forms, and
foundational tax rules to help learners build confidence and
improve exam readiness.
,Page 2 of 97
Exam Questions and Answers
87.Meghan owns a daycare center she runs from her home.
She also babysits for her brother on Saturdays. Her brother
reimburses her expenses instead of paying her an hourly rate.
Based on the information above, which of the following is
true?--- correct precise answer --- The expense
reimbursement her brother provides is not taxable income.
88.Mark is a member of our armed forces. He receives combat
pay for his duties.
Based on the information above, which of the following is
true?--- correct precise answer --- The amount of Mark's
combat pay is not taxable.
89.Which of the following is true about Judy's income?---
correct precise answer --- Judy doesn't have to include the
housing allowance in her income.
90.Veronica's business partner gifted a watch to Veronica's
wife as a fringe benefit.
Based on the information above, which of the following is
true?--- correct precise answer --- The watch is taxable
because it is considered to have been gifted to Veronica.
,Page 3 of 97
91.Veronica's business partner agrees to pay 25% of
Veronica's income directly to her spouse. Does Veronica need
to report the 25% paid to her spouse as income?--- correct
precise answer --- Veronica must include the 25% paid to her
spouse as income and it is taxable.
92.Judy is a member of the clergy. She received a housing
allowance.
Which of the following is true about Judy's income?--- correct
precise answer --- Judy doesn't have to include the housing
allowance in her income.
93.Employers prepare Form W-2 at the end of each
year.Which employees must receive a Form W-2?--- correct
precise answer --- Every employee that receives payment for
services from the employer during the year.
94.Parts of Form W-2--- correct precise answer --- 1. Taxable
Income 2. Federal Tax Amount 3. Amount of Compensation
subject to Social Security tax
4.Social Security Tax Withheld 5.Reports compensation
subject to Medicare 6. Amount of Medicare tax withheld.
7. All reported earnings from tips.
, Page 4 of 97
8. What employer reports were earned as tips for the
employee. 10. Reports the total dependent care benefits paid
or incurred by the employer on behalf of an employee.
11. Deferred compensation received from the employer in a
non qualified plan 12. Uses codes to list other compensation or
reductions applicable on your taxable income.
16.-20. shows the employee's state and local earnings and
withholding detail. This includes the state and local taxes that
are deductible (if a taxpayer itemizes on their federal tax
return.)
95.W-2--- correct precise answer --- The IRS requires
employers to report employee wage and salary information on
Form W-2. Employees will generally receive Form W-2 from
every employer they work for during the year. The employee's
Form W-2 reports the total taxable wages, social security and
Medicare wages, withholdings, and additional income
information for the calendar year.
Form W-2 is required for every employee who receives
payment for services during the year (including non-cash
payments).
If an employee earns wages, they will receive a Form W-2.
